KPMG lives to fight an­other day

The Daily Telegraph - Business - - Business Comment -

It would be un­for­tu­nate if, just as the au­dit mar­ket watch­dog and the gov­ern­ment de­bate whether the Big Four ac­coun­tants need to be­come five, the in­dus­try in­stead shrunk to three.

Yet, that is pre­cisely what the pro­fes­sion has been ask­ing as KPMG swung one from one ma­jor scandal to an­other: are the firm’s prob­lems life-threat­en­ing?

It has now come out fight­ing, post­ing what looks to be bumper re­sults for 2018. Rev­enues in­creased 8pc from £2.2bn to £2.3bn and un­der­ly­ing profit jumped 18pc to £356m – its strong­est per­for­mance for a decade, says boss Bill Michaels.

All this in a year that KPMG has been fight­ing fires around the world. It signed off the ac­counts of Car­il­lion months be­fore the out­sourcer im­ploded, and has been fight­ing crises in Amer­ica, South Africa, and more re­cently, the United Arab Emi­rates.

Th­ese lat­est re­sults will go some way to calm­ing spec­u­la­tion about KPMG’s fu­ture but it is not out of the woods yet.

The in­quiry into fail­ings at Car­il­lion is on­go­ing; the trial against three for­mer US part­ners kicks off next year; and its rep­u­ta­tion in South Africa where at least 20 clients have jumped ship, may never be re­stored.

Mean­while, the chances of a reg­u­la­tory clam­p­down still loom large. Best to keep the cham­pagne on ice for the time be­ing, but with part­ners pock­et­ing £600k each and Michaels earn­ing £2.1m, the fes­tiv­i­ties are un­der­stand­able.

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