INTRODUCTION.
KPMG was formed in 1987 as a result of a merger between Peat Marwick International (PMI) and Klynveld Main Goedeler (KMG), and their personal firms. The development of KPMG can be traced through a history of the principal founding members whose names form the initials KPMG. K represents Klynveld; Piet Klynveld was the founder of Klynveld Kraayenhof & Co. a company in Amsterdam in 1917. P stands for Peat; William Barclay Peat was the founder of William Barclay Peat & Co, a company based in London in 1870. M stands for Marwick; James Marwick and Roger Mitchell were the founders of Marwick, Mitchell & Co. a company based in New York in 1897. G stands for Goerdeler: Dr. Reihard Goedeler was the chairman of Treuhand-Gesellschaft and later appointed as the KPMG chairman. Much of the groundwork of the merger among the different component firms of KPMG was mid-wifed by Goerdeler, and, therefore, the significant credit accorded to him by the company (Bohn, and Driver, n.d pp 23)
In the late 1990’s, the firm strengthened its core business of audit, tax and consulting services. KPMG was formed under the role of providing professional Audit, Tax, and Advisory services. During the first decade under operation, the firm proved to be successful with a growing profit of 11.1% in 1997 as compared to 1996 profits. In the subsequent years, the company continued to increase its annual profit levels with the highest being a revenue growth of $10.4 billion in 1997. With this success, the firm launched an effort to unify its operations, boost its brand recognition, and form a centralized operation. To this effect, Peat Marwick launched a $60 million for brand recognition and global branding campaign.
Currently, KPMG firm can be found in over 140 countries worldwide, which collectively employ at least 135000 people annually across a range of disciplines (KPMG. Com. n.d par 6). In Africa, KPMG Africa Limited (KAL) has a separate legal entity that comprises of 14 national practices in the Sub-Saharan Africa. These firms are managed as one firm from a client’s perspective; the firms are managed under unit governance and one Executive committee. The head offices are located in South Africa where the chairman and executive committee reside.
KPMG IN EGYPT.
The company established its operations in Egypt in 1942. KPMG in Egypt is among the leading accounting and advisory firms in the country and Middle East (Bohn, and Driver, n.d pp 25). The clients cover a wide range of industries in the country giving it a significant chance for customer specialization. The company has also incorporated the modern and latest ergonomic and technological designs, which facilitate its operations.
The company provides audit services; auditing is considered an independent service that enables information reliability and use to stakeholders and investors (KPMG. Com. n.d par 11). The company also offers tax services that are attributed to changes and flexibility of the country’s tax system. Continued changes and new trends of taxation, in the country, expose new organizations to local and global tax regulations that are to the advantage of KPMG. Finally, the company offers advisory services to its clients; this assists clients in tackling restructuring, performance, risk and compliance, and technological changes. Such consulting services assist organizations in risk negotiations that enable then to perform in the dynamic and changing business environments. For twenty years KPMG in Egypt has recruited middle management professionals and executives, on behalf of multimedia and international organizations that operate in the country and Middle East. In Egypt, KPMG operates under the name KPMG Hazem Hassan.
KPMG HAZEM HASSAN.
KPMG Hazem Hassan is an Egyptian national firm that was established in 1942. The firm provides audit, tax and advisory and consulting services to a massive number of clients who come from a wide range of industries. KPMG Egypt is a limited liability partnership, which is owned by partners and governed under Egyptian law (Wahish 2005, par 3). The firm’s structure is designed in support of consistency of quality service and adherence to agreeable values that apply to KPMG international. By 2012, the firm had an average of thirty two partners, which was a rise by one as compared to 2011’s thirty one. The firm is responsible for own liabilities and obligations and operates as a separate entity from KPMG.
The key management and governance of KPMG Hazem Hassan includes the council, board of management, and the executive committee (KPMG. Com. n.d par 13). The council consists of partners and focuses on the high-leveled governance tasks. The council approves the strategies of the firm, annual business plans, and financial and budgetary statements. It is also obliged to select partners, CEO’s and COO’s. The management board acts as the principal governance and overseer of KPMG Hazem Hassan. Its prime role is to approve the firm’s strategies awaiting final approval by the council. The board also sets policies, business plans and approves set regulations and policies. It consists of five executive committee members, and five partners who are appointed by the council. The board meets seven times in a year as per the provisions of its constitution, which is determined by the council.
At the moment, the KPMG Hazem Hassan management board is headed by Hazem Hassan. The executive committee, on the other hand, recommends for policies and develops business plans within the strategies set by the management board. It deals with matters that affect the firm’s operations such as budgets, business projects and new proposals, financial and operating performance, remuneration, and retention, among others. This committee comprises of an audit steering committee, tax steering committee, advisory steering committee, infrastructure departments, industries steering groups, and quality and risk management steering committee.
History and background.
