KPMG revenues grow strongly to record $26.4 billion

KPMG International announced record aggregated network revenues of US$26.40 billion for the fiscal year ending 30 September 2017 (FY17), representing a 5% increase in local currency terms on FY16.

“The KPMG network grew strongly while continuing to transform to meet the rapidly changing demands of clients. We are making significant, strategic investments across Audit, Tax and Advisory in technology and innovative services where clients are facing their greatest challenges and disruption. As an example, KPMG firms have built leading positions in cyber security, data & analytics (D&A) and digital transformation services, bringing together leading edge technology with world-class business expertise to offer a higher level of capabilities to clients in these critical areas,” said Bill Thomas, Chairman, KPMG International.

“We remain committed to meeting our public interest responsibility and continuously improving the quality of the vital work performed for clients and capital markets. The Value of Audit and Responsible Tax forums held by KPMG around the world are powerful examples of KPMG bringing together key stakeholders to discuss our profession’s most complex challenges and opportunities.”

KPMG firms grew across all three geographic regions:

• Americas revenues increased by 4.4%, with Tax growing by 6.7%.
• Asia Pacific delivered strong growth with revenues increasing by 8.1%, with Advisory growing by 15.0%.
• Europe, Middle East and Africa (EMA, including India) revenues increased by 4.0%.

“KPMG is continuing with a multi-year global investment program and this year invested more than US$1 billion in new services, technology, alliances and acquisitions, focused particularly on D&A, strategy, cyber security, digital labor and audit. This represents our most exciting, data-driven investment in the network and is transforming our technology capability and our operating model,” said Bill Thomas. “Like KPMG’s clients around the world, we’re focused on harnessing the power of digital transformation to improve efficiency, innovation and quality.”

Audit

Total Audit revenues for the year were up by 3.1% to US$10.39 billion, building on last year’s exceptional growth of 4.5%.

KPMG firms continued to win a number of significant audit appointments, particularly in Europe, where the impact of the second full year of EU audit reforms continues to drive increased movement of audit engagements.

“We remain dedicated to continuously improving audit quality by making quality the focus of everything we do. We are doing this through innovation, investing in our smart audit platform – KPMG Clara – our methodology and most importantly our people. KPMG continues to invest in new audit technology and innovation through a several hundred million dollar, multi-year, investment program. KPMG Clara now offers an automated, agile, intelligent and scalable platform for KPMG Audit professionals, bringing powerful D&A and technology capabilities together in one interface and allowing clients real-time information arising from the audit process and communication with the audit team. Through our alliance with Microsoft we are working to move aspects of KPMG Clara onto Microsoft’s Azure cloud platform in certain markets, which will further enhance audit quality as well as improving efficiency,” said Bill O’Mara, KPMG International’s Global Head of Audit.

Tax

Tax revenues grew 5.9% over the previous year, to US$5.83 billion, driven by high demand for tax compliance services, as well as international and M&A related services, in all three regions.

“Once a highly-technical specialist capability, tax has risen on the corporate agenda. Meanwhile, the role of the tax function itself is evolving, particularly due to advancements in technology and data and analytics, highlighting new opportunities for tax departments to provide value to their organizations and beyond. Increasingly complex national and international requirements in key areas such as indirect tax, immigration, and supply chains have fueled demand for technology-enabled tax services and this is something KPMG is equipped to provide,” said Jane McCormick, KPMG International’s Global Head of Tax.

Advisory

Advisory revenues grew by 6.0% to US$10.18 billion, reflecting increased demand for expertise and deep industry knowledge to help clients better manage their risks, as well as plan and execute their strategy to drive growth. Investments in solutions drove strong double-digit revenue growth in Strategy services and emerging technologies such as Cyber. Particularly strong growth was seen in Asia Pacific, where Advisory revenues increased by 15%, with double-digit growth across the largest firms, including a 29% increase in China.

