KPMG to merge UK, Germany ops
Accounting firm KPMG is due to unveil plans on Friday to merge its UK and German businesses in a landmark move to make its services more consistent and risk-free, the Financial Times reported.
The merger of the two arms, which are currently separate legal entities, “represents the most significant structural change in the accountancy profession since Enron’s collapse precipitated the downfall of Anderson,” the newspaper said. It was referring to the 2001 meltdown of the US energy trading company. Arthur Anderson had been Enron’s auditor.
John Griffith-Jones, chairman of KPMG’s UK member firm, said the merger would facilitate a smoother, international service. “That’s the great cry of the clients,” he was quoted as saying. “We do a pretty good job in the circumstances, but it takes a lot of frigging around behind the scenes to (achieve) what appears reasonably seamless on the surface.”
The move will also give KPMG staff in one country more influence over the work of their colleagues elsewhere. “Even though we have national sovereignty, we are pretty much tied together in the boat,” Griffith-Jones said. “This (merger) gives us tighter control over that ever-present risk.”
At present, the top four accountancy companies — Price Waterhouse Coopers, Deloitte, Ernst & Young and KPMG — are networks of national partnerships because the law in most countries bars them from being foreign-owned, the FT said.
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