KPMG: Difference between revisions
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=== 2013 === |
=== 2013 === |
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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.<ref name=wsj9>{{cite news|last=Rapoport|first=Michael|title=Guilty Plea in KPMG Case|url=http://online.wsj.com/news/articles/SB10001424127887323826804578467333522974930|publisher=[[The Wall Street Journal]]|accessdate=8 September 2014 |date=6 May 2013}}</ref> 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.<ref name=R9>{{cite news|last=Flitter|first=Emily|title=Friend of ex-KPMG auditor pleads guilty in insider case|url=http://www.reuters.com/article/2013/05/06/us-kpmg-idUSBRE9450SR20130506|publisher=[[Reuters]]|accessdate=8 September 2014|date=6 May 2013}}</ref> This scandal led KPMG to resign as auditor for two companies.<ref>{{cite news|url=http://online.wsj.com/news/articles/SB10001424127887323550604578411812224197182 |title=Trading Case Embroils KPMG |work=[[The Wall Street Journal]] |date=9 April 2013 |accessdate=8 September 2014}}</ref> |
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.<ref name=wsj9>{{cite news|last=Rapoport|first=Michael|title=Guilty Plea in KPMG Case|url=http://online.wsj.com/news/articles/SB10001424127887323826804578467333522974930|publisher=[[The Wall Street Journal]]|accessdate=8 September 2014 |date=6 May 2013}}</ref> On May 6 Shaw agreed to plead guilty to one count of conspiracy to commit [[securities fraud]]. He also agreed to pay around $1.3 million in restitution and will continue to cooperate with the government as part of a plea deal with federal prosecutors.<ref name=R9>{{cite news|last=Flitter|first=Emily|title=Friend of ex-KPMG auditor pleads guilty in insider case|url=http://www.reuters.com/article/2013/05/06/us-kpmg-idUSBRE9450SR20130506|publisher=[[Reuters]]|accessdate=8 September 2014|date=6 May 2013}}</ref> This scandal led KPMG to resign as auditor for two companies.<ref>{{cite news|url=http://online.wsj.com/news/articles/SB10001424127887323550604578411812224197182 |title=Trading Case Embroils KPMG |work=[[The Wall Street Journal]] |date=9 April 2013 |accessdate=8 September 2014}}</ref> |
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=== 2015 === |
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The KPMG branch in Mauritius was accused to be involved in a mega BAI ponzi scheme (British American Insurance), worth around US$ 100 millions. KPMG was the main auditor of BAI company for several years prior to the revelation of the scandal. <ref>http://www.lemauricien.com/article/bai-kpmg-situe-2010-l-origine-du-ponzi</ref> |
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== Sponsorship == |
== Sponsorship == |
Revision as of 21:59, 31 August 2015
Company type | Swiss Cooperative |
---|---|
Industry | Professional services |
Founded | 1987; merger of Peat Marwick International and Klynveld Main Goerdeler |
Headquarters | Amstelveen, Netherlands[1] |
Area served | Worldwide |
Key people | John B. Veihmeyer (Chairman) [2] |
Services | Assurance Tax advisory Consulting Financial advisory Actuarial Legal |
Revenue | US$26.5 billion (2015)[3] |
Number of employees | 162,000 (2014)[3] |
Website | www.kpmg.com |
KPMG is one of the largest professional services companies in the world and one of the Big Four auditors, along with Deloitte, EY and PwC. Its global headquarters is located in Amsterdam, the Netherlands.[1]
KPMG employs 162,000 people[3] 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.
History
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.[4] In 1877 accountancy firm Thomson McLintock opened an office in Glasgow.[4]
Meanwhile, in 1917 Piet Klijnveld opened his accounting firm in Amsterdam. Later he merged with Kraayenhof to form Klynveld Kraayenhof & Co.