“The intersection between business consulting and technology is now very strong. Projects often start with a conversation with a client about a business challenge they are facing, then evolve to where new solutions with embedded technology can be developed drawing on our industry expertise, technology capability and alliances. We’ve focused on becoming more agile, and the speed at which we develop solutions and get them to market has increased dramatically over the past 2 years,” said Mark A Goodburn, KPMG International’s Global Head of Advisory.

In FY17, the KPMG network remained a leading choice for talent, with the global workforce growing by more than 4% to 197,263 people, the highest number of individuals ever employed across the network. More than 37,000 new graduates and other entry-level professionals joined KPMG, and in our 10 largest countries we promoted more than 450 people to partner in our most recent partner class, and in FY17 we admitted more than 250 experienced hire partners across our network.

Within our leadership ranks, gender diversity continues to rise across the network. In the 10 largest countries, 28% of KPMG’s latest class of partner promotions were women, and women now make up 47% of the KPMG network’s workforce.

KPMG is investing significant time and resource to equip its people with digital transformation skills. As an example, KPMG in the US broke ground on a US$400 million learning, development and innovation facility in Orlando, Florida, US in mid-2017. KPMG is also working with leading universities to help educate and provide opportunities to the next generation of accounting professionals, developing the KPMG Master of Accounting with Data and Analytics Program to prepare professionals for the rapid advance of technologies that are changing the landscape of the accounting profession.

“KPMG’s inclusive culture helps ensure that teams reflect the diversity of skills, backgrounds, experiences and thought expected by clients. We encourage our people to see the world through many different perspectives. We empower our people to be themselves and respect others – it’s core to our values and what we believe in,” said Susan Ferrier, KPMG International’s Global Head of People, Performance and Culture.

KPMG member firms around the world are putting those beliefs into practice through their support for and involvement across a broad spectrum of diversity organizations and communities including Women Corporate Directors, the largest global network of women Board members, and KPMG’s global citizenship priority of lifelong learning.

KPMG has been recognized as a leader in the drive toward inclusion in the workplace, including:

• 2017 DiversityInc Top 50 Companies for Diversity (US)
• 2017 Best-of-the-Best Corporation for Inclusion by the National Gay & Lesbian Chamber of Commerce (NGLCC) and the National Business Inclusion Consortium (NBIC) (US)
• Business in the Community (BITC) announced KPMG in the UK in the Best Employer for Race list, and awarded the firm the Workplace Equality Award for Recruitment (UK)
• Winner of the 2017 Queen’s Award for Enterprise in the inaugural category of ‘Promoting Opportunity’ for its work on social mobility (UK)
• The Times Top 50 Employers for Women for the 7th consecutive year (UK)
• Silver Tier award for 2017 and a Bronze Tier award for the 2016 Australian Workplace Equality Index recognizing workplace support for LGBTI people (Australia)
• KPMG was recognized as one of Canada’s Best Diversity Employers for 2017 (Canada)
• 2016/17 Life At Work Awards Honouree, to recognize and celebrate employers with leading workplace strategies that champion I&D (Malaysia).

KPMG has a corporate citizenship strategy that is central to our identity that supports and reinforces our values and our purpose. KPMG member firms encourage partners and staff to engage with their local communities to inspire confidence and empower change. Over the past 12 months the KPMG network and KPMG people have invested more than US$105 million in local communities, and KPMG people have contributed 500,000 hours supporting communities, which includes more than 100,000 hours of pro-bono professional services.

KPMG firms across the world continued their commitment to lifelong learning. To date, KPMG has distributed more than 3 million books worldwide through KPMG’s Family for Literacy (KFFL), and is a proud supporter of Junior Achievement, Enactus, One Young World and WE Charity, among others.

• KPMG member firms serve 84% of Global Fortune 500 companies.
• KPMG’s alliances with market leaders like IBM, Microsoft and Oracle further extended the breadth of technology-based offerings for clients around the world.
• The Forrester Wave: Information Security Consulting Services, Q3 2017 has ranked the KPMG network as a leader in Information Security Consulting Services.