What Does KPMG Stand For? Breakdown of the Acronym & History
Wondering what KPMG stands for? This article explores the origins, values, and vast array of services offered by KPMG, and understands its role in the world of auditing, tax advisory, and consultancy.
Posted November 7, 2024
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What Does KPMG Stand For?
KPMG stands for Klynveld Peat Marwick Goerdeler, the last names of the firm’s four founding members. KPMG was founded in 1987 as the result of a merger between Klynveld Main Goerdeler (KMG) and Peat Marwick International (PMI).
The "K" comes from Piet Klynveld, who founded a Dutch accounting firm in 1917. "P" represents William Barclay Peat, who started an accounting firm in London in 1870. "M" stands for James Marwick, co-founder of an accounting firm in New York in 1897. Lastly, "G" honors Reinhard Goerdeler, a key figure in the firm's formation and a prominent German accountant. KPMG is now one of the "Big Four" accounting firms, offering audit, tax, and advisory services globally.
Who Were Klynveld, Peat, Marwick, and Goerdeler?
Piet Klynveld (the "K" in KPMG) founded Klynveld Kraayenhof & Co. in Amsterdam in 1917. Klynveld was a Dutch accountant who quickly grew his firm to become the largest in the Netherlands by the time of his death in 1946. His firm was known for its forward-thinking approach to accounting during the early 20th century, and his influence expanded significantly when his company joined forces with others to form KMG in 1979.
William Barclay Peat (the "P" in KPMG) began his career in 1870 at age 17 and rose through the ranks to lead the firm Robert Fletcher & Co. in London. Under his leadership, the firm was renamed William Barclay Peat & Co. in 1891. He was a pioneering figure in the British accounting industry, and his firm’s merger with Marwick Mitchell & Co. laid the foundation for what would later become KPMG. Peat was also known for his role in promoting inclusivity in the accounting profession by advocating for the admission of women.
James Marwick (the "M" in KPMG), a Scottish immigrant to the U.S., co-founded Marwick, Mitchell & Co. in New York in 1897. Marwick had a significant impact on American accounting, establishing a strong presence for his firm during a time when accounting was still emerging as a recognized profession in the U.S. Despite early skepticism about the need for accountants, Marwick's firm became a key player in the New York business scene.
Reinhard Goerdeler (the "G" in KPMG) was a German accountant and an important figure in European post-war accounting. He joined Deutsche Treuhand-Gesellschaft (DTG) in 1953, later becoming a major force in the accounting profession across Europe. He played a critical role in forming Klynveld Main Goerdeler (KMG) in 1979, and he was also known for his leadership in professional services across Europe. Goerdeler’s influence helped facilitate the eventual merger that created KPMG in 1987.
What Does KPMG Actually Do?
KPMG is one of the largest global professional services firms, offering a wide range of services primarily across Audit, Tax, and Advisory. As part of the Big Four firms, KPMG works with organizations of all sizes – from multinational corporations to small businesses – providing essential financial and business consulting services. Here’s a breakdown of their primary service areas:
- Audit and Assurance – KPMG provides independent audit services to assess the accuracy and reliability of financial statements, ensuring compliance with accounting standards and regulations. Their audit services help businesses maintain transparency and build trust with stakeholders and investors.
- Tax Services – KPMG offers comprehensive tax planning and compliance services, helping organizations navigate complex tax regulations globally. Their services include corporate tax advice, international tax structuring, and guidance on mergers and acquisitions from a tax perspective.
- Advisory Services – KPMG’s advisory arm supports businesses with strategic decision-making across various areas, including risk management, operational improvements, and financial restructuring. This also includes services in digital transformation, cybersecurity, and management consulting.
Through these services, KPMG plays a vital role in helping companies manage risks, optimize their financial strategies, and meet regulatory requirements, positioning them as trusted advisors to many of the world’s leading organizations.
Read: How to Answer the "Why KPMG?" Interview Question
The History and Background of KPMG
KPMG International Limited, one of the four largest accounting firms globally, was established in 1987 through a merger between Klynveld Main Goerdeler (KMG) and Peat Marwick International (PMI). With this merger, KPMG joined the ranks of the "Big Four" accounting firms, alongside Ernst & Young (EY), Deloitte, and Price Waterhouse Coopers (PwC). KPMG now provides a wide range of services, including audit, tax, and management consulting, helping businesses across various industries like financial services, healthcare, energy, and government. Today, KPMG continues to be a leader in global advisory services, guiding organizations in risk management and driving innovation.
The Founding and Growth of KPMG
KPMG, now the 4th largest accounting firm, was created in 1987 through the merger of Klynveld Main Goerdeler (KMG) and Peat Marwick Goerdeler (PMI) as mentioned above. This strategic move was driven by a need to stay at the top in the face of fierce competition among accounting firms. The merger of these two entities laid the foundation for KPMG's rapid global growth, allowing it to become one of the world's largest accounting firms.
KMG, founded in the Netherlands in 1917, began by providing audit services to the Dutch manufacturing sector. However, it quickly grew, forming partnerships with other firms across Europe, Canada, and Australia. This expansion set the stage for KMG's future global presence, making it a key player in the global market before the merger.
Peat Marwick, founded in 1870 by William Barclay Peat and James Marwick in the United States, initially served industries like textiles, railroads, and mining. As the firm grew, it expanded into tax and financial advisory services, becoming a well-established presence in international markets. Prominent figures like Roger Mitchell played vital roles in the firm's success.
After the merger, Klynveld Peat Marwick Goerdeler (KPMG) continued its expansion with a holistic approach to providing services, including audit, tax services, and financial advisory. With over 200,000 KPMG employees in 147 countries, it remains a global powerhouse in the industry, as recognized by Accounting Today.
