Top 50 retrospective - KPMG: 35 years in accountancy
No firm better highlights the hoops that the accountancy profession has jumped through in the last 35 years than KPMG.
As the swinging sixties came to an end, its senior partner Sir Ronald Leach had been at the helm of what was then the UK’s second biggest firm for three years.
By the early seventies, Sir Ronald, also the president of the ICAEW, found himself dealing with issues that would go on to dominate accountancy’s agenda to the present day.
Competition between the firms was increasing, globalisation was emerging as a real issue and Sir Ronald found himself chairing the institute’s first steering committee to develop accounting standards.
With a reputation as one of the key accountants and advisers of his time, according to the recently published KPMG history by former partner Roger White, the government asked Leach to serve as joint inspector into Robert Maxwell’s Pergamon Press. His report led to that haunting phrase: ‘Notwithstanding Mr Maxwell’s acknowledged abilities and energy, he is not in our opinion a person who can be relied upon to exercise proper stewardship of a publicly quoted company.’ How right he was.
By 1977, Sir Ronald had given way to Sir John Grenside. As head of what was now an 138-strong partnership, Sir John faced several key challenges.
Competition between the big firms was intensifying and, in the early eighties, advertising restrictions imposed on accountants were being lifted.
Internally, Peats (along with Coopers) was leading the way in widening its service offering beyond audit. Talks also began with Thomson McClintock about a transatlantic tie-up, heralding the merger mania that would grip the profession throughout the eighties and beyond.
The ‘robust’, according to an issue of Accountancy Age at the time, Jim Butler succeeded Greenside in 1986 and secured the merger at a time when Ernst & Whinney and Arthur Young were merging as were Deloitte Haskins & Sells and Touche Ross or, in the UK, Coopers & Lybrand.
By 1993 Lord Colin Sharman was senior partner. With the UK emerging from recession, Sharman focused on issues of partner liability by transferring the audit arm to a separately incorporated business. It was a huge change.
With KPMG Audit plc required to publish audited financial statements, Sharman decided to combine the results of the partnership and the plc in one publicly available statement.
By incuding partner remuneration bands and details of his own remuneration, it shook up the firm, and prepared the profession for the transparency issues of the 21st century.