KPMG
KPMG is a multinational professional services network headquartered in London, England, and it is one of the Big Four accounting firms, alongside Deloitte, EY and PwC. As of December 2024, KPMG operates as a network of 46 firms across 145 countries, employing 275,288 people affiliated with KPMG International Limited. For Canadian businesses and public institutions, KPMG provides essential audit, tax, and advisory services through its Canadian member firm, KPMG LLP. The firm's history, marked by major mergers like the 1987 union of KMG and Peat Marwick, and its complex global structure have shaped its presence, while recent years have involved regulatory challenges and a strategic focus on technology and restructuring.
History and Formation
The KPMG name originates from the 1987 mega-merger between two large accounting networks, KMG (Klynveld Main Goerdeler) and Peat Marwick. This union created one of the first truly global professional services firms, known as KPMG in most of the world and initially as Peat Marwick McLintock in the United Kingdom. The name KPMG stands for Klynveld Peat Marwick Goerdeler, reflecting its merged heritage. Prior to the 1987 merger, KMG itself was formed in 1979 as a grouping of European practices from the Netherlands, the United Kingdom, the United States, and Germany.
Following the merger, the firm was renamed KPMG Peat Marwick in 1991 before simplifying to KPMG in 1999. A proposed merger with Ernst & Young was announced in 1997 but was later abandoned. The firm also divested its legal arm, Klegal, in 2003. A major structural change occurred in 2007 with the formation of KPMG Europe LLP, which initially combined the member firms from the United Kingdom, Germany, Switzerland, and Liechtenstein, later expanding to include 15 other countries.
Recent history has been characterized by leadership changes, strategic investments, and restructuring. In 2021, KPMG UK revised its partnership structure, introducing capital contributions for partners partly to prepare for potential large fines. The firm has also pursued growth through acquisitions, such as a 50 percent stake in the UK venture capital advisor Acceleris in 2022. A significant merger between its UK and Swiss firms was approved by partners in May 2024, combining practices that generate approximately $4.4 billion annually. Technologically, KPMG announced a $100 million investment over four years in November 2024 to boost its enterprise artificial intelligence services through a partnership with Google Cloud.
Global Structure and Operations
KPMG operates as a network of independent member firms, each a separate legal entity, which are affiliated with KPMG International Limited, a private English company limited by guarantee incorporated in London in 2020. This structure is designed to limit liability and is common among major professional services networks. KPMG International provides support services to the member firms, which in turn deliver audit, tax, and advisory services directly to clients. The global network comprised 46 member firms across 145 countries as of December 2024, with a total workforce of 275,288 people. The global chairman until September 2026 was Bill Thomas, the former senior partner and CEO of KPMG Canada, who was succeeded by Gary Wingrove.
Member firms adapt to local regulations, which can lead to unique operational structures. In the Netherlands, for example, there are two member firms: KPMG Audit for accounting and Meijburg & Co for tax consulting. In India, where foreign auditing firms cannot operate directly, KPMG functions through BSR & Co, an auditing firm it purchased after the country's economic liberalization in 1992. In response to geopolitical events, KPMG announced in March 2022 that its Russian and Belarusian firms would leave the network following the Russian invasion of Ukraine. The firm's three primary service lines generated global revenues of $38.4 billion in 2024.
- Audit: Generated $13.4 billion in revenue (2024).
- Advisory: Generated $16.3 billion in revenue (2024).
- Tax and Legal Services: Generated $8.7 billion in revenue (2024).
KPMG's three main divisions are financial audit, tax, and consulting. Its tax and advisory services are further divided into various service groups. Tax arrangements relating to tax avoidance and multinational corporations and Luxembourg which were negotiated by KPMG became public in 2014 in the so-called Luxembourg Leaks. KPMG International changed its legal structure from a Swiss Verein to a co-operative under Swiss law in 2003 and to a limited company in 2020. This structure in which the Limited company provides support services only to the member firms is similar to other professional services networks. Each national KPMG firm is an independent legal entity and is a member of KPMG International Limited, a UK Limited Company incorporated in London, United Kingdom.
