The Big Four accounting firms saw solid revenue growth last year following strong performance in 2010 and 2011 after a severe revenue decline in 2009, according to a newly published analysis.

The report, from the social networking forum Big4.com, analyzed the 2012 financial performance of Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers. It found that after a strong 2011, fiscal year 2012 saw increases in revenue for all four firms, with revenues increasing between 1.4 percent and 7.8 percent from 2011, as firms leveraged the global economic recovery, improved equity markets, liquid credit conditions, stricter regulations, globalization and enhanced M&A and IPO activity.

All of those factors spurred client demand, especially for advisory services and in Asia. Revenues increased in most developed regions, while growth continued at high levels in the emerging markets of Asia and Latin America, as well as North America.

In 2010, Deloitte had surpassed PwC to become the largest Big Four firm, reporting revenues of $26.578 billion and growth of 1.8 percent, just ahead of PwC’s revenues of $26.569 billion and growth of 1.5 percent. Deloitte beat PwC by a small but significant margin of only $9 million.

In 2011 however, PwC regained its leadership position with revenues of $29.2 billion, up 10.0 percent. PwC’s revenues exceeded Deloitte’s revenues of $28.2 billion by more than $400 million, even though Deloitte’s revenue had increased 8.4 percent. In 2012, PricewaterhouseCoopers maintained its leadership position with revenues of $31.5 billion, up 7.8 percent, which exceeded Deloitte’s revenues of $31.3 billion, up by 8.6%, by a slim lead of $200 million.

Ernst & Young posted solid growth and placed third among the Big Four firms, with 2012 revenues of $24.4 billion. E&Y’s revenues rose 6.7 percent from 2011.

KPMG lagged behind the other three firms, with revenues of $23.0 billion. It posted the smallest rate of growth of all the Big Four firms: 1.4 percent compared to 2011 in US dollar terms. This expanded the gap with Ernst & Young to a wide $1.4 billion. KPMG’s modest growth is well out of line with peers due to three key factors, the study noted: Europe is a larger percentage of global revenues and was negatively impacted by U.S. dollar appreciation versus the Euro, advisory service line had modest growth and the audit service line presumably lost some relative market share against key peers.

From 2010 to 2011, combined revenues for all four firms in U.S. dollar terms rose 9.0 percent to a historic record of $103 billion, a level that surpassed the previous high of $101 billion in 2008. In 2012, combined revenues for all the four firms in U.S. dollar terms rose 6.4 percent to another historic record of $110 billion.

From 2011 to 2012, audit revenue the Big Four increased by 2.9 percent, but that was the slowest rate among the three major service lines. Tax revenue was up by a solid 5.6 percent, while advisory revenues continued their strong streak, increasing by a remarkable 12.2 percent.

Revenue in the Americas increased solidly by 9.2 percent from 2011 to 2012, following 9.9 percent growth in the previous year. Revenue in Europe was up only 3.3 percent due to high volatility in the region, slowing down from 4.3 percent in the previous year. Asia revenue growth continued with strong performance of 8.0 percent from 2011 to 2012, following a spectacular 17.4 percent growth rate from 2010 to 2011.

The appreciating U.S. dollar over the reporting period provided a headwind for the four firms, which posted generally lower growth numbers in U.S. dollar terms than in local currency terms. This appreciation had the most negative impact on KPMG’s results.

For further analysis and details, visit http://www.big4.com/analysis.