By Louis Goss
The global head of KPMG today slapped down suggestions it might follow EY in pursuing a global split, in claiming the accounting firm’s strong financial performance “validates” its current approach.
KPMG chief executive Bill Thomas rejected plans for a split in claiming the Big Four firm’s results “validates an unwavering commitment to deliver services… through a multidisciplinary approach”.
The comments come as KPMG’s global revenues grew 14 per cent to $35bn (£28bn) on the back a 19 per cent uptick in sales from its global advisory business to $34.64bn.
KPMG’s revenues were bolstered by its consulting arm amid booming demand for its deals and transaction services and continued demand for tech consulting on the back of the ongoing deployment of cloud computing.
By contrast, revenues from KPMG’s less profitable audit segment grew at a slower rate of 8 per cent to $11.85bn, as revenues from the firm’s tax & legal services segment expanded by 10 per cent to $7.35bn.
Thomas however argued KPMG’s “multi-disciplinary approach” offers the firm “the stability and resilience to invest, even in hard times” as he claimed the firm’s broad offering helps KPMG “provide solutions to clients’ difficult challenges.”
The comments come as EY pushes forwards with plans to separate its audit segment from its consulting arm, in a bid to free itself from the conflicts-of-interest rules that block it from selling advice to audit clients.
If completed, EY’s global split is set to come as the largest shakeup of the Big Four in decades, following the collapse of Arther Andersen in 2002.
KPMG’s Americas business posted the fastest growth of any region in seeing its revenues grow 16 per cent to $13.71bn, as the firm’s Asia Pacific business grew 13 per cent to $6.31bn.
The accounting firm’s Europe, Middle East and Africa (EMA) business however continued to provide the bulk of KPMG’s revenues in growing 11 per cent to $34.64bn.
The growth comes as KPMG has faced significant scrutiny from regulators over the part it has played in a series of high-profile scandals.
In July, the firm was fined a record £14m by the UK’s Financial Reporting Council (FRC) for misleading officials inspecting its audits of Regenersis and Carillion.
The Big Four firm is also facing a £1.3bn lawsuit over its audit of Carillion, over claims it failed to spot the collapsed construction giant’s misstatements.
Most recently, the firm was fined $7.7m by the USA’s accounting watchdog, over a series of offences including its failure to to properly deal with widespread exam cheating scandals.
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