kpmg accounting firm

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kpmg accounting firm

Category: Research Proposal

Subcategory: Accounting

Level: College

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KPMG accounting firm
Introduction
KPMG is a professional organization, dealing in auditing alongside PwC, Deloitte and EY. The company is headquartered in Amsterdam, in the Netherlands, and currently employees 162 workers. Their lines of services include advisory and tax and auditing. The company’s advisory and tax segment are divided into other four service operation groups. The company’s name was desirable from the merger between Peat Marwick and Klynveld Main Goerdeler. All national KPMG’s operate as independent legal entities, and are members of the KPMG International Cooperative, which is a Swiss entity. KPMG International made changes to their legal structure from the commonly known Swiss Verein to form a cooperative which was in accordance with the Swiss laws in the year 2003. Under their new structure, the cooperative has a mandate of offering support duties which are similarly provided by other networks. The firms independently serve their clients to ensure limited liability for other independent members.
History
KPMG’s history goes back to the year 1870, after William Barclay Peat started operations in London as an accountant and named it William Barclay Peat & Co in the year 1891. In the year 1877, Thomson McLontok started an accountancy firm in Glasgow while Piet Klijveld started his accountancy firm in Amsterdam, which was later merged with Kraayenhof which led to the formation of Klynveld Kraayenhof & Co. in the year 1925, William Peat & Co. together with Marwick Mitchell & Co., which was founded by Markwick James and Mitchell Roger in New York merged their operations which led to Peat Marwick Mitchell & Company, which was later known as Peat Marwick (Daly 550).
In the year 1979, Klynveld Kraayenhof & Co, which was in Netherlands together with McLintock Main Lafrentz from the US and the UK joined Deutsche Treuhandgesellschaft from Germany to form KMG, which was an independent professional company. The company wanted to operate as a strong European Internal firm that would provide advisory, tax and audit taxes in the region. In the year 1987, the newly formed KMG together with Peat Marwick became one after a merger, and this was one the biggest mergers to have occurred between great accounting firms leading to KPMG, which was to operate in the US and many other parts of the world together with Peat Marwick McLintock in the United Kingdom (Weber 950).
In 1990, the merged firms came to a common consensus which brought about KPMG Peat Marwick McLintock, which was later changed to KPMG Peat Marwick in the year 1991. The firm decided to use the name KPMG in the year 1999, and this name was seen as a shorter version of the earlier names that had been used by the corporation. A new merger between Ernst & Young and KPMG was imminent in the year 1997, but this was not possible after PricewaterhouseCoopers was given the regulatory approval to operate as an auditing firm.
Recently, KPMG has its building in Kamloops, and in the year 2001 the company diversified their US consulting after a public offer of KPMG Consulting Inc, which is currently referred to as BearingPoint, Inc. in the early years of 2009, BearingPoint did file for bankruptcy protection through Chapter 11 policy. In the year, 2003 deemed it necessary to divest its legal arm, which made KPMG LLP to sell its Dispute Advisory Services to GFTI Consulting. Member firms of KPMG from the UK, Switzerland, Germany and Liechtenstein came together, and this brought about KPMG Europe LLP, in the year 2007. The firms were later followed by other KPMG members from Belgium, Spain, Luxembourg, Netherlands, CIS, Saudi Arabia, Norway and Turkey. The company came up with their two chairmen by the name of Nonnenmacher Ralf and Griffith-Jones John; with a new headquarter in Frankfurt, German.
In Australia, the KPMG regional company’s chairman took over the Global Chairmanship in the year 2011, and went to Hong Kong where he was supposed to operate the corporation’s affairs. This was the first time KPMG decided to put their global leader in the Asian Pacific region. In the year 2014, KPMG announced that their chairman was going for retirement due to illness, and the position was to be taken over by Veihmeyer John, who was to continue operating as the CEO and Chairman of KPMG’s US region. The new chairman is however based in New York.
Competitors
KPMG LLP belongs to the US firm of KPMG International, which has experience and activities that date back to a 300 years history. Currently, KPMG faces competition from other companies which provide similar auditing and consultancy operations around the globe. The company competes with Deloitte Touche Tohmatsu, PricewaterhouseCoopers and Ernst & Young. The company US segment offers advisory services, Tax services and auditing to their clients.
