KPMG

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KPMG

Type	Swiss Verein
Founded	1987; individual components from 1870
Headquarters	Amsterdam, Netherlands
Key people	Michael D.V. Rake, Chairman
Industry	Professional services
Products	Audit Tax Advisory
Revenue	$15.7 billion USD (2005)
Employees	104,000
Website	www.kpmg.com

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 Notable current and former employees
7 See also
8 External links

[edit] Name

The title of the firm, KPMG, is not actually an acronym. However, the roots of the name stem from four partners in the firms that merged to form KPMG.

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 1870, William Barclay Peat formed an accounting firm in London, England
In 1911, William Barclay Peat & Co. and Marwick Mitchell & Co. merged to form what would later be known as Peat Marwick International (PMI).

The Peat Marwick logo.
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 while 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.

The KPMG logo used by member firms in the 1990s

[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;
Dominic C.F. Ho 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.

[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, R.J. Reynolds Tobacco, Levi Strauss & Co., Amazon.com, Anheuser-Busch
Travel and Transportation: US Airways, Cathay Pacific, Norfolk Southern Railway, easyJet, Amtrak
Technology: Apple Computer, CA Inc., EDS, LG, Samsung, Motorola, Philips, Siemens, Electronic Arts, Dolby Laboratories, Ericsson, CNET Networks, Electronic Data Systems, Sanmina-SCI, Boston Scientific
Media: NBC Universal, Sony BMG, Bertelsmann, RH Donnelley, BBC, ITV, RealNetworks, Metro International, Wolters Kluwer
Telecoms: Qwest, SprintNextel, Embarq, CenturyTel, Citizens Communications, PCCW, China Mobile, Cable & Wireless
Energy: Citgo, Murphy Oil, Valero, Occidental Petroleum, Reliant Energy, Halliburton, Sinopec
Industrial Products: General Electric, DaimlerChrysler, Honda, BMW, Matsushita Electric Industrial Co., Mitsubishi Electric, Weyerhaeuser, Siemens AG, Cemex, Navistar International, BMHC, 3M
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, Visa International, Salomon Brothers, Hang Seng Bank, First Republic Bank, MassMutual Financial Group, Deutsche Borse, ABM AMRO, AllState, American Express, Aon
Consulting: Accenture, Bearing Point
Mining: BHP Billiton
Healthcare: Kaiser Foundation, Caremark

[edit] Tax shelter fraud

Main article: 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. 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] Notable current and former employees

[edit] Business

Margaret Jackson - chairwoman of Qantas (2000-present)
Syd Kessler - entrepreneur
Michael O'Leary - CEO of Ryanair (1994-present)
Zarin Patel - CFO of the BBC
Colin Sharman, Baron Sharman - chairman of Aviva (2006-present)

[edit] Politics and public service

Jerry Finnell - Mayor of Del Mar, California (2004-present)
Nick Gibb - Member of the British Parliament (1997-present)
Mark Harper - Member of the British Parliament (2005-present)
Toby Harris, Baron Harris of Haringey - member of the London Assembly(2000-04); chairman of the Metropolitan Police Authority (2000-04)
Michael Hirst - Member of the British Parliament (1983-87)
Edmund Ho - Chief Executive of Macau (1999-present)
Kevin Rudd - member of the Australian House of Representatives (1998-present)
Rita Verdonk - Minister for Integration and Immigration (2003–present)