KPMG

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KPMG
TypeSwiss Cooperative
Founded1987; individual components from 1870
HeadquartersAmsterdam, Netherlands
Key peopleJeremy Rosenberg, Brendan Flanagan
IndustryProfessional services
ProductsAudit
Tax
Advisory
RevenueImage:Green Arrow Up Darker.svg$19.8 billion USD (2007)
Employees123,000+
Websitewww.kpmg.com

KPMG is one of the largest professional services firms in the world. KPMG employs 123,000 people[1] in a global network spanning 148 countries[2]. Composite revenues of KPMG member firms in 2007 were $19.8 billion USD (17.4% growth from 2006)[1]. KPMG has three lines of services: audit services, tax services, and advisory services. KPMG is a Big Four auditor, alongside PricewaterhouseCoopers, Ernst & Young and Deloitte Touche Tohmatsu.

Contents

[edit] Name

The name of the firm, KPMG, is not actually an initialism. However, the roots of the name stem from four partners in the firms that merged to form KPMG.

[edit] History

  • In 1870, William Barclay Peat formed an accounting firm in London
  • In 1877 accountancy firm Thomson McLintock opens in Glasgow
  • In 1911, William Barclay Peat & Co. and Marwick Mitchell & Co. merged to form what would later be known as Peat Marwick International (PMI).
  • In 1979, Thomson McLintock forms KMG (Klynveld Main Goerdeler) a grouping of independent national practices to create a strong European-based international firm.
  • In 1987 Thomson McLintock/KMG and Peat Marwick joined forces in the first mega-merger of large accounting firms and formed KPMG.
  • In 1997, KPMG and Ernst & Young announced that they were to merge, in a manoeuvre largely seen as a spoiling tactic over the merger of Price Waterhouse and Coopers & Lybrand. However that merger, to form PricewaterhouseCoopers, was granted regulatory approval while the KPMG/Ernst & Young tie-up was later abandoned.
  • In 2001, KPMG divested its U.S. consulting firm through an IPO of KPMG Consulting Inc, which is now called BearingPoint, Inc..
  • In 2002, the UK and Dutch consulting arms were sold to Atos Origin.
  • In 2003, KPMG divested itself of its legal arm, Klegal.
  • In 2005, the U.S. member firm admitted criminal wrongdoing in a multi-billion dollar tax shelter fraud.
  • In October 2007, KPMG's member firms in the UK, Germany, Switzerland and Liechtenstein merged to form KPMG Europe LLP. They now have joint Chairmen, John Griffith-Jones and Ralf Nonnenmacher.

[edit] Legal structure and executives

Each national KPMG firm is an independent legal entity and is a member of KPMG International, a Swiss cooperative registered in the Swiss Canton of Zug. KPMG International changed its legal structure from a Swiss Verein to a cooperative under Swiss law in 2003.[3]

KPMG International is led by:

  • Timothy P. Flynn, Chairman and CEO of KPMG LLP (US), has led KPMG International since October 01 2007;
  • Carlson Tong and John B. Harrison, Chairman-Asia Pacific Region, Partner of KPMG in China and Hong Kong;
  • Timothy P. Flynn, Chairman-Americas Region, Chairman of KPMG in the United States;
  • Ben van der Veer, Chairman-Europe, Middle East and Africa Region, Chairman of KPMG in the Netherlands.

[edit] Audit clients

KPMG member firms serve as the independent auditors for a large number of major corporations:

[edit] Tax shelter fraud

Main article: KPMG tax shelter fraud

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.[4] However, Federal Attorney Michael J. Garcia stated that the charges could be reinstated if KPMG does not continue to submit to continued monitorship through September 2008.[5]

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 DOJ'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.

[edit] Staff

KPMG is one of the top 10 companies for working mothers[6]. It is also in the 100 Best companies to work for published by Fortune[7].

[edit] Corporate Anthem and Internet Cliche

The firm has also achieved widespread notoriety for its corporate anthem, entitled "Our Vision of Global Strategy". The song has enjoyed cult status online[8].

[edit] Notable current and former employees

[edit] Business

[edit] Politics and public service


[edit] Other

[edit] References

  1. ^ a b KPMG revenues grow 17.4%
  2. ^ About KPMG
  3. ^ Handelsregister des Kantons Zug (Registration Number CH-020.6.900.276-5), http://hrazg.ch/
  4. ^ Charge Against KPMG Dropped Carrie Johnson, January 4, 2007, Washington Post
  5. ^ Prosecutors end tax-shelter case against KPMG, dropping charge after settlement January 3, 2007, International Herald Tribune
  6. ^ Working Mother
  7. ^ Fortune:100 best companies to work for
  8. ^ IT anthems: KPMG
  9. ^ 'Tis the season to project stats Jonah Keri, February 14, 2007, ESPN

[edit] External links

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Big Four auditors
Deloitte Touche Tohmatsu · Ernst & Young · KPMG · PricewaterhouseCoopers
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