From the FT, late yesterday:
KPMG is in deep trouble in South Africa, and for good reason.
Its audit failings in the UK also leave it in deep trouble here.
The question has to be asked: can it survive? In a market where reputation is everything is KPMG losing too much ground too fast? It's already the smallest of the Big 4.
And if it either declines rapidly, or fails (and I think either possible if good partners and staff quit) where does that leave the audit market? Is 'too big to fail' enough to save the other three when there are just too few firms left for there to be credible alternative auditors, which would shoot independence and objectivity out of the window for good?
Major crises always come from unexpected angles. Audits' may have begun.
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Certainly after the Carrillion audit fiasco in missing a billion or so shortfall in income that KPMG failed to see certainly eliminates them as trusted and objective operators. They are obviously hand in glove with the tiny elite whose only interest is in making maximum profits whether or not the fundamentals of a companies business plan is sound.
KPMG has already started losing significant numbers of staff – the amount of KPMG CV’s in the market is incredible
anthony says:
“KPMG has already started losing significant numbers of staff — the amount of KPMG CV’s in the market is incredible”
And the others are hanging on waiting for a good pay off when it falls apart …?
I think the jumpers have the right idea.
Perhaps it’s the result of too much money sloshing around in certain quarters. The temptation must be too great for some.
Yet an ethical organisation like Ecology Building Society continues to use KPMG. They say they are forced to do so by Bank of England rules. Can this be so?
Yes
Basically only the big 4 can now audit financial institutions
“Basically only the big 4 can now audit financial institutions”
That can’t be right. The political ‘libertarian’ right is fiercely opposed to the ‘closed shop’ ? And competition is hard-wired into their very being.
You must be mistaken, Richard.
Only they can put the systems in place to do this
And it suits the whole system to make sure that is the case
The private sector loves monopoly profit for the few
So the Big 4 may soon be the Big 3, and it’s not hard to imagine a time when we have the Big 1. What power they will have.
PWDelEY you mean?
Rachel says:
“So the Big 4 may soon be the Big 3, and it’s not hard to imagine a time when we have the Big 1. What power they will have.”
I’m not sure they will have any power. No one will believe them. That’s the problem we already have with the Big4. They have sold their integrity and reputation.
KPMG (I consider them a quasi-criminal organisation) are heavily involved in work on STPs (Slash, Trash and Privatise, aka sustainability and transformation plans) in the NHS. In the Trust where I work they are involved in the formation of a WOC (Wholly Owned Company) a private company of between 2300 and 2400 staff which will be owned by the Trust and in my opinion will be used to avoid VAT and possibly capital asset charges. WOCs are the perfect way to create easy to privatise chunks of the NHS. KPMG should be ousted from work in UK public institutions as well.
Trog
You are right
And I know you know you are right
On what basis has this been decided? And who decided it? It smells a bit fishy!!
This will get interesting at HMRC: they are heavily dependent on the “revolving door” to fill a chronic staffing problem; and worse, senior staff retention will collapse if a successful career no longer provides an ‘Amakudari’ pathway into non-executive directorships and lucrative consultancy work.
In the long term, this might be all to the good; but a great deal of mischief can be done with this on the short term: and, I fear, the kind of permanent damage that profits a fortunate few and closes off all prospects of a long-term improvement for us all.