| Type | Swiss Cooperative |
|---|---|
| Industry | Professional services |
| Founded | 1987; merger of Peat Marwick International and Klynveld Main Goerdeler |
| Headquarters | Amstelveen, Netherlands (global)[1] |
| Area served | Worldwide |
| Key people | Michael Andrew (Chairman) |
| Services | Audit Tax Advisory |
| Revenue | US$22.7 billion (2011)[2] |
| Employees | 138,000[2] |
| Website | KPMG.com |
KPMG is one of the largest professional services networks in the world and one of the Big Four auditors, along with Deloitte, Ernst & Young (EY) and PwC. Its global headquarters is located in Amstelveen, Netherlands.[1]
KPMG employs 138,000 people[2] and has three lines of services: audit, tax, and advisory. Its advisory services are further divided into three service groups - Management Consulting, Risk Consulting, and Transaction & Restructuring.
Contents |
The firm was established in 1870 when William Barclay Peat formed an accounting firm in London.[3] In 1877 accountancy firm Thomson McLintock opened an office in Glasgow[3] and in 1911 William Barclay Peat & Co. and Marwick Mitchell & Co. merged to form Peat Marwick Mitchell & Co, later known as Peat Marwick.
Meanwhile in 1917 Piet Klijnveld opened his accounting-firm in Amsterdam. Later he merged with Kraayenhof to form Klynveld Kraayenhof & Co.
In 1979 Klynveld Kraayenhof & Co. (Netherlands), Thomson McLintock (United States) and Deutsche Treuhandgesellschaft (Germany) formed KMG (Klynveld Main Goerdeler) as a grouping of independent national practices to create a strong European-based international firm.[3] Then in 1987 KMG and Peat Marwick joined forces in the first mega-merger of large accounting firms and formed a firm called KPMG in the US, and most of the rest of the world, and Peat Marwick McLintock in the UK.[3]
In 1990 the two firms settled on the common name of KPMG Peat Marwick McLintock but in 1991 the firm was renamed KPMG Peat Marwick and in 1999 the name was reduced again to KPMG.
In 1997 KPMG and Ernst & Young announced that they were to merge. However, while the merger to form PricewaterhouseCoopers was granted regulatory approval, the KPMG/Ernst & Young tie-up was later abandoned.[4]
In 2001 KPMG divested its U.S. consulting firm through an initial public offering of KPMG Consulting Inc, which is now called BearingPoint, Inc.[5] In early 2009, BearingPoint filed for Chapter 11 bankruptcy protection and proceeded to sell portions of the firm to Deloitte, PricewaterhouseCoopers, and other parties.[6]
The UK and Dutch consulting arms were sold to Atos Origin in 2002.[7]
In 2003 KPMG divested itself of its legal arm, Klegal[8] and KPMG LLP sold its Dispute Advisory Services to FTI Consulting.[9]
KPMG's member firms in the United Kingdom, Germany, Switzerland and Liechtenstein merged to form KPMG Europe LLP in October 2007. These member firms were followed by Spain, Belgium, the Netherlands, Luxembourg, CIS (Russia, Ukraine, Belarus, Kyrgyzstan, Kazakhstan, Armenia and Georgia), Turkey, Norway, and Saudi Arabia.[10] They appointed joint Chairmen, John Griffith-Jones and Ralf Nonnenmacher.[3] The new headquarters were located in Frankfurt, Germany.
It was announced in December 2008 that two of Tremont Group’s Rye Select funds, audited by KPMG, had $2.37 billion invested with the Madoff "Ponzi scheme."[11] Class action suits were filed.[12]
Each national KPMG firm is an independent legal entity and is a member of KPMG International Cooperative, a Swiss entity registered in the Swiss Canton of Zug. KPMG International changed its legal structure from a Swiss Verein to a co-operative under Swiss law in 2003.[13]
This structure in which the Cooperative provides support services only to the member firms is similar to other professional services networks. The member firms provide the services to client. The purpose is to limit the liablity of each independent member. [14]
KPMG International is led by:[15]
Michael Andrew, previously Chairman of KPMG in Australia, assumed the Global Chairmanship in September 2011 and isl be based in Hong Kong. This is the first time a Big Four accounting organisation has had its global leader based in Asia Pacific. [16]
KPMG in China has 13 offices (including KPMG Advisory (China) Limited) in Beijing, Shanghai, Shenyang, Nanjing, Hangzhou, Fuzhou, Xiamen, Qingdao, Guangzhou, Shenzhen, Chengdu, Hong Kong SAR and Macau SAR, with around 9,000 professionals.[17] [18] Stephen Yiu is now the Chairman of KPMG China.[19] [20]
KPMG offers the following services:[21]
Roots for the name KPMG stem from the names of four partners who merged their own independent accounting firms:
KPMG distributes a number of publications online and in print. The Corporate and Indirect Tax Rate Survey analyzes current rates incurred by international business and compares them with their equivalents of years past.[34] Similarly, the Individual Income Tax and Social Security Rate Survey compares rates with those of years past in jurisdictions around the world.[35] Competitive Alternatives is primarily focused on analyzing international business costs and acts as a guide to comparing international business site locations in North America, Europe, and Asia Pacific.[36] Exploring Global Frontiers - The New Emerging Destinations is a report focused on analyzing international locations for IT outsourcing.[37]
KPMG in China produces many publications on industry trends in both English and Chinese and these can be found on the China firm website.[38]
The US branch of KPMG was rated one of the top 10 companies for working mothers.[39] It is also ranked No. 56 on Fortune Magazine's list of 100 Best Companies to Work For, voted for by employees.[40]
KPMG ranks No. 5 out of 125 among companies with the best training programmes according to "Training Magazine".[41]
KPMG was the preferred employer among the Big Four accounting firms according to College Grad.com.[42] It was also ranked No.4 on the list of "50 Best Places to Launch a Career" in 2009 according to BusinessWeek.[43]
In 2008 KPMG in the UK was named the best big company to work for by The Times. This was the fourth consecutive year that KPMG has made the top three.[44] If a good position is obtained in the survey, staff receive an extra day's holiday, some have suggested that this could influence how staff fill in the survey thus putting the validity of the award in doubt.