Major Legal and Regulatory Challenges
KPMG has faced significant legal and regulatory scrutiny across multiple jurisdictions, impacting its reputation and finances. To avoid indictment, KPMG LLP paid $456 million in penalties under a deferred prosecution agreement, and the criminal conspiracy charges were eventually dropped in January 2007. In another notable case, KPMG brokered a deal for Microsoft with Puerto Rico in 2012, resulting in a near-zero percent tax rate for the company through a complex profit-shifting scheme later scrutinized by the IRS. The firm's audit work has been repeatedly investigated, particularly in the United Kingdom. Its audit of the failed construction giant Carillion led to one of the most severe regulatory actions in UK audit history. A Financial Reporting Council (FRC) tribunal in 2022 fined KPMG UK £14.4 million and issued a severe reprimand for misconduct, including providing false and misleading information to the regulator. Several former KPMG executives received fines and lengthy bans, with the lead partner, Peter Meehan, fined £250,000 and banned for ten years. A separate FRC investigation concluded in October 2023 with a further £21 million fine, citing a failure to follow fundamental audit concepts and an unusually large number of breaches in the Carillion audits.
Concurrently, the UK's Official Receiver, acting as Carillion's liquidator, pursued a massive negligence claim against KPMG, initially seeking up to £1.3 billion. The claim alleged KPMG missed red flags and failed to properly audit significant construction contracts. KPMG robustly defended the case, asserting that responsibility lay solely with Carillion's board and management. The lawsuit was settled in February 2023, though the terms were not disclosed. In South Africa, KPMG became embroiled in a state capture scandal in 2017 related to its work for the Gupta family. An internal investigation found the work fell short of standards, leading to the resignation of the South African firm's entire senior leadership, including its CEO and chairman, and the withdrawal of a controversial report on the national tax authority.
Recent Strategic Moves and Restructuring
In recent years, KPMG has undertaken significant strategic initiatives focused on technology, geographic consolidation, and internal restructuring. A major technological push was announced in November 2024, with a $100 million investment over four years to enhance enterprise artificial intelligence services via a partnership with Alphabet's Google Cloud. This initiative aims to leverage Google products in the workplace, develop AI agents, and upskill the workforce. The firm has also adjusted its physical footprint, announcing plans in August 2022 to downsize its New York City office space and relocate to Two Manhattan West in Hudson Yards in 2025.
Geographic consolidation has been a key theme, exemplified by the merger of KPMG's UK and Swiss firms, approved by partners in May 2024. The combined entity works across audit, legal, tax, and advisory, generating about $4.4 billion in annual revenue. Internally, KPMG UK revised its partnership structure in November 2021, introducing five tiers with capital contributions ranging from £150,000 to £500,000. This move was partly intended to strengthen the firm's balance sheet in anticipation of potential large fines. In a significant shift for its US operations, KPMG removed diversity, equity, and inclusion (DEI) reports from its website in February 2025 as part of an effort to abandon formal DEI targets.
The firm has also made workforce adjustments in response to business needs. In April 2026, KPMG announced it was cutting roughly 10 percent of its US audit partners, approximately 100 individuals, following a voluntary early retirement program that fell short of targets. The firm stated the layoffs were intended to align the size of its partner ranks with the scale of its growing audit business, not to address individual performance. At the time, the US audit practice included about 1,400 partners and managing directors, with the latter group excluded from the cuts. These strategic moves reflect the firm's ongoing efforts to adapt its operations and cost structure in a changing market.
Leadership and Governance
Leadership at KPMG operates at both global and national member firm levels. The global entity, KPMG International Limited, is led by a global chairman. Bill Thomas, the former senior partner and CEO of KPMG Canada, served in this role until September 2026, when he was succeeded by Gary Wingrove. National firms are led by their own senior partners and CEOs, who manage operations within their respective jurisdictions. This decentralized structure allows member firms to respond to local market conditions while adhering to the global network's standards and brand. Leadership transitions have sometimes been abrupt, particularly following controversies.
In the United Kingdom, chairman Bill Michael resigned in February 2021 after criticism of remarks made during an internal meeting. Bina Mehta was appointed acting chair, while Mary O'Connor became acting senior partner and chief executive, marking the first woman to lead the UK firm. O'Connor left the firm two months later after being passed over for the permanent role, which went to Jon Holt. In South Africa, the entire senior leadership team, including CEO Trevor Hoole and chairman Ahmed Jaffer, resigned in September 2017 following the Gupta scandal. The firm's governance has been tested by these events, leading to increased scrutiny of partner conduct and audit quality from regulators worldwide.
