Forget struggling economies, aggressive regulators, penny-pinching business clients.

The world's two largest accounting and consulting firms are bulking up with acquisitions and combing the globe for new hires.

Head-to-head in a race for the title of world's largest private professional services firm, Deloitte and PwC are on a major expansion drive.

With audit revenues leveling off in developed markets, the firms have been making a push in growing countries such as China and India and plowing ahead with investments in consulting, where business is growing after a recessionary slump.

More is at stake than bragging rights. Just as important is cementing their status as professional service supermarkets, able to help clients in almost any market where commerce transpires.

The more they position themselves as a truly trusted one-stop solution provider to clients, the more they can hope to be more immune to fee pressures from clients that might increase if the economy worsened, said Ashley Newton, associate director at Kennedy Consulting Research and Advisory.

Last year, a 15 percent jump in the consulting area helped Deloitte overtake PwC as No. 1 in total revenues among the big four global accounting and consulting firms, which also include KPMG and Ernst & Young.

Deloitte claimed the lead by a margin of just $9 million, reporting $26.578 billion revenues to PwC's $26.569 billion. Prior to 2010, PwC had been the largest for at least five years, according to data from Accounting News Report.

ASIA, MIDDLE EAST GROWTH TARGETS

One factor behind the win was Deloitte's decision to hold on to its consulting arm about a decade ago while other audit firms shed theirs amid concerns of conflict of interest.

The decision helped Deloitte keep its grip on the high-potential area of information technology, a business with good growth prospects even in a dodgy economy. Consulting got a further boost from Deloitte acquisitions such as the government business of BearingPoint in 2009.

Although regulators in the United States and elsewhere have tightened restrictions on the consulting services auditors can provide, consulting has not been prohibited outright, and both Deloitte and PwC have focused their consulting work largely on companies that are not audit clients.

Powerful brand names and close ties with C-suite executives, built partly through audit relationships, have helped make all of the big four formidable competitors in consulting, according to Gartner Research.

What the audit work does is allow them to create competence in an industry, building credibility that is a big plus in pulling in consulting work, said Gartner analyst Alex Soejarto.

The move into consulting has been going on for some time, partly because it is far more profitable than mandatory audit work, said Arvind Hickman, editor of International Accounting Bulletin.

Audit is labor-intensive and has suffered a lot from fee pressure due to the global financial crisis.

PwC, which sold its consulting arm to IBM in 2002, has been rebuilding its consulting muscle with acquisitions such as Paragon Consulting Group and the commercial services business of BearingPoint in 2009.

Over the past 12 months, it picked up 700 consultants with its purchase of management consulting firm PRTM and hundreds more through its acquisition of Diamond Management & Technology Consultants. Recently it announced it was building its edge in the so-called sustainability or responsible resource use area, by taking on green business consultant Andrew Winston as an adviser.

Still the worldwide leader in audit revenues, it also has targeted emerging markets such as India, China and the Middle East to rev up growth.

Deloitte has bought a slew of consulting firms, including energy consultants Altos Management Partners and AJM Petroleum Consultants; performance management advisory firm Jackson Browne; economic consultancy Access Economics and business analytics firm Oco. It also beefed up in the sustainability area, picking up Clear Carbon Consulting and DOMANI Sustainability Consulting.

Full-service clout has helped the firms compete against a range of firms, from management giants such as McKinsey to technology consultants such as IBM Corp and Accenture .

HIRING NONSTOP

Both Deloitte and PwC have been hiring nonstop.

PwC said its member firms across the globe hired about 45,000 new staff in the 2011 fiscal year ended in June. Deloitte will not announce its hires until it releases fiscal 2011 revenue figures, but said it was on track with a projection announced last year of 50,000 hires a year globally over the coming five years.

The big four are expected to report their fiscal 2011 revenues in coming weeks and any significant growth will likely once again be in the consulting area, said Jonathan Hamilton, managing editor of Accounting News Report.

The audit business, while certainly the staple of all these firms, is a slow-growth business, Hamilton added.

The firms' growth raises challenges, however, such as assuring quality as their empires expand.

They are really individual firms that are badged together, but they don't have a tight centralized control, said Shan Nair, chief executive of Nair & Co, which advises companies on international expansion and works with the big four firms.

Expansion in China, a key market, has already brought headaches in the audit area. The Chinese arms of both Deloitte and PwC have had to drop clients because of concerns about their accounting and Deloitte's Shanghai office has been subpoenaed for records by U.S. regulators.

More worries loom from stepped-up regulatory scrutiny. As consulting revenues grow, complaints are surfacing again that firms will be tempted to go easy on audit clients for the sake of winning or keeping a consulting job -- a charge the audit firms deny.

Last week, European Union lawmakers approved a report that calls for barring auditors from providing audit and non-audit services to the same client. The report is nonbinding but could shape a draft law in the works.

PwC and Deloitte both said there was no conflict of interest in the consulting services they provide. Much of their consulting is done for companies they do not audit and they follow regulators' standards and companies' own restrictions on the kind of consulting they do for audit clients.

PwC also said it follows a code of ethics set by the International Ethics Standards Board for Accountants to assure its independence.

Also to the firms' advantage, much of their consulting work -- such as helping companies cut costs and become more efficient -- should be in demand even if the economy slows, analysts said.

All-in-all, I'd say they're generally taking a pretty prudent approach to expansion, even if it is aggressive, said Newton at Kennedy Consulting Research.

(Reporting by Dena Aubin; editing by Howard Goller and Andre Grenon)