In remarks at a press conference today marking the establishment of KPMG Huazhen (Special General Partnership), Michael Andrew, Global Chairman of KPMG International, said: "We believe that localisation is the best thing for KPMG in China."
Andrew's view is that KPMG Huazhen's conversion from a joint venture to a special general partnership – a structure identical to that of other large and mid-size Chinese accounting firms – will help KPMG to better serve Chinese clients and the Chinese market, enabling the firm to continue contributing to the development of China's accounting industry.
Stephen Yiu, Chairman of KPMG China and senior partner of KPMG Huazhen (Special General Partnership), agrees: "In 1992, KPMG Huazhen was the first accounting firm to be granted a joint venture license in China. Now we are the first accounting firm to convert from a joint venture to a special general partnership. Over the course of 20 years, we expanded from a little over 30 employees to our current headcount of around 9,000. We have witnessed the rapid growth of the Chinese economy, the continual maturation of Chinese capital markets, the rapid growth of Chinese enterprises, and the development and expansion of China's accounting industry – most especially in the rapid growth of a pool of outstanding local professionals. We are deeply proud to have had the opportunity to participate in and contribute to this process."
Yiu also expressed gratitude for the support and hard work of the Ministry of Finance and other government authorities during the conversion process: "The Ministry of Finance, together with other government authorities, released the conversion plan in May, only three months before the expiration of the joint venture’s license in August. For all of us, converting a joint venture accounting firm was a completely new undertaking. It was only through the strong support and guidance of the Ministry of Finance and other government authorities that we were able to carry out such a complicated series of conversion procedures within such a short period of time,"
Yiu explained that the conversion aims to ensure that the Big Four's joint venture operational models comply with the organisational models stipulated under Chinese law. Following the conversion, the firm will continue to operate in accordance with Chinese laws, regulations and professional guidelines, as well as with KPMG International's professional standards. The conversion will have no impact on KPMG’s existing operations.
Yiu confirmed: "KPMG will continue to equip our engagement teams with partners and professionals possessing the necessary qualifications, capabilities and experience." He firmly believes that, "the conversion will not affect our clients or staff, nor will it affect our business, the quality of our practice, or our ability to serve our clients. After the conversion, we are confident that we will be able to maintain the quality of our practice, continue working hard to develop talent locally, and continue contributing to the development of both China’s economy and the accounting profession, as a way of repaying the trust shown to us by capital markets, investors, regulators and society as a whole."
A ceremony marking the inauguration of KPMG Huazhen (Special General Partnership) was held earlier today. The special general partnership begins operation on August 1, 2012. Michael Andrew confirmed that KPMG International will continue to increase its investment in the Chinese market, and will draw on its global network to provide China's increasingly globalised enterprises with high-quality, globally consistent services.