Global Presence of Klynveld Peat Marwick Goerdeler
With operations in 147 countries, KPMG offices are truly worldwide and the firm can be considered as one of the largest accounting organizations in the world. This vast global presence allows the firm to handle everything from financial statements and audit work to consulting and advisory services, placing it among the top global consulting firms.
The KPMG network and its ability to maintain consistency and quality across is rooted in its robust operating model. While KPMG International Limited provides global guidance and oversight, KPMG member firms operate independently, enabling them to adapt to regional regulations and client needs. Local offices benefit from KPMG's global resources, ensuring the highest standard of service in both audit work and consulting.
In terms of financial performance, KPMG generates significant annual revenue across its service lines. The firm’s gross revenue consistently places it among the top four companies in the accounting services industry, besides Ernst Young, Deloitte, and PricewaterhouseCoopers. KPMG’s commitment to delivering high-quality accounting services and consulting solutions has solidified its position as a global leader.
How is KPMG Different From Other Accounting Firms?
KPMG sets itself apart from other accounting firms through a combination of factors, including its global presence, commitment to innovation, and comprehensive range of services. Firstly, KPMG operates in over 150 countries, allowing it to provide seamless cross-border services and tap into diverse market knowledge. This global reach enables the firm to support multinational clients with complex needs effectively.
Secondly, KPMG places a strong emphasis on innovation, leveraging state-of-the-art technologies such as artificial intelligence and data analytics to enhance its auditing and advisory processes. For instance, KPMG has developed advanced data analysis tools like KPMG Clara, an AI-powered platform that revolutionizes the audit process by analyzing large volumes of data more efficiently.
Lastly, KPMG offers an extensive array of services beyond traditional auditing, such as cybersecurity consulting, risk management, and sustainability advisory. This diversified service portfolio allows KPMG to provide holistic solutions that address the evolving needs and challenges of its clients in an ever-changing business landscape.
The Impact of Technology on KPMG's Operations
The accounting industry, like many others, is undergoing major changes as a result of advances in technology. At KPMG, technology is seen as a key driver of innovation, efficiency, and value creation for clients.
KPMG has made significant investments in digital technologies over the past few years, including the development of its KPMG Clara platform (as mentioned), which uses artificial intelligence and automation to streamline audit processes and improve accuracy. The firm has also launched various other digital solutions to enhance its tax and advisory services, including KPMG Ignition Tax, KPMG Global Legal Operations Transformation Service (GLOTS), and even more tools that allow it to provide top-quality service to its clients.
However, technology is not just a means to improve internal processes and client service. It is also a source of disruption and opportunity for KPMG's clients, many of whom are grappling with the challenges of digital transformation in their own industries. KPMG's advisors and consultants are well-equipped to help clients navigate technology trends and adopt innovative solutions that drive growth and competitiveness.
Career Opportunities and Advancement at KPMG
Considering a career in accounting or professional services? KPMG offers a wide range of opportunities to suit all interests and goals. The firm has a robust recruitment and development program, which aims to attract and retain top talent from diverse backgrounds.
At KPMG, people can pursue a career in audit, tax, advisory, or a combination of these areas. The firm offers entry-level positions for recent graduates, as well as opportunities for experienced professionals to join at higher levels. KPMG also provides numerous paths for career advancement, including leadership development programs, mentorship, and training opportunities.
Sustainability is also a key focus for KPMG's talent strategy, and the firm is committed to promoting diversity, inclusion, and employee well-being.
To learn how to land a position at KPMG, check out these expert resources:
- How to Answer the "Why KPMG?" Interview Question
- How to Prepare for KPMG Management Consulting Networking Calls?
- How to Prepare for KPMG Management Consulting Behavioral Interviews?
- How to Prepare for KPMG Management Consulting Case Interviews?
- How to Network for Management Consulting
FAQs
What does the acronym KPMG stand for?
- KPMG stands for Klynveld Peat Marwick Goerdeler, the last names of the firm’s four founding members.
Who is the CEO of KPMG?
- William B. Thomas is the current CEO of KPMG, a position he began on October 1, 2017.
What is KPMG known for?
- The firm is a multinational and operates worldwide. Headquartered in London, England, KPMG is a network of firms in 145 countries with 273,424 employees. It has three lines of services: financial audit, tax services, and advisory. Its tax and advisory services are further divided into various service groups
Who are some of the biggest KPMG clients?
- Wells Fargo, Pfizer, PepsiCo, Citigroup, and Accenture are some of the biggest clients of KPMG. It has been serving as their independent auditor for the past few years.
Who are the Big 4 accounting firms?
- The Big 4 Accounting Firms include Deloitte, Ernst & Young (EY), PricewaterhouseCoopers (PwC), and Klynveld Peat Marwick Goerdeler (KPMG)
What are KPMG's core values?
- KPMG’s core values include:
- Integrity: We do what is right.
- Excellence: We never stop learning and improving.
- Courage: We think and act boldly.
- Together: We respect each other and draw strength from our differences.
- For Better: We do what matters.
Who is the number one firm in the Big 4?
- PwC and Deloitte are typically considered the most prestigious of Big 4 as they charge the most for their services and have the greatest breadth of clients.
Why choose KPMG?
- KPMG's commitment to personal and professional growth is unparalleled. With a dynamic learning system, KPMG Business School, and opportunities for internships abroad, the firm fosters an environment that promotes career advancement at every level.
What is KPMG looking for in a candidate?
- Diversity, commitment, and ambition. KPMG recruits across a range of degree disciplines, skills, abilities, and backgrounds. At KPMG, attitude is every bit as important as ability.
