KPMG's profits from UK accounting activities fell by 21% last year according to figures released this week by the Big Four firm. Profits per partner were badly hit falling from £462,000 last year to £352,000.
Pre-tax profits for KPMG LLP, the UK division of KPMG international rose from £304m to £406m over the past 12 months. The 21% fall comes on continuing operations which fell from £269m in 2001 to £212m.
The bitter pill of falling profits per partner will be sweetened slightly by payments of £34,000 on average to partners after the sale of KPMG's management consulting operation to Atos Origin.
Mike Rake, Chairman of KPMG LLP commented on the figures, “Tough trading conditions and downturn in financial markets made this a difficult year for everyone.” Rake continued, “Restructuring, redundancy and higher people costs have affected our level of profitability. But, following the sale of consulting, we now have one strong balance sheet – and we're in good shape for the year ahead.”
Rake tried to place KPMG at the front of reform to the profession, “KPMG will continue to be a champion for reform in 2003. In the UK, we have been working closely with the government and regulators to discuss sensible change and address public concerns over how the accounting industry operates.”
Rake spoke of the likely changes to the role of auditors in the year ahead, “For auditors to be truly effective in their role, they must have access to the experience and knowledge that working in a multi-disciplinary environment can provide. We will continue to follow our guiding principles of integrity, objectivity, and quality in everything we do, for the benefit of both our clients and our people.”