KPMG

From Wikicpa

KPMG is one of the largest professional services firms in the world. KPMG employs 104,000 people in a global network spanning 144 countries. Composite revenues of KPMG member firms in 2005 were $15.7 billion USD. KPMG has three lines of services: audit services, tax services, and advisory services. KPMG is a Big 4 accountancy firm, along with PricewaterhouseCoopers, Ernst & Young and Deloitte Touche Tohmatsu.

1 Name
2 History
3 Legal Structure and Executives
4 Audit Clients
5 Tax shelter fraud
6 External links

[edit]

Name

K stands for Klynveld. This originates from the accounting firm Klynveld Kraayenhof & Co. founded by Piet Klynveld in Amsterdam in 1917.
P is for Peat, originating from the accounting firm William Barclay Peat & Co., which was founded by William Barclay Peat in London in 1870.
M stands for Marwick. James Marwick founded the accounting firm Marwick, Mitchell & Co. together with Roger Mitchell in New York City in 1897.
G is for Goerdeler. Dr. Reinhard Goerdeler was for many years chairman of the German Deutsche Treuhand-Gesellschaft (DTG) and later chairman of KPMG. He is credited with laying much of the groundwork for the KMG merger.

[edit]

History

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, Klynveld merged with Deutsche Treuhand-Gesellschaft (DTG) and McLintock Main Lafrentz to form Klynveld Main Goerdeler (KMG).
In 1987 both firms joined forces in the first mega-merger of large accounting firms and formed KPMG.
In 1997, KPMG and Ernst & Young announced that they were to merge, in a maneuver 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 and the KPMG/Ernst & Young tie-up was later abandoned.
In 2001, KPMG divested its US consulting firm through an IPO of KPMG Consulting Inc, which is now called BearingPoint, Inc.. A song that was produced for KPMG, Our Vision of Global Strategy, experienced a brief period of Internet notoriety.
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, KPMG LLP admitted criminal wrongdoing in multi-billion dollar tax shelter fraud.

[edit]

Legal Structure and Executives

Each national KPMG firm is an independent legal entity and is a member of KPMG International, a Swiss Verein headquartered in the Netherlands.

KPMG International is led by:

Michael D.V. Rake, Chairman, Senior Partner of KPMG in the United Kingdom;
Michael P. Wareing, CEO, Partner of KPMG in the United Kingdom;
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.

[edit]

Audit Clients

KPMG member firms serve as the Independent Auditors for a large number of major corporations:

Retail & Consumer Products: The Home Depot, PepsiCo, J.C. Penney, Nestlé, The Hershey Company, Yum! Brands, Supervalu, General Mills, CVS Pharmacy, Carlsberg, ConAgra Foods, Burger King, Jack in the Box, Diageo, Heineken, Federated Department Stores, Winn-Dixie, Publix Super Markets, Hasbro
Travel and Transportation: US Airways, Air France-KLM (joint auditors with Deloitte), Cathay Pacific, Norfolk Southern Railway, easyJet, Amtrak
Technology: Apple Computer, CA Inc., EDS
Media: NBC Universal, Sony BMG, Bertelsmann
Telecoms: Qwest, SprintNextel, Embarq, CenturyTel, Citizens Communications
Energy: Citgo, Murphy Oil, Valero, Occidental Petroleum, Reliant Energy, Halliburton
Industrial Products: General Electric, DaimlerChrysler, Honda, BMW, Matsushita Electric Industrial Co., Mitsubishi Electric, Weyerhaeuser, Siemens AG, Cemex, Navistar International
Financial Services: Citigroup, Wells Fargo, Wachovia, HSBC, H&R Block, Standard Chartered Bank, ING Group, Deutsche Bank, Allianz, Munich Re, Credit Suisse, Nationwide Financial, Countrywide Financial
Mining: BHP Billiton

[edit]

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. Under an agreement, 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 will not face criminal prosecution as long as it complies with the terms of its agreement with the government.

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.

[edit]