As this year’s International Annual Review clearly demonstrates, our record of achievement over the past year has been notable. We’ve been delivering on our global growth strategy and have made significant investments in our business. We’ve further enhanced the ability of member firms to deliver a consistently high level of client service around the world and have made important contributions to our communities and our environment. We’ve experienced growth in revenues and talent across key markets and practice areas. And – of particular importance today – we have contributed to the public interest debate on the need to strengthen confidence in the audit profession.
In my travels this year, I have met with more than 400 CEOs and have noted a continued decline in business confidence and increasing concern about the scale and scope of regulatory change, both of which are having a deep impact on our business and our profession.
Restoring trust to the markets
In all our activities, we strive to demonstrate that integrity and quality are the bedrock upon which we conduct our business. We recognize and respect the public interest in the role we play in helping markets avoid further global financial turmoil and firmly stand behind initiatives, both internal and external, to improve audit quality.
We also believe that some of the proposals now on the table in certain jurisdictions are overly simplistic and may ultimately do more to harm audit quality than enhance it. And so we are committed to working closely with policymakers, regulators, investors and board members to ensure opportunities for significant quality improvement are not missed.
Enhancing our value
For KPMG, this rapidly evolving market has been a catalyst for change. Indeed, over the past year, our organization has evolved, restructured and grown in key areas to ensure that our member firms are continuously positioned to support our clients.
We have placed renewed focus on those issues that matter most to clients; made strategic acquisitions such as BrainNet and deployed the strong intellectual property acquired with EquaTerra; expanded our Centers of Excellence in key areas such as financial services, infrastructure and cloud computing; focused our investment towards high-demand services, such as data and analytics, and on the relevance, effectiveness and efficiency of our Audit service.
A leader in high growth markets
I am particularly proud of our activities in the high growth markets, where we are widely recognized as one of the leading thinkers, innovators and service providers. We are committed to becoming the leading professional services firm in each of the high growth markets.
This past year, we grew our Global China practice, expanded our Tax practice in Brazil, China and Russia, and kicked off a 5 year, USD100 million program of investment to enhance our service offering in Africa. We also expanded our footprint in many other high growth markets such as the Middle East, Turkey and Indonesia. Moreover, having moved my global office to Hong Kong, we are also the only global professional services organziation that is led out of Asia.
Catalyzing action on key issues
We have gained significant recognition for our efforts to advance the world’s understanding of key issues. This year for example, we brought the world’s top business leaders together with sustainability experts and leaders such as Ban Ki-moon and Michael Bloomberg to talk about the environmental agenda for businesses in advance of the Rio+20 Summit. Our summits and conferences on tax, healthcare and financial services were welcomed enthusiastically by clients.
A consistently high level of service
At the same time, we refocused our global service delivery model to support the provision of high quality services around the world. We have further enabled our Global Lead Partners to bring our considerable capabilities to bear across our various functions, geographies and sectors to ensure we are meeting and exceeding client expectations.
We also took action to improve our information backbone through the roll out of our new Integrated Business System (IBS) which provides our people with high quality, consistent information through common systems and processes. We have enhanced our knowledge management tools, expanded our use of internal and external social networking platforms and we have expanded KPMG Global Services (KGS), our offshore function based in India, to provide our member firms with access to research, project support and client benchmarking.
The right talent at the right time
KPMG professionals have a clear understanding of how today’s market trends influence their clients’ current and future organizations. That is because we hire high potential people and offer one of the world’s best professional training grounds, focused on helping our people stay ahead of emerging trends.
Our focus on securing the brightest talent is also succeeding. In the past year, we grew our talent pool in key markets and global growth areas and increased our global headcount by more than 7,700 people. In fact, according to a global survey of business students conducted by Universum, KPMG is ranked as the second most attractive employer in the world, an honor that we have achieved for 3 consecutive years.
Putting our experience to work in our communities
We believe that our greatest contribution to society comes from applying our skills, values and experience to the many challenges that clients and our communities now face. We are a leader in environmental sustainability and have helped many leading organizations – including our own – reduce their carbon footprint by leveraging our deep body of knowledge and experience. And, as a result, we were recently named as the ‘Sustainable Firm of the Year’ by the International Accounting Bulletin.
At the global level, our organization achieved noteworthy success against our corporate responsibility agenda and reaffirmed our commitment to key programs such as the UN Global Compact, the Millennium Villages Project and the UN-Business partnerships service. And, as this report demonstrates, our individual member firms are actively helping improve the lives of those around them and building trust between our communities, businesses and public institutions.
Building a strong platform for growth
Together, we did not just weather the economic storm over the past year; we grew through it. Global revenues for the KPMG network for the 2012 fiscal year rose by more than 4 percent (in local currency terms) to a record-high USD23.03 billion, boosted by double digit growth in many of the high growth markets and resilient growth in the Americas (7 percent) and in our Europe, Middle East and Africa region (4 percent). We also increased revenues across each of our functions with the Advisory business growing by 8.3 percent, the Tax practice by 6.3 percent and the Audit practice by 0.9 percent.
Looking ahead, we firmly believe that our record of success over the past year uniquely positions us to drive continued growth in the short and long-term, but more importantly, provide assurance and benefits to clients and the wider community. In this report, we focus on those who define who we are as an organization: clients, people and communities.
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