KPMG has acquired global sourcing and shared services provider EquaTerra to extend its consulting services across Europe, Asia Pacific and the US.
Terms were not disclosed, but the transaction broadens the Big Four firm’s global outsourcing and shared services advisory offerings. KPMG said the deal fits with its growth strategy of “focusing on organic and inorganic opportunities in select high-demand market sectors”.
The international audit firms are not as seamlessly global as they seem and this deal was completed separately by KPMG Holdings (UK), KPMG (US) and KPMG International.
The acquisition also strengthens KPMG’s hand in India, a country in which all of the Big Four firms are looking to expand their outsourcing capabilities.
However the growth of KPMG’s consultancy and outsourcing practice increases the risk of potential conflicts of interest between the firm consulting and audit wings.
According to re: The Auditors’ Francine McKenna in a recent blog post, “...the conflicts that drove three out of four of the firms to sell them [global consulting businesses] after Enron are a bigger problem than ever before.”
The EquaTerra is likely to create conflicts in the US and with companies in other parts of the world that are listed in the US.
McKenna added: “If the consulting firm was providing services to a KPMG audit client, they will have to stop or convert those services to fall under the ‘audit related’ category which is the latest dodge of Sarbanes-Oxley for risk and controls advisory services.”
KPMG responded to AccountingWEB.co.uk: “KPMG has rigorous risk and compliance procedures that ensure the avoidance of conflict and independent issues.”
In December last year AccountingWEB.co.uk reported on KPMG’s push towards an integrated approach to brand strategy across Europe.