KPMG stands for “Klynveld Peat Marwick Goerdeler”. The initialism was chosen when KMG (Klynveld Main Goerdeler) merged with Peat Marwick in 1987.
KPMG has reported a leap in profits that will result in the average pay of its 635 partners soaring from £519000 to more than £600000 each.
Only months after KPMG was accused by MPs of being part of a “cosy club” and “complicit” in the run-up to the collapse of the construction and government outsourcing company, the accountancy group reported an 8% rise in revenue to £2.3bn in the 12 months to 30 September.
Bumper profits helped to boost the pay packets of KPMG’s most senior executives, with the average pay-out per partner rising to £601,000. The chairman, Bill Michael, who was appointed last year, received £2.1m.
KPMG was one of the firms singled out in a damning report on the demise of Carillion, which collapsed under a mountain of debt in January.
KPMG was also fined £3m in August by the Financial Reporting Council after the firm admitted to misconduct in its audits of the fashion chain Ted Baker in 2013 and 2014. That penalty followed a £4.5m fine by the FRC in June, for its audit of Quindell in 2013.
The boost to profits comes at a difficult time for the big four accountancy firms – KPMG, EY, Deloitte and PwC – which have attracted criticism from politicians and regulators over the quality of their audit work and face calls to be broken up.
Professional firms such as KPMG have also been criticised for conflicts of interest, given the wide array of work done for big clients such as Carillion.
It has been claimed that firms are less willing to challenge auditing clients in the hope of winning lucrative contracts for consultancy and advisory work.