PracticeAccounting FirmsSecond Big Five firm goes LLP

Second Big Five firm goes LLP

A second Big Five firm looks set to become a limited liability partnership in the spring, following a similar move by Ernst & Young last year.

KPMG, which has already protected part of its business by incorporating its audit practice, said it could switch to LLP status as early as March this year.

Speaking before publication of the firm’s annual report next week, senior partner Mike Rake told Accountancy Age he wanted to move ‘as soon as possible’.

The LLP will sit on top of the existing audit company, which was set up in 1996 as an immediate solution to worries over partners’ liabilities.

‘The move will be relatively easy for us, as we have already gone through the process of releasing financial information,’ said Rake.

But the switch to an LLP could be complicated by the future of the firm’s consulting practice, which Rake anticipates will be sold to KPMG Consulting in the US within six months. However, KPMG’s finance partner Adele Andersen said there would be no problem for the consulting arm to go into the LLP and be hived off at a later date.

Other firms are known to be considering a similar move – a spokesman for PricewaterhouseCoopers said the firm was minded to take on LLP status but had yet to make a final decision.

The firm’s annual report will also reveal Rake’s remuneration package.

Last year, he was paid £1,700,000, an increase of 3% on his previous year’s package.

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