(merger of Peat Marwick International and Klynveld Main Goerdeler)
1818 (Oldest component: Grace, Darbyshire, & Todd)
|J. B. Veihmeyer (chairman)|
|Revenue||US$25.42 billion (2016)|
Number of employees
Seated in Amsterdam, the Netherlands, KPMG employs 189,000 people and has three lines of services: financial audit, tax, and advisory. Its tax and advisory services are further divided into various service groups.
The name "KPMG" stands for "Klynveld Peat Marwick Goerdeler." It was chosen when KMG (Klynveld Main Goerdeler) merged with Peat Marwick.
Early years and mergers
Spanning three centuries, the organization'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.
In March 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 1963 Main LaFrentz & Co was formed by the merger of Main & Co and FW LaFrentz & Co. In 1969 Thomson McLintock and Main LaFrentz merged forming McLintock Main LaFrentz International.
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. In the United States, Main Lafrentz & Co. merged with Hurdman and Cranstoun to form Main Hurdman & Cranstoun.
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 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 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.
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.
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.
KPMG is registered as a multidisciplinary entity which also provides legal services.
KPMG is organised into the following three service lines (the 2016 revenue shares are listed in parentheses):
Community involvement and advocacy
In March 2017 KPMG launched a campaign designed to encourage more women to pursue careers in technology-based professions.
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, 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.
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 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 2008 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 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.
In August 2011, 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.
In April 2013, 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 2015, KPMG was accused by the Canada Revenue Agency of Tax evasion schemes. "The CRA alleges that the KPMG tax structure was in reality a "sham" that intended to deceive the taxman.".
In 2017, KPMG terminated five partners in its audit practice, including the head of its audit practice in the United States, after an investigation of advanced confidential knowledge of planned audit inspections by its regulator. This followed criticism about KPMG's failure of uncovering illegal sales practices at Wells Fargo or potential corruption at FIFA, the governing international body of soccer. It is reported in 2017 that KPMG had the highest number of deficiencies, among the Big Four, cited by its regulator in the previous two years.
KPMG tax shelter fraud
In 2002, I.R.S. issued summonses to KPMG for information about certain tax shelters and their investors. In February 2004, the U.S. justice Department commenced a criminal inquiry. The United States member firm, KPMG LLP, has been accused by the United States Department of Justice of fraud in marketing abusive tax shelters. KPMG fired or forced the retirement of over a dozen who were involved. KPMG LLP admitted criminal wrongdoing in creating fraudulent tax shelters to help wealthy clients avoid $2.5 billion in taxes between 1996 and 2002 and agreed to pay $456 million in penalties to avoid indictment. Under the 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.
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.
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.
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.
- 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
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