KPMG shrugs off tax shelter blues

KPMG UK shrugged off the reputational damage caused by its US arm’s
embroilment in a tax shelter row when it unveiled a 20% revenue increase, making
it this year’s fastest-growing Big Four firm, writes Nicholas Neveling.

The strong results came after a difficult few months for the firm, which has
endured fallout from the censure of KPMG US. Fee income in the UK rose from
£1.07bn last year to £1.28bn. Advisory showed the most impressive improvement,
soaring 24% to £606.7m, while audit climbed 16% to £356.7m. KPMG’s tax practice
tax showed a 15% increase to £316.5m.

In an interview with Accountancy Age, UK senior partner and global
chairman, Mike Rake, said the firm’s healthy growth showed it had coped
comfortably with events across the Atlantic. ‘We were highly embarrassed by what
happened in the US and have been punished, but these results illustrate how
strong the KPMG brand is and reflect that the shelters were a small part of the
business,’ he said. Rake said growth in audit and advisory had followed trends
across the industry: ‘Audit and finance has become more important for companies,
especially this year with IFRS and Sarbanes-Oxley section 404. Growth in these
areas will not be of the same degree next year, but we are still anticipating
some increase.’

The rise in fees places KPMG hot on the heels of the UK’s second-largest firm
Deloitte, which saw revenues grow by 8.8% to £1.35bn this year. PwC still tops
the league of the Big Four firms with fee income of £1.78bn. Ernst & Young,
which reported growth of 15%, remains fourth with a turnover of £945m. Other
results including profits and Rake’s pay will be disclosed in January’s annual

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