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).[5]
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.[4] 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.[4]
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.[6]
In October 1997, KPMG and Ernst & Young announced that they were to merge.[7][8] However, while the merger to form PricewaterhouseCoopers was granted regulatory approval, the KPMG/Ernst & Young tie-up was later abandoned.[9][10]
Recent history
In 2001 KPMG divested its U.S. consulting firm through an initial public offering of KPMG Consulting Inc, which is now called BearingPoint, Inc.[11] In early 2009, BearingPoint filed for Chapter 11 bankruptcy protection.[12]
The UK and Dutch consulting arms were sold to Atos Origin in 2002.[13]
In 2003 KPMG divested itself of its legal arm, Klegal[14] and KPMG LLP sold its Dispute Advisory Services to FTI Consulting.[15]
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.[16][17] They appointed joint Chairmen, John Griffith-Jones and Ralf Nonnenmacher.[4] The new headquarters were located in Frankfurt, Germany.
Global structure
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.[18]
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.[19]
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.[20] On February 27, 2014 it was announced that Michael Andrew was retiring as Chairman due to illness [21] and that he would be succeeded by John B. Veihmeyer,[22] 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.[23]
Services
KPMG is organised into the following three service lines (the 2014 revenue shares are listed in parentheses):[24]
Tax arrangements relating to tax avoidance and multinational corporations and Luxembourg which were negotiated by KPMG became public in 2014 in the so-called Luxembourg Leaks.[25]
Awards
- No.2 in the 2011 World's Best Outsourcing Advisors – in recognition of the firm's depth of experience, global reach and holistic approach.[26]
- 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.[27]
- 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.[28][29] KPMG's global transfer pricing services in China and Hong Kong is headed by Chi Cheng.[30][31]
- Top 2 overall in Consultancy Rankings 2009 by OpRisk & Compliance – in recognition of KPMG's experience in risk management.[32]
- World's most attractive employers, 2010 – First of the Big Four.[33]
- KPMG Leads all the Big Four professional services giant firms (namely Delloite, PWC and Ernst & Young) on Fortune list of 100 best companies to work for.[34]
Staff
The US branch of KPMG was rated one of the top 10 companies for working mothers.[27] It is also ranked No. 56 on Fortune Magazine's 2009 list of 100 Best Companies to Work For, voted for by employees.[35]
KPMG was the preferred employer among the Big Four accounting firms according to CollegeGrad.com.[36] It was also ranked No.4 on the list of "50 Best Places to Launch a Career" in 2009 according to BusinessWeek.[37]
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.[38]
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.[39] 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.[40]
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.[41]
Accounting improprieties
2003
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.[42]
2004
In 2004, KPMG agreed to pay $115 million to settle lawsuits stemming from the collapse of software company Lernout & Hauspie Speech Products NV.[43][44]
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.[45]
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.
2006
Fannie Mae sued KPMG for malpractice for approving years of erroneous financial statements.[46]
2007
In February 2007, KPMG Germany was investigated for ignoring questionable payments in the Siemens bribery case.[47] In November 2008, the Siemens Supervisory Board recommended changing auditors from KPMG to Ernst & Young.[48]
2008
In March KPMG was accused of enabling "improper and imprudent practices" at New Century Financial, a failed mortgage company[49] and KPMG agreed to pay $80 million to settle suits from Xerox shareholders over manipulated earnings reports.[50]
It was announced in December that two of Tremont Group’s Rye Select funds, audited by KPMG, had $2.37 billion invested with the Madoff "Ponzi scheme."[51] Class action suits were filed.[52]
2010
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.[53]
2011
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.[54][55]
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.[56]
2013
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.[57] On May 6 Shaw agreed to plead guilty to one count of conspiracy to commit securities fraud. He also agreed to pay around $1.3 million in restitution and will continue to cooperate with the government as part of a plea deal with federal prosecutors.[58] This scandal led KPMG to resign as auditor for two companies.[59]
2015
The KPMG branch in Mauritius was accused to be involved in a mega BAI ponzi scheme (British American Insurance), worth around US$ 100 millions. KPMG was the main auditor of BAI company for several years prior to the revelation of the scandal. [60]
Sponsorship
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.[61]
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.[62]
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.[63][64]
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.[65]
See also
References
- ^ a b Your Planning Resource with Useful Tips and Techniques. John Wiley. 2008. p. 308. ISBN 978-0787996611.
- ^ "KPMG: Michael Andrew Retiring as Chairman; Has 'Serious Medical Condition'". Wall Street Journal. 27 February 2014. Retrieved 13 June 2015.
- ^ a b c "KPMG delivers strong growth and record revenues". Fortune. February 2015. Retrieved 18 April 2015.
