KPMG

KPMG
source
Name	KPMG
Type	Professional services network
Industry	Accounting
Founded	1987 (through merger)
Headquarters	Amstelveen, Netherlands
Area served	Global

KPMG is a multinational professional services network providing audit, tax, and advisory services across a wide range of sectors. The network operates through member firms in numerous countries and serves corporations, financial institutions, government-related entities, and non-profit organizations. Its activities intersect with major financial markets, regulatory systems, and multinational transactions, placing it frequently in the public eye alongside other large accounting networks.

History

The modern network traces roots to 19th- and 20th-century firms including Peat Marwick Mitchell, Lybrand, Peat, Marwick Mitchell & Co., and Klynveld Kraayenhof & Co.. The 1987 merger that created the contemporary structure followed trends seen in mergers such as Arthur Andersen with other firms, and mirrored consolidation patterns from the Big Eight to the Big Four. Over subsequent decades the network expanded through alliances, regional mergers, and establishment of member firms in markets such as United States, United Kingdom, Japan, China, India, Germany, and Australia. Major global events—like the Enron scandal, the Global Financial Crisis of 2007–2008, and regulatory reforms such as the aftermath of the Sarbanes–Oxley Act—shaped public expectations for auditors and influenced the network’s strategies. The organization’s historical trajectory also intersected with corporate governance debates involving institutions like the Securities and Exchange Commission, Financial Reporting Council (United Kingdom), and European Commission.

Organization and Governance

The network is structured as a cooperative of independent member firms licensed to use a common name and methodologies, comparable to other networks such as Deloitte, PricewaterhouseCoopers, and Ernst & Young. Governance arrangements involve a global board, regional boards, and national leadership, with oversight mechanisms that echo practices of international bodies like the International Federation of Accountants and standards set by the International Auditing and Assurance Standards Board. Executive leadership has interacted with regulators including the Public Company Accounting Oversight Board and professional bodies such as the Institute of Chartered Accountants in England and Wales and the American Institute of Certified Public Accountants. The member-firm model affects professional liability, regulatory responsibility, and cross-border coordination during multinational audits or advisory engagements.

Services and Operations

Member firms provide statutory audit, financial statement audit, tax compliance, tax advisory, transaction advisory, risk consulting, management consulting, and technological services including digital transformation and cybersecurity. Service lines often align with client needs in sectors represented by organizations such as Goldman Sachs, JPMorgan Chase, ExxonMobil, Toyota Motor Corporation, and Siemens. Cross-border operations require coordination with stock exchanges like the New York Stock Exchange, London Stock Exchange, and Shanghai Stock Exchange when assisting with initial public offerings, mergers and acquisitions, and financial reporting. The network also delivers industry-specific services in areas aligned with entities such as World Bank, International Monetary Fund, European Investment Bank, and national development banks.

Major Clients and Industry Presence

Member firms serve clients across banking, energy, healthcare, technology, consumer goods, and government-related entities. High-profile engagements have involved corporations comparable to General Electric, Royal Dutch Shell, Microsoft, Apple Inc., Pfizer, and HSBC. Presence in capital markets has linked the network to corporate events like mergers involving Citigroup, BP, Volkswagen, and cross-border transactions under scrutiny by regulators such as the Department of Justice (United States) and competition authorities including the European Commission Directorate-General for Competition. The network’s advisory work in technology and data services has overlapped with companies such as Amazon (company), Alphabet Inc., Facebook, and major consulting recipients like Procter & Gamble.

Controversies and Legal Issues

The network and its member firms have faced litigation, regulatory investigations, and high-profile resignations related to audit failures, alleged conflicts of interest, and corporate governance lapses. These controversies have paralleled incidents involving firms such as Arthur Andersen and regulatory actions by bodies like the Securities and Exchange Commission, UK Financial Reporting Council, and national prosecutors. Notable legal matters have touched on engagements with companies comparable to Wirecard, Tesco, and Rolls-Royce in public discourse, while settlements and fines have emerged in jurisdictional processes involving courts and tribunals including High Court of England and Wales and federal courts in the United States. The challenges have prompted debates on auditor rotation, independence rules influenced by legislation akin to the Sarbanes–Oxley Act, and proposals for structural reforms advocated by policy makers in the European Union and national legislatures.

Corporate Responsibility and Sustainability

The network has publicized initiatives in corporate responsibility, sustainability reporting, and climate-related advisory aligned with frameworks such as the Task Force on Climate-related Financial Disclosures and reporting standards developed by organizations like the Global Reporting Initiative. Engagements often intersect with sustainability goals promoted by institutions such as the United Nations and its initiatives including United Nations Global Compact and the Sustainable Development Goals. The member firms provide assurance services for non-financial information and advise on decarbonization strategies used by corporations in sectors represented by entities like Iberdrola, BP, and Tesla, Inc.. Corporate citizenship programs have partnered with foundations, academic institutions such as London School of Economics and Harvard Business School, and philanthropic organizations to address workforce development and diversity objectives.

Category:Accounting firms