is one of the largest services,
Tax services, and
Advisory services. KPMG is a
Big Four Auditor , alongside
PricewaterhouseCoopers ,
Ernst & Young and
Deloitte Touche Tohmatsu .
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.
- 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 .
- 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 .
- 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 2006 , KPMG’s member firms in the UK and Germany proposed to merge and form a single entity, KPMG Europe LLP. With a projected turnover for the UK and German firms in excess of £2 billion in 2009, KPMG Europe LLP will most likely be the largest fully integrated accountancy firm in Europe.
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.Handelsregister des Kantons Zug (Registration Number CH-020.6.900.276-5), http://hrazg.ch/
KPMG International is led by:
- Sir Michael Rake , Chairman, Senior Partner of KPMG in the United Kingdom. Timothy P. Flynn, Chairman and CEO of KPMG LLP, should become the next chairman as for October, 1st of 2007, since Michael Rake will manage BT Group plc as chairman ;
- 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.
KPMG member firms serve as the independent auditors for a large number of major corporations:
- Accenture , Gartner , Shaw Group
- Lend Lease Corporation , AMEC , Carillion , KBR , Tishman Speyer , Jones Lang LaSalle
- Devon Energy , Citgo , Halliburton , LUKoil , Murphy Oil , Occidental Petroleum , Petrobras , Reliant Energy , Sinopec , Husky , TransCanada Pipelines , Valero Energy Corporation
- ABN AMRO , Allianz , Allstate Corporation , Bank Of New York Mellon Corporation , American Express , Aon Corporation , Citigroup , Countrywide Financial , Credit Suisse , Deutsche Bank , Deutsche Börse , Dresdner Bank , First Republic Bank , Hang Seng Bank , HBOS , H&R Block , HSBC , International Bank Of Commerce , ING Group , Legg Mason , MassMutual Financial Group , Munich Re , Nationwide Financial , Old Mutual , Salomon Smith Barney , Standard Chartered Bank , Visa International , Wachovia , Wells Fargo
- St. Mary's University , CPS Energy , City of San Antonio , Georgia Lottery , State Of Texas , State Of Illinois
- Ansell , Caremark , Kaiser Foundation
- BASF , BMHC , BMW , Cemex , DaimlerChrysler , General Electric , Honda , Matsushita Electric Industrial Co. , Mitsubishi Electric , Navistar International , Siemens AG , Weyerhaeuser
- BBC , Bertelsmann , ITV , Metro International , National Geographic Society , NBC Universal , RH Donnelley , RealNetworks , Sony BMG , Wolters Kluwer
- BHP Billiton
- Pfizer
- Arla , Burger King , Carlsberg , ConAgra Foods , Costco , CVS Pharmacy , Diageo , Federated Department Stores , Jack In The Box , J.C. Penney , General Mills , Hasbro , Heineken , Nestlé , Netflix , PepsiCo , Publix Super Markets , R.J. Reynolds Tobacco , Supervalu , The Hershey Company , The Home Depot , Maple Leaf Foods , Winn-Dixie , Yum! Brands , PGA Tour Superstore
- Apple Computer , Boston Scientific , Carl Zeiss AG , CA Inc. , CNET Networks , Dolby Laboratories , Electronic Arts , EDS , Ericsson , LG Group , Motorola , WebEx , Nortel , Philips , Samsung , Sanmina-SCI , Siemens , TiVO , VeriSign
- Cable & Wireless , CenturyTel , China Mobile , Citizens Communications , Embarq , PCCW , Rogers Communications , SprintNextel , Qwest
- Alaska Airlines , Amtrak , Cathay Pacific , EasyJet , EWS , Norfolk Southern Railway , US Airways , WestJet , Qantas
See Also: 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 $456 million in penalties in exchange for a deferred prosecution agreement. KPMG LLP would not face criminal prosecution if it complied with the terms of its agreement with the government. On January 3, 2007, the criminal conspiracy charges against KPMG were dropped.
Charge Against KPMG Dropped Carrie Johnson, January 4, 2007, Washington Post However, Federal Attorney Michael J. Garcia stated that the charges could be reinstated if KPMG does not continue to submit to continued monitorship through September 2008.
Prosecutors end tax-shelter case against KPMG, dropping charge after settlement January 3, 2007, International Herald Tribune
Before the settlement, the firm, on the advice of its counsel Skadden, Arps, Slate, Meagher & Flom LLP, removed several tax partners and admitted "unlawful conduct" by those partners. The firm agreed to cooperate with DOJ's investigation and help prosecute former partners who had devised and sold the tax shelters. Additionally, the firm hired former U.S. district judge Sven Erik Holmes to monitor its legal and regulatory affairs.
In 1995 it was unveiled that the financial statements of Banco Nacional S.A., a banking corporation which was audited for more than fifteen years by KPMG Brazil, had been under fradulent manipulation for more than eight years. Although those financial statements pointed a net equity of some US$ 800 million in december of 1994, this being without any remark from KPMG, Banco Nacional S.A. was in a very different financial situation with accrued losses of about US$ 6 billion.
In a criminal lawsuit not ended as of April 2007, KPMG Brazil's partner Marco Aurélio Diniz Maciel was twice convicted for his role on the supervision of the audit of Banco Nacional S.A..
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There are some lawsuits against KPMG filed by individual shareholders as well as a Class Action filed by Federal Attorneys at the Federal Capital District Court in order to seek reparation for shareholders.
The Banco Nacional scandal prompted a large debate about the role of independent auditing in Brazil and may still have repercussions on KPMG activities worldwide, mainly derived from the interdependence associated with the auditing of the many regional branches of multinational corporations.
The firm has also achieved widespread notoriety for its corporate anthem, entitled "Our Vision of Global Strategy". The song has enjoyed cult status online and at many business schools, such as the
Richard Ivey School Of Business . Although the anthem was officially released by KPMG as a motivational tool, upper management has since disowned the song (though it remains popular with many employees).
