"Roger Mitchell" redirects here. For other uses, see Roger Mitchell (disambiguation).
Not to be confused with KMPG.
Swiss Cooperative
Industry Professional services
Founded 1987 (1987) (merger of Peat Marwick International and Klynveld Main Goerdeler)
Headquarters Amstelveen, Netherlands[1]
Area served
Key people
J. B. Veihmeyer (Chairman)[2]
Revenue Increase US$24.44 billion (2015)[3]
Number of employees
173,965 (2015)[3]

KPMG is a professional service company, being one of the Big Four auditors, along with Deloitte, EY and PwC.

Seated in Amsterdam,[1] the Netherlands, KPMG employs 174,000 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.


Early years and mergers

Current KPMG headoffice in Amstelveen, The Netherlands
15 Canada Square in Canary Wharf, London. The headquarters of KPMG in the UK.
Peat Marwick logo
Headquarters of KPMG LLP, the United States-based member firm of KPMG International, at 345 Park Avenue, New York City
The 34-story KPMG Tower on De Maisonneuve Boulevard in Montreal
The KPMG Tower at 355 South Grand Avenue in Los Angeles
KPMG offices at 150 West Jefferson in Detroit
KPMG at the Bay Adelaide West tower in Toronto

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] In 1897 Marwick Mitchell & Co. was founded by James Marwick and Roger Mitchell in New York City. In 1899 Ferdinand William LaFrentz founded the American Audit Co., in New York, which was renamed FW LaFrentz & Co in 1923.[5]

Meanwhile, in 1917 Piet Klijnveld and Jaap Kraayenhof opened an accounting firm called Klynveld Kraayenhof & Co. in Amsterdam. On the other side of the Atlantic, Frank Wilber Main founded Main & Co. in Pittsburgh in about 1913.[6]

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).[7]

In 1963 Main LaFerntz & Co was formed by the merger of Main & Co and FW LaFrentz & Co. In 1969 Thomson McLintock and Main LaFrentz merged forming McLintock Main LaFrentz International.[8]

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.[9]

In October 1997, KPMG and Ernst & Young announced that they were to merge.[10][11] However, while the merger to form PricewaterhouseCoopers was granted regulatory approval, the KPMG/Ernst & Young tie-up was later abandoned.[12][13]

Recent history

KPMG building in Kamloops, British Columbia

In 2001 KPMG divested its U.S. consulting firm through an initial public offering of KPMG Consulting Inc, which is now called BearingPoint, Inc.[14] In early 2009, BearingPoint filed for Chapter 11 bankruptcy protection.[15]

The UK and Dutch consulting arms were sold to Atos Origin in 2002.[16]

In 2003 KPMG divested itself of its legal arm, Klegal[17] and KPMG LLP sold its Dispute Advisory Services to FTI Consulting.[18]

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.[19][20] They appointed joint Chairmen, John Griffith-Jones and Ralf Nonnenmacher.[4] The new headquarters were located in Frankfurt, Germany.

Global structure

KPMG office in the Squaire building at Frankfurt Airport

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.[21]

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.[22]

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.[23] On February 27, 2014 it was announced that Michael Andrew was retiring as Chairman due to illness [24] and that he would be succeeded by John B. Veihmeyer,[25] 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.[26]


KPMG is organised into the following three service lines (the 2014 revenue shares are listed in parentheses):[27]

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.[28]



The US branch of KPMG was rated one of the top 10 companies for working mothers.[30] It is also ranked No. 56 on Fortune Magazine's 2009 list of 100 Best Companies to Work For, voted for by employees.[39]

KPMG was the preferred employer among the Big Four accounting firms according to[40] It was also ranked No.4 on the list of "50 Best Places to Launch a Career" in 2009 according to BusinessWeek.[41]

In 2009, 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.[42]

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.[43] 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.[44]

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.[45]

Accounting improprieties


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.[46]


In 2004, KPMG agreed to pay $115 million to settle lawsuits stemming from the collapse of software company Lernout & Hauspie Speech Products NV.[47][48]

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.[49]

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.


Fannie Mae sued KPMG for malpractice for approving years of erroneous financial statements.[50]


In February 2007, KPMG Germany was investigated for ignoring questionable payments in the Siemens bribery case.[51] In November 2008, the Siemens Supervisory Board recommended changing auditors from KPMG to Ernst & Young.[52]


In March KPMG was accused of enabling "improper and imprudent practices" at New Century Financial, a failed mortgage company[53] and KPMG agreed to pay $80 million to settle suits from Xerox shareholders over manipulated earnings reports.[54]

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."[55] Class action suits were filed.[56]


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.[57]


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.[58][59]

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.[60]


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.[61] 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.[62] This scandal led KPMG to resign as auditor for two companies.[63]


In 2015, KPMG was accused by the Canada Revenue Agency of Tax evasion schemes. "The CRA alleges that the KPMG tax structure was in reality a "sham" that intended to deceive the taxman.".[64]


In 2016, the Canada Revenue Agency was found to have offered an amnesty to KPMG clients caught using an offshore tax-avoidance scheme on the Isle of Man.[65]


The Swedish member firm was main sponsor for Swedish biathlete Magdalena Forsberg, six-time world champion and two-time Olympic medalist. Forsberg was working as a tax consultant at the KPMG Sundsvall office parallel to her athletic career.[66]

Phil Mickelson Wearing KPMG Hat

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.[67]

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.[68][69]

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.[70]

See also


  1. 1 2 Your Planning Resource with Useful Tips and Techniques. John Wiley. 2008. p. 308. ISBN 978-0787996611.
  2. "KPMG: Michael Andrew Retiring as Chairman; Has 'Serious Medical Condition'". Wall Street Journal. 27 February 2014. Retrieved 13 June 2015.
  3. 1 2 3 "2015 KPMG International Annual Review". Retrieved 10 December 2015.
  4. 1 2 3 4 5 "KPMG – History".
  5. Grant, Julia (1995). New York State Society of Certified Public Accountants: Foundation of a Profession. Routledge. p. 212. ISBN 978-0815322382.
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  7. Family tree: Peat Marwick McLintock ICEAW
  8. "The forces of deinstiutionalisation and demise" (PDF). Retrieved 28 June 2016.
  9. Note: KPMG derived from predecessor company founders: Piet Klijnveld, William Barclay Peat, James Marwick, and Reinhard Goerdeler.
  10. "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.
  11. "KPMG Partners Vote For Ernst Merger". The New York Times. 22 December 1997. Retrieved 5 September 2014.
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  21. Handelsregister des Kantons Zug (Registration Number CH-020.6.900.276-5)
  22. 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.
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  42. Katherine Griffiths (3 April 2013). "Best 100 Companies". The Times. Archived from the original on 12 June 2011.
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  44. "Reasons for Selection, 2009 Canada's Top 100 Employers Competition".
  45. Jones, Adam (25 January 2012). "China headcount to overtake UK at top firms". Financial Times. Archived from the original on 24 April 2012.
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  47. Taub, Stephen (12 October 2004). "KPMG Pays $115 Million to Settle Suit". CFO. Retrieved 5 September 2014.
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  69. Newquist, Caleb (18 February 2010). "Alexandre Bilodeau Is KPMG Canada's Phil Mickelson". The Going Concern. Retrieved 8 September 2014.
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