The company has 80 offices which are scattered around the globe, and often serves customers from different sectors including natural resources, health, industrial, forest products practice, government and other public corporations and departments, energy and life sciences among many others. KPMG LLP is among the KPMG’s US division, which often accounts for a third of the group’s earnings by revenue.
Due to competition, KPMG, which has more than 27,000 workers in their 100 offices in the US has been named among the Big 4, which are companies providing similar services. It is the fourth largest company among its competitors in terms of revenue, and it is independent in their operations. In addition to being named as one of the top companies in terms of revenue, KPMG LLP was introduced to the training magazine’s hall of fame in the year 2011 (Walsh 1).
The company’s competitors which include Deloitte, Ernst & Young and PricewaterhouseCoopers together with other small operators in the industry have been known to provide auditing service in accordance to FTSE 100 by the Office of Fair Trading (Potter 4).
Weaknesses
KPMG has a big stigma in other regions which have small corporations operating. The company’s Big Company Stigma may make them to lose on important clients who see the company as one those only benefits and operates with other big organizations. Such a presence is dangerous as it makes them lose small businesses which are usually important when looking for referrals. The company also has a Reputation Stigma as other clients may fear to give them work because of their national coverage and nature of the operation. KPMG has a reputation of providing high-class services to their customers, and this may make other small clients to see their fees as being high (Thornbury 1).
Strengths
The company’s strength lie in the fact that it is one of the Big 4, and this gives it the capability of earning respect and increased number of clients from around the globe. Their high-level capabilities in accountancy, has made them to become well renowned across the globe and this has made them to capture big businesses which have led to increased revenues for them.
The company is in every region in most parts of the world, and this has made their global reach possible. Their services are in almost every part of the world and they enjoy such provisions due to their expanded nature of the business. Their expertise base is widely known around the globe with more than 162,000 professionals who work towards achieving their intended goals and objectives. They also have a market share that is excellent which stands at 70% of the total firms in the Fortune 500, and almost 18 of all the 50 great banks in the globe make use of their services. This has made them to become renowned around the globe (Casabona 7).
Conclusion
The company’s duties of auditing financial statements in their regions of operation, allow for proper assurance over data that is commonly used by capital markets and their investors. The company has a great responsibility to their clients as they are supposed to provide on time auditing services that allow their clients to make different decisions that pertain to their operations. The company takes their auditing tasks very seriously, and this has made them to employ experienced workers and top notch students who clearly show exemplary work from their institutions of higher learning. They apply D&A routines which are powerful for purposes of creating audit evidences that provide greater insights to their clients. The company has endeavored to be one of the best around the globe, and fully follows after the provisions of Deloitte, Ernst & Young and PricewaterhouseCoopers. The company endeavors to provide better and innovating services to all their clients and the society at large.
References
Casabona, Patrick A. “The Impact of the Accounting Profession’s Movement Toward Fair Value Reporting in Financial Statements: An Interview with Theresa Ahlstrom, Long Island Office Managing Partner, KPMG LLP.” Review of Business 28.1 (2007): 6-9. Print.
Daly, Bonita a., and Drue K. Schuler. “Redefining a certified public accounting firm.” Accounting, Organizations and Society 23.5 (1998): 549-567. Print.
Potter, Ben. “KPMG Marketplace an accounting airtasker.” The Australian Financial Review 2015: 4. Print.
Thornbury, Jan. “KPMG: Revitalising Culture through Values.” Business Strategy Review 10.4 (1999): 1.
Walsh, Katie. “KPMG expands the legal horizon.” The Australian Financial Review 2015: 1. Print.
Weber, Joseph, Michael Willenborg, and Jieying Zhang. “Does auditor reputation matter? The case of KPMG Germany and ComROAD AG.” Journal of Accounting Research 46.4 (2008): 941-972. Print.