London (Sept. 16, 2004) -- KPMG's international chairman said this week that the accounting firm could transform into a single global partnership within 10 years, according to published reports.
KPMG International chairman Mike Rake said that the creation of a single global partnership would depend on regulatory changes, including new protection for auditors against negligence claims that would limit firms' liability, the Financial Times reported.
The recent spate of business scandals has led regulators to express concerns about the inconsistent standards of audit work offered by the Big Four firms' member partnerships. Rake said the reform would solve that unease, the FT said.
"One can see a time when the accounting firms might be able to form single partnerships ... because life will have become more sensible and coherent from a regulatory point of view and a liability point of view," Rake told the paper.
While he said that KPMG has no current plans to transform itself into a single global partnership, Rake reportedly said, "It is something we are going to have to look at very closely indeed. I personally think it would be, on balance, a good thing."
KPMG has 93 member partnerships. The creation of a single global partnership could provide large cost savings for a firm and its clients, according to the report.
Rake also predicted that some countries would harmonize their oversight of the accounting profession in the next decade, potentially removing another obstacle to the formation of a single global partnership, the FT said.
-- WebCPA staff
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