|Founded||1987(merger of Peat Marwick International and Klynveld Main Goerdeler)|
|J. B. Veihmeyer (Chairman)|
|Revenue||US$24.44 billion (2015)|
Number of employees
Seated in Amsterdam, the Netherlands, KPMG employs 174,000 people and has three lines of services: audit, tax, and advisory. Its tax and advisory services are further divided into various service groups.
The name "KPMG" was chosen when KMG (Klynveld Main Goerdeler) merged with Peat Marwick.
Early years and mergers
The firm's history dates back to 1870 when William Barclay Peat joined an accounting firm in London and took it over, as William Barclay Peat & Co., in 1891. In 1877 accountancy firm Thomson McLintock opened an office in Glasgow. In 1897 Marwick Mitchell & Co. was founded by James Marwick and Roger Mitchell in New York City. In 1899 Ferdinand William LaFrentz founded the American Audit Co., in New York, which was renamed FW LaFrentz & Co in 1923.
Meanwhile, in 1917 Piet Klijnveld and Jaap Kraayenhof opened an accounting firm called Klynveld Kraayenhof & Co. in Amsterdam. On the other side of the Atlantic, Frank Wilber Main founded Main & Co. in Pittsburgh in about 1913.
In 1925 William Barclay Peat & Co. and Marwick Mitchell & Co. (a firm founded by James Marwick and Roger Mitchell in New York), merged to form Peat Marwick Mitchell & Company (later known simply as Peat Marwick).
In 1979 Klynveld Kraayenhof & Co. (Netherlands), McLintock Main LaFrentz (United Kingdom / 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. 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.
In October 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.
In 2001 KPMG divested its U.S. consulting firm through an initial public offering of KPMG Consulting Inc, which is now called BearingPoint, Inc. In early 2009, BearingPoint filed for Chapter 11 bankruptcy protection.
The UK and Dutch consulting arms were sold to Atos Origin in 2002.
In 2003 KPMG divested itself of its legal arm, Klegal and KPMG LLP sold its Dispute Advisory Services to FTI Consulting.
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 (Azerbaijan, Russia, Ukraine, Belarus, Kyrgyzstan, Kazakhstan, Armenia and Georgia), Turkey, Norway, and Saudi Arabia. They appointed joint Chairmen, John Griffith-Jones and Ralf Nonnenmacher. The new headquarters were located in Frankfurt, Germany.
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.
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 liability of each independent member.
Michael Andrew, previously Chairman of KPMG in Australia, assumed the Global Chairmanship in September 2011 and is based in Hong Kong. This is the first time a Big Four accounting organisation has had its global leader based in Asia Pacific. On February 27, 2014 it was announced that Michael Andrew was retiring as Chairman due to illness and that he would be succeeded by John B. Veihmeyer, a role he will perform alongside continuing as Chairman and Chief Executive Officer of KPMG’s U.S. firm. Veihmeyer is based in New York City.
- No.2 in the 2011 World's Best Outsourcing Advisors – in recognition of the firm's depth of experience, global reach and holistic approach.
- Inducted into Working Mother Hall of Fame after being honored for 15 years as one of Working Mother magazine's 100 Best Companies for Working Mothers.
- International Tax Review Asia Tax Awards, 2008–2010 – in recognition of the accomplishments of KPMG's Tax Services and Global Transfer Pricing Services team. KPMG China was awarded the 2010 Hong Kong Tax Firm of the Year and the 2010 China Transfer Pricing Firm of the Year at the International Tax Review's 2010 Asia Tax Awards ceremony in Singapore on 23 November 2010. KPMG's global transfer pricing services in China and Hong Kong is headed by Chi Cheng.
- Top 2 overall in Consultancy Rankings 2009 by OpRisk & Compliance – in recognition of KPMG's experience in risk management.
- World's most attractive employers, 2010 – First of the Big Four.
- KPMG Leads all the Big Four professional services giant firms (namely Deloitte, PWC and Ernst & Young) on Fortune list of 100 best companies to work for.
- Ranked number 13 in Consulting Magazine's Best Firms to Work for 2016
The US branch of KPMG was rated one of the top 10 companies for working mothers. It is also ranked No. 56 on Fortune Magazine's 2009 list of 100 Best Companies to Work For, voted for by employees.
KPMG was the preferred employer among the Big Four accounting firms according to CollegeGrad.com. It was also ranked No.4 on the list of "50 Best Places to Launch a Career" in 2009 according to BusinessWeek.
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. 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 eighth year in a row, KPMG was named one of "Canada's Top 100 Employers" by Mediacorp Canada Inc., and was featured in Maclean's news magazine. In November 2010, KPMG was also named one of Greater Toronto's Top Employers, which was announced by the Toronto Star newspaper.
In early 2012, it was reported that KPMG has about 9,000 staff in mainland China and Hong Kong, and 11,000 in the UK. Its global deputy chairman predicted that headcount in China will overtake that of the UK by the end of 2013.
In 2003, KPMG agreed to pay $125 million and $75 million to settle lawsuits stemming from the firm's audits of Rite Aid and Oxford Health Plans Inc respectively.
In 2004, KPMG agreed to pay $115 million to settle lawsuits stemming from the collapse of software company Lernout & Hauspie Speech Products NV.
2005 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 3 January 2007, the criminal conspiracy charges against KPMG were dropped.
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.
Fannie Mae sued KPMG for malpractice for approving years of erroneous financial statements.
In February 2007, KPMG Germany was investigated for ignoring questionable payments in the Siemens bribery case. In November 2008, the Siemens Supervisory Board recommended changing auditors from KPMG to Ernst & Young.
In March KPMG was accused of enabling "improper and imprudent practices" at New Century Financial, a failed mortgage company and KPMG agreed to pay $80 million to settle suits from Xerox shareholders over manipulated earnings reports.
In August 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.
In August KPMG conducted due diligence work on Hewlett Packard's $11.1 billion acquisition of the British software company Autonomy. In November 2012 HP announced a $8.8 billion write off due to "serious accounting improprieties" committed by Autonomy management prior to the acquisition.
According to an independent panel formed to investigate irregular payments made by Olympus which reported in December, KPMG's affiliate in Japan failed in its duty to uncover fraud.
In April, Scott London, a former KPMG LLP partner in charge of KPMG's US Los Angeles-based Pacific Southwest audit practice, admitted passing on stock tips about clients, including Herbalife (HLF.N), Skechers (SKX.N) and other companies, to his friend, Bryan Shaw, a California jewelry-store owner. In return Shaw gave London $60,000 as well as gifts that included a $12,000 Rolex watch. On May 6 Shaw agreed to plead guilty to one count of conspiracy to commit securities fraud. He also agreed to pay around $1.3 million in restitution and will continue to cooperate with the government as part of a plea deal with federal prosecutors. This scandal led KPMG to resign as auditor for two companies.
In 2016, the Canada Revenue Agency was found to have offered an amnesty to KPMG clients caught using an offshore tax-avoidance scheme on the Isle of Man.
The Swedish member firm was main sponsor for Swedish biathlete Magdalena Forsberg, six-time world champion and two-time Olympic medalist. Forsberg was working as a tax consultant at the KPMG Sundsvall office parallel to her athletic career.
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 was to wear the KPMG logo on his headwear during all golf related appearances.
KPMG and McLaren Technology Group have formed a strategic alliance to apply McLaren Applied Technologies’ (MAT) predictive analytics and technology to KPMG’s audit and advisory services. McLaren 2015 Formula 1 car has the KPMG logo engraved above the pilot seat.
- KPMG people
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