Financial Performance and Service Lines
KPMG's financial performance is driven by its three core service lines: Audit, Advisory, and Tax and Legal Services. In 2024, the global network reported total revenues of $38.4 billion. The Advisory practice is the largest revenue generator, contributing $16.3 billion, followed by Audit at $13.4 billion, and Tax and Legal Services at $8.7 billion. This revenue distribution highlights the firm's evolution from a traditional audit-focused practice to a diversified professional services provider with strong consulting and tax advisory arms. The financial results are aggregated from the independent member firms around the world.
| Service Line | 2024 Revenue (US$ billions) |
|---|---|
| Audit | 13.4 |
| Advisory | 16.3 |
| Tax and Legal Services | 8.7 |
| Total | 38.4 |
The audit service involves examining financial statements to provide an opinion on their fairness and adherence to accounting standards. The advisory division offers management consulting, risk consulting, and deal advisory services. Tax and Legal Services encompasses corporate tax planning, compliance, legal advice in permitted jurisdictions, and transfer pricing. Revenue growth is influenced by global economic conditions, regulatory changes affecting demand for services, and the firm's ability to manage legal and reputational challenges. The significant fines related to audit failures, such as the £21 million penalty in the UK in 2023, also impact the firm's profitability and financial planning.
Questions about KPMG
What does KPMG stand for?
KPMG stands for Klynveld Peat Marwick Goerdeler. The name originates from the 1987 merger between two accounting networks: KMG (Klynveld Main Goerdeler) and Peat Marwick. The initials represent key figures from the merging firms' histories, including Piet Klijnveld, William Barclay Peat, James Marwick, and Reinhard Goerdeler. The firm was initially known as KPMG Peat Marwick before shortening to KPMG in 1999.
Is KPMG Canadian?
KPMG is a global network with a significant presence in Canada through its member firm, KPMG LLP. While the global headquarters is in London, England, the Canadian firm operates independently as part of the worldwide KPMG network. KPMG Canada is a major employer and advisor within the country's professional services sector. The global chairman until September 2026 was Bill Thomas, who was previously the senior partner and CEO of KPMG Canada.
What are the Big Four accounting firms?
The Big Four accounting firms are the four largest global professional services networks, providing audit, tax, consulting, and advisory services. They are Deloitte, PricewaterhouseCoopers (PwC), Ernst & Young (EY), and KPMG. These firms dominate the market for auditing large public and private companies worldwide. KPMG is consistently ranked among these four in terms of global revenue and workforce size.
What was the Carillion scandal involving KPMG?
The Carillion scandal involved KPMG's audit of the UK construction firm Carillion, which collapsed in 2018. Regulators found KPMG's audits seriously deficient, leading to multiple fines totalling tens of millions of pounds. A tribunal found KPMG UK staff had created false meeting minutes and edited documents misleadingly. The firm also faced a £1.3 billion negligence lawsuit from Carillion's liquidator, which was settled confidentially in 2023.
What services does KPMG provide?
KPMG provides three main lines of service: financial audit, tax and legal advice, and advisory (consulting). The audit service involves independent examination of financial statements. Tax services include planning and compliance for corporations and individuals. The advisory division offers management consulting, risk consulting, deal advisory, and strategy services. In 2024, these services generated global revenues of $38.4 billion.
How is KPMG structured globally?
KPMG is structured as a network of independent member firms in 145 countries, all affiliated with KPMG International Limited, a private English company limited by guarantee headquartered in London. Each national KPMG firm is an independent legal entity and is a member of this global organization, a structure designed to limit liability. KPMG International Limited provides support services to the member firms, which in turn provide services directly to clients. As of December 2024, the network consisted of 46 firms employing 275,288 people. The global structure changed from a Swiss Verein to a Swiss co-operative in 2003 and was incorporated as a UK limited company in 2020.
Sources and further reading
- KPMG (Wikipedia)
- KPMG Canada: Canadian audit, tax and advisory services (kpmg.com)
Checked by the Yadude Books desk. Last updated 2026-10-19.
