Unlock free Digest editor
Roula Khalaf, editor of FT, chooses her favorite story in this weekly newsletter.
KPMG bosses require dozens of mergers among national partnerships that make up a global accounting company in a move that they hope to increase growth and prevent scandals with audit, according to people who are familiar with the issue.
The effort to integrate the companies more closely, which are separately owned by partners in every country, in the years is one of the largest overhaul of a large network and comes at a time of slow growth and uncertainty for industry.
KPMG It aims to reduce the number of “economic units” that make up an international network to just 32 to next year, more than 100 two years ago, according to the executives of the presentation made by analysts last month described in the Financial Times.
The goal is to accelerate the “group” strategy that the company has been implementing since 2023, which has already led to a combination of several members of the Middle East and similar initiatives in Africa.
In further consolidation, the KPMG partnership in the UK voted last year connect with KPMG business in Switzerland.
Unlike multinational corporations, the Big Four accounting companies were historically composed of a network of local ownership partnership, reflecting regulations on local audit and protection of partners in one country of responsibility for scandals elsewhere.
But the model became increasingly tense because counseling, which requires significant investment in technology, becomes an important part of the business.
According to people who are familiar with this issue, the company is worried that less countries can fight to hold these investments while financing the compliance procedures needed to protect the quality of audit and prevent scandal with reputation.
KPMG had a global revenue of $ 38.4 billion in the last financial year. With 5.4 percent, removing currency fluctuations, this was Fastest growth Among the big four, but it was a slowdown compared to the previous year.
The odds of the 2025 industry darkened with economic and geopolitical uncertainty that affects clients.
Bill Thomas, CEO of KPMG International, got one year extension to his expression of leadership he saw through the investment and integration strategy that moves until September 2026.
The executives set up a $ 300 million revenue threshold below which a membership company could be too small to remain a full member of the KPMG network in the long run, one of the people said.
KPMG also insists that the profit for partners are at least partially divided throughout the countries involved, with the aim of switching to a complete division of profit with time, said the person.
Previous attempts to connect within the KPMG have proven to be fulfilled. In 2007, companies in the UK, Germany, Swissa and Lihtenstein were combined in the formation of KPMG Europe, but this move was revealed after failing to achieve the intended efficiency.
Other four companies faced similar challenges by adjusting their structure to meet the need for investment in technology and more efficient service for international clients.
The EY plan to connect its national consulting operations and floats them on the stock market crashed in 2023 in the middle of bitter conflicts.
Deloitte successfully combined clusters of member companies, including in Northwestern Europe in 2016 and Asian-Pacific in 2018.
KPMG announced that they would retain legal entities at the country level to comply with local audit regulations, but that the reduction of the number of economic units would make it easier to invest in its growth strategy.
“The less business units you have, the easier it is to operate globally,” said Gary Wingrova, the CPMG International operating director.
“We want better proportions in our companies to members. Deals with factors relating to resistance and quality [which] It protects the fabric of the organization, and larger units can invest more to provide the right services to clients around the world, “he said.
“It also gives our people a better chance of career, because it is easier to move inside the unit than between them.”
