Unlock the publisher’s digest free
Roula Khalaf, editor -in -chief of the FT, selects her favorite stories in this weekly newsletter.
KPMG’s bosses require dozens of mergers among the national partnerships that make up the global accounting firm in a decision they hope to stimulate growth and prevent audit scandals, according to people familiar with the problem.
The effort to more closely integrate companies, which belong separately to the partners of each country, have been one of the largest revisions of a Big Four network for years and is presented at a moment of slow growth and uncertainty for the industry.
Kpmg Aims to reduce the number of “economic units” that make up the international network up to 32 years by next year, from more than 100 years ago, according to presentation leaders made to analysts last month who were described in financial times.
The objective represents an acceleration of a “clustering” strategy that the company has pursued since 2023, which has already led to the combination of several member companies in the Middle East, and a similar initiative in Africa.
In a new consolidation, the British partnership of KPMG voted last year merge With the KPMG company in Switzerland.
Unlike multinational companies, the four large accounting firms have always been made up of a network of local partnerships, reflecting local audit regulations and protecting partners in a country against the responsibility of scandals elsewhere.
But the model has become more and more tense as a advice, which requires substantial investments in technology, becomes a larger part of the company.
According to people familiar with the issue, the company fears that small countries can find it difficult to follow these investments while funding the necessary compliance procedures to protect the quality of the audit and prevent reputation scandals.
KPMG had global income of $ 38.4 billion in its last financial year. At 5.4%, eliminating currency fluctuations, it was fastest growth Among the large four, but represented a slowdown compared to the previous year.
The perspectives of the industry in 2025 were obscured by economic and geopolitical uncertainty affecting customers.
Bill Thomas, managing director of KPMG International, received a one year extension At its end of leadership to see through an investment and integration strategy which takes place until September 2026.
Managers have set an income threshold of $ 300 million below which a member company could be too small to remain a full -fledged member of the KPMG network, said one of the people.
KPMG also insists that, in all mergers, profits pools for partners are at least partially shared in the countries involved, in order to move on to a full benefit act, said the person.
The attempts at previous merger within KPMG proved to be loaded. In 2007, companies in the United Kingdom, German, Switzerland and Liechtenstein of the company merged to train KPMG Europe, but this decision was reversed after failing to deliver the referral.
Other Big Four companies have faced similar challenges to adapt their structure to meet the need for technological investment and more effective services for international customers.
One plan by EY to merge its national council operations and floating them on the stock market collapsed in 2023 in the midst of bitter struggles.
Deloitte successfully combined groups of member companies, especially in northwestern Europe in 2016 and Asia-Pacific in 2018.
KPMG said that it would retain legal entities at the country level to comply with local audit regulations, but that the reduction in the number of economic units would facilitate the investment necessary for its growth strategy.
“The less you are less commercial units, the easier it is to do business worldwide,” said Gary Wingrove, KPMG International.
“We want a better scale in our member companies. It deals with factors linked to resilience and quality [which] Protects the fabric of the organization, and larger units can invest more in order to provide good services to customers around the world, “he said.
“It also provides our people with better career prospects, because it is easier to move within a unit than between them.”