- ^ a b c d e "KPMG – History". Rd.kpmg.co.uk.
- ^ Family tree: Peat Marwick McLintock ICEAW
- ^ Note: KPMG derived from predecessor company founders: Piet Klijnveld, William Barclay Peat, James Marwick, and Reinhard Goerdeler.
- ^ "Ernst & Young, KPMG Peat Marwick to merge New company would be largest accounting, consulting firm in world". Baltimore Sun. 21 October 1997. Retrieved 5 September 2014.
- ^ "KPMG Partners Vote For Ernst Merger". The New York Times. 22 December 1997. Retrieved 5 September 2014.
- ^ "Accountancy merger off". BBC News. 13 February 1998. Retrieved 5 September 2014.
- ^ "KMPG and Ernst call off $18bn accountancy mega-merger". The Independent. 14 February 1998. Retrieved 5 September 2014.
- ^ "KPMG Consulting becomes BearingPoint". ITworld. 2 October 2002. Retrieved 5 September 2014.
- ^ Lazo, Alejandro (19 February 2009). "BearingPoint Seeks Bankruptcy Protection". The Washington Post.
- ^ Aldrick, Philip (6 June 2002). "KPMG stuns with French Atos sale". The Telegraph. Retrieved 5 September 2014.
- ^ "KPMG ditches legal ambitions in KLegal split". Legal Week. 6 November 2003. Retrieved 5 September 2014.
- ^ "FTI Consulting Completes Acquisition of Dispute Advisory Services Business Of KPMG". FTI Consulting. 3 November 2003. Retrieved 5 September 2014.
- ^ "Norway and Saudi Arabia to join KPMG Europe LLP". Consultant-news.com. 1 November 2010. Retrieved 5 September 2014.
- ^ "Norway and Saudi Arabia to join KPMG Europe LLP". KPMG International. 30 November 2010. Retrieved 5 September 2014.
- ^ Handelsregister des Kantons Zug (Registration Number CH-020.6.900.276-5)
- ^ This is illustrated in the cases involving Parmalat where clients sought to hold Deloitte (the Swiss Verein)and Grant Thornton International (a UK company providing administrative services to its members) liable for the negligence of other member firms.
- ^ "Australia's Michael Andrew named KPMG's global chairman". International Business Times. 12 May 2011. Retrieved 5 September 2014.
- ^ Rapoport, Michael (27 February 2014). "KPMG: Michael Andrew Retiring as Chairman; Has 'Serious Medical Condition'". Wall Street Journal. Retrieved 4 March 2014.
- ^ "John B. Veihmeyer Selected Global Chairman Of KPMG". KPMG Press release. 27 February 2014. Retrieved 6 October 2014.
- ^ "All Your Profits Are Belong To Us". Above the law. 5 November 2014. Retrieved 6 November 2014.
- ^ "KPMG International Annual Review" (PDF). KPMG.
- ^ "Disney and Skype 'used Luxembourg tax deals'". BBC. Retrieved 18 January 2015.
- ^ "IOAP 2011 Worlds Best Outsourcing Advisors". Retrieved 5 September 2014.
- ^ a b "Working Mother 100 Best Companies for 2011 Press Release". Working Mother. 15 September 2011.
- ^ "KPMG wins International Tax Review 2010 Awards". KPMG China.
- ^ "KPMG wins International Tax Review 2010 Awards". KPMG China. 23 November 2010.
- ^ KPMG China GTPS site
- ^ "China: How China has developed its transfer pricing rules". International Tax Review. 23 March 2011.
- ^ Top 2 overall in Consultancy Rankings 2009 by OpRisk & Compliance
- ^ World's most attractive employers, 2010 - First of the Big Four
- ^ "KPMG Leads Big Four On Fortune's List Of 100 Best Companies To Work For". Retrieved 18 April 2015.
- ^ "100 Best Companies to work for (2009)". Fortune. 2 February 2009. Retrieved 5 September 2014.
- ^ "KPMG Named the Top Big Four Accounting Firm by CollegeGrad.com". CollegeGrad.com. 5 March 2008. Retrieved 5 September 2014.
- ^ Lavelle, Louis. "Best Places to Launch a Career (2009)". Bloomberg Businessweek. Retrieved 5 September 2014.
