Rake says others could follow Andersen
Mike Rake, the chairman of KPMG, says it is possible that another big firm could go the way of Andersen, and collapse.
He admitted this in an interview with the Sunday Times during which he said most firms faced ‘legal action of various kinds from clients over supposed accounting or consulting errors’ and was the reason why most firms are lobbying for limited liability.
Rake also admitted that it was painful for KPMG to publish its results, but that it was important to ‘practice what you preach’.
The decision to publish full result was taken in the interests of ‘transparency, accountability and openness’, Rake said. ‘We have a major position of trust in the community and we ought to be accountable for our results’.
Rake also trumped up the fact that KPMG was the first of the Big Four to sell off its consulting arm and said these decisions plus the decisions to introduce a board, an audit committee and a remuneration committee had improved governance and was ‘of real benefit to the firm’.