KPMG lives to fight another day
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.