- ^ Katherine Griffiths (3 April 2013). "Best 100 Companies". The Times. Archived from the original on 9 October 2013.
{{cite web}}
: Unknown parameter|deadurl=
ignored (|url-status=
suggested) (help) - ^ Sam Fleming (16 January 2009). "Four day week as work dries up: KPMG offers 11,000 staff dramatic cut in hours to save jobs". Daily Mail. London.
- ^ "Reasons for Selection, 2009 Canada's Top 100 Employers Competition".
- ^ Jones, Adam (25 January 2012). "China headcount to overtake UK at top firms". Financial Times. Archived from the original on 2 September 2014.
- ^ "China headcount to overtake UK at top firms". Baltimore Sun. 11 March 2003. Retrieved 5 September 2014.
- ^ Taub, Stephen (12 October 2004). "KPMG Pays $115 Million to Settle Suit". CFO. Retrieved 5 September 2014.
- ^ Margaret Cronin Fisk (7 October 2004). "KPMG to Pay $115 Mln to Settle Lernout & Hauspie Suit". Bloomberg. Retrieved 8 September 2014.
- ^ Johnson, Carrie (4 January 2007). "Charge Against KPMG Dropped". The Washington Post. Retrieved 8 September 2014.
- ^ Hilzenrath, David S. (13 December 2006). "Fannie Sues KPMG for Approving Bad Numbers". The Washington Post. Retrieved 8 September 2014.
- ^ Esterl, Mike (24 February 2007). "KPMG Germany's Failure to Spot Siemens Problems Raises Questions". The Wall Street Journal. Retrieved 8 September 2014.
- ^ "Siemens Supervisory Board Proposes Ernst & Young As Auditors". Easybourse.com. 10 May 2012. Archived from the original on 8 October 2013.
{{cite web}}
: Unknown parameter|deadurl=
ignored (|url-status=
suggested) (help) - ^ Bajaj, Vikas (26 March 2008). "Report Assails Auditor for Work at Failed Home Lender". The New York Times. Retrieved 8 September 2014.
- ^ "Xerox, KPMG Settle Shareholder Suit". The Wall Street Journal. 28 March 2008. Retrieved 8 September 2014.
- ^ Mackintosh, James (18 December 2008). "Accounting firms drawn into Madoff scandal". Financial Times. Archived from the original on 5 September 2014.
- ^ Docket, Securities (20 February 2009). "Madoff-related class action filed in SDNY against Tremont Group, KPMG, others". Securities Docket.
- ^ "HQ Bank accountant KPMG reported after flaws". The Swedish Wire. 30 August 2010.
- ^ Singh, Rachael (20 November 2012). "KPMG conducted due diligence of Deloitte audit at Autonomy". Accountancy Age. Retrieved 8 September 2014.
- ^ Hardy, Quentin (20 November 2012). "Hewlett's Loss: A Folly Unfolds, by the Numbers". The New York Times. Retrieved 8 September 2014.
- ^ "The Culture Was Corrupt at Olympus, Panel Finds". The New York Times. 6 December 2011. Retrieved 8 September 2014.
- ^ Rapoport, Michael (6 May 2013). "Guilty Plea in KPMG Case". The Wall Street Journal. Retrieved 8 September 2014.
- ^ Flitter, Emily (6 May 2013). "Friend of ex-KPMG auditor pleads guilty in insider case". Reuters. Retrieved 8 September 2014.
- ^ "Trading Case Embroils KPMG". The Wall Street Journal. 9 April 2013. Retrieved 8 September 2014.
- ^ http://www.lemauricien.com/article/bai-kpmg-situe-2010-l-origine-du-ponzi
- ^ "''Från skott till skatt''". Aftonbladet. 24 March 2002.
- ^ "Mickelson signs agreement with KPMG LLP". PGA Tour. 6 February 2008.
- ^ Kirbyson, Geoff (April 2010). "Golden opportunity for KPMG and skier". The Bottom Line. Retrieved 8 September 2014.
- ^ Newquist, Caleb (18 February 2010). "Alexandre Bilodeau Is KPMG Canada's Phil Mickelson". The Going Concern. Retrieved 8 September 2014.
- ^ "KPMG & McLaren join forces to transform services". 21 November 2014. Retrieved 24 February 2015.