In 2009 in the UK, KPMG introduced a programme known as 'Flexible Futures'. This allowed staff to volunteer to give the firm the option to either send them on a sabbatical at 30% pay for up to 12 weeks, or to reduce their working hours to 4 days a week. The option remains open to the firm until October 2010. This facility has been invoked by the firm in some departments. KPMG publicised this as innovative and an alternative approach to redundancies.[45] Reaction within the firm was generally positive, with over 75% of staff volunteering. However over 100 staff had been made redundant prior to this announcement, leading some to accuse KPMG of being hypocritical in the message that they were given.
In October 2010, for the 8th year in a row, KPMG was named one of "Canada's Top 100 Employers" by Mediacorp Canada Inc., and was featured in Maclean's newsmagazine. In November 2010 KPMG was also named one of Greater Toronto's Top Employers, which was announced by the Toronto Star newspaper.[46]
In 2003, KPMG agreed to pay $125 million to settle a lawsuit stemming from the firm's audits of the drug chain Rite Aid.[47]
In 2004, KPMG agreed to pay $115 million to settle lawsuits stemming from the collapse of software company Lernout & Hauspie Speech Products NV.[48]
In early 2005, the United States member firm, KPMG LLP, was accused by the United States Department of Justice of fraud in marketing abusive tax shelters. KPMG LLP admitted criminal wrongdoing in creating fraudulent tax shelters to help wealthy clients avoid $2.5 billion in taxes and agreed to pay $456 million in penalties in exchange for a deferred prosecution agreement. KPMG LLP would not face criminal prosecution if it complied with the terms of its agreement with the government. On January 3, 2007, the criminal conspiracy charges against KPMG were dropped.[49]
Before the settlement, the firm, on the advice of its counsel Skadden, Arps, Slate, Meagher & Flom LLP, removed several tax partners and admitted "unlawful conduct" by those partners. The firm agreed to cooperate with the U.S. Department of Justice's investigation and help prosecute former partners who had devised and sold the tax shelters. Additionally, the firm hired former U.S. district judge Sven Erik Holmes to monitor its legal and regulatory affairs.
In February 2007, KPMG Germany was investigated for ignoring questionable payments in the Siemens bribery case.[50] In November 2008, the Siemens Supervisory Board recommended changing auditors from KPMG to Ernst & Young.[51]
In 2006, Fannie Mae sued KPMG for malpractice for approving years of erroneous financial statements.[52]
In March 2008 KPMG was accused of enabling “improper and imprudent practices” at New Century Financial, a failed mortgage company[53] and KPMG agreed to pay $80 million to settle suits from Xerox shareholders over manipulated earnings reports.[54]
In August 2010 it was reported by the Swedish Financial Supervisory Authority to the Swedish accountancy regulator after HQ Bank was forced into involuntary liquidation after the Financial Supervisory Authority revoked all its licences for breach of banking regulations.[55]
According to an independent panel formed to investigate irregular payments made by Olympus which reported in December 2011, KPMG's affiliate in Japan failed in its duty to uncover fraud.[56]
The Swedish member firm was main sponsor for Swedish biathlete Magdalena Forsberg, six times world champion and twice olympic medalist. Forsberg was working as a tax consultant at the KPMG Sundsvall office parallel with her athletic career.[57]
In February 2008, Phil Mickelson, ranked one of the best golfers in the world, signed a three-year global sponsorship deal with KPMG. As part of the agreement, Mickelson will wear the KPMG logo on his headwear during all golf related appearances.[58]
The Canadian member firm sponsored Alexandre Bilodeau, who won the first gold medal for Canada on home-soil in the 2010 Vancouver Olympics. Alexandre's father is a tax partner in the Montreal office.[59][60]
|
|
|||||