Summary

KPMG was the second largest firm in the country until Andersen collapsed as a result of the melt down caused by its involvement in the Enron crisis. Deloitte promptly took on the Andersen staff and clients and much of its revenues, pushing KPMG into third among the Big Four firms. Dramatic enough, you may think, but even more so when you consider KPMG had been in talks to take on Andersen but backed away after getting the jitters over the potential legal risk involved.

The decision to back out was made by Mike Rake, the then UK senior partner, who some four years later, when leaving his post as chairman of KPMG International, confessed that failing to take on Andersen was his single biggest failure while leading the firm.

With that merger KPMG would have been in contention to overhaul PricewaterhouseCoopers as the largest UK accountancy practice. As it is however, the firm managed to deliver impressive growth. Results for the year ending June 2006, show revenues at a little more than £1.4bn following a 14% year on year rise. The firm has 556 partners with around 7,900 professional staff.

It has not been untouched by controversy itself. In 2005 the firm’s US arm agreed to pay a £250m fine after being pursued by the government for the sale of fraudulent tax shelters. Papers released in 2007 show that senior figures in the firm had argued that if it faced indictment on the charges it could have killed the firm throwing tens of thousands out of work and creating a crisis in audit.