Hassan’s firm was incorporated in 1942 under the name of Zaki Hassan (Bohn, and Driver, n.d pp 26). In a span of the first 60 years of its operations, the firm faced significant challenges the major one being changes in business triggered by economic development phases in Egypt at that time (Meed 1985, pp 12). In 1960, for example, the operations of the firm were challenged by nationalization, open door policy of the 1970, and economic reforms in 1990. The most significant challenge involved the introduction of customs and taxation policy in the country, which led to a significant decline in profit base of the country (Wahish 2005, par 4). Another operation threat arose in 2001 with the placing of all accounting and auditing firms under the spotlight after the corruption case involving Enron.
The effect of globalization in the late 1950’s made a considerable remark as long as the development of KPMG Hazem Hassan firm is concerned (Aharoni 2000, pp 37). The firm’s accountancy business almost came to a standstill following the establishment of the Central Auditing Agency (CAA) (Wahish 2005, par 6). At least 90 % of the business went to CAA and whatever was left in the firm was small to keep the business running. CAA went ahead and recruited accounting officers who enrolled in its different departments. Hassan did not escape these developments as most of his employees and himself went to work as civil servants for at least 10 years in CAA.
Hopes for getting up the business arose with the introduction of the open-door policy. Hassan opted to go back to Egypt with hopes that new ventures opening as a result of this policy would require his services. The idea was to run the firm locally and internationally. For this venture to succeed, Hassan contacted Peat, Marwick, Mitchell & Co, now called KPMG, and asked to represent them. This meant that the company had to upgrade its operations to fit those of KPMG by improving on its quality of services (Wahish 2005, par 8). The move to upgrade the business gave Hassan a leeway to build a client base, which is experienced in the firm up to today. Not only did the firm get KPMG clients, but it also got clients from other competing accounting firms who feared the economic state of Egypt at that time.
KPMG Hazem Hassan has currently grown with Egypt’s economy. Currently, accounting and auditing services are an essential of the firm. The growing role of capital market, high rate of increase in the number of Egyptian companies willing to borrow, issue bonds or get listed in the international stock exchange, and the urge to be audited by credible firms, have led to the tremendous growth of KPMG Hazem Hassan (al-Dīn, Hanāʼ Khayr 2008, pp. 23).
Company size.
KPMG Hazem Hassan is currently the largest consulting and accounting firm in Egypt, Middle East and Africa. Its client vary from commercial, investing, industrial, banking, insurance, information, communication, advertising, and owners companies and hotels, among others (KPMG. Com. n.d par 7). This gives the firm a significant opportunity to serve and specialize, which puts it in a position to have professionals in every field. The company has worked with, among many, Telecom Egypt and Orascom Construction industries. Besides these services, the firm also offers human resource developmental programs. The firm offers recruitment as well as organizational services. The firm’s employees possess knowledge, skills, and a clear understanding of the needs of the clients. For twenty years, the firm executive and selection search has successfully recruited executives and management professionals in both local and international perspective. The firm also covers the recruitment of junior staff with at least five years experience, and new graduates through an online career center.
The human resource department also offers a comprehensive range of consulting services. These include salary and benefit surveys, employees’ satisfaction surveys, designing performance appraisal systems, HR audits, job description designing, conduction job evaluations, manpower planning, and preparation of employee compensation schemes among others. The services offered by KPMG Hazem Hassan range from transaction to corporate services. KPMG Hazem Hassan’s transaction services provide for mergers, acquisitions, and divestiture support. This is achieved through placing emphasis on risk and opportunity identification, and determining shareholders value, at an early stage. The firm focuses on complementing the strengths of its customers, assist in the determination of risks, and offer support at points and areas of need. KPMG Hazem Hassan provides a transaction support throughout the ‘buy’ and ‘sell’ cycle to both financial and strategic buyers. These include information systems, integration risk assessments, tax and accounting advisory services, human resource systems, and pre-bid financial assessments.
Under corporate finance, KPMG Hazem Hassan provides a long range vision, professional and innovative services and offers perspective insights to customers in various business sectors. The firm aims at assisting clients in sustaining their businesses by transforming their opportunities into profitable results. The firm’s goal is to be viewed as an objective advisor and a trusted partner to its diversified range of clients. The firm also aims to be acknowledged as the preferred corporate financial services provider among its leading competitors who include Ernst & Young, Price Waterhouse Coopers, and Deloitte & Touche (Wahish 2005, par 7).
The corporate finance at KPMG Hazem Hassan serves local, regional and multi-national companies, state and government owned entities, and private sector institutions. This is achieved through a wide variety of services that include financial model review, enterprises valuations, and feasibility studies. Through the latter, KPMG Hazem Hassan provides an independent and professional evaluation of proposed enterprises and projects or for new branches opened by foreign companies. Through the financial model review, KPMG Hazem Hassan assists companies in reviewing their financial model for share floatation or/and bond insurance purposes. Through the valuation of enterprises, KPMG Hazem Hassan offers valuation studies for purposes of share floatation, mergers and acquisitions, privatization, and others
KPMG Hazem Hassan has over 1200 professionals who serve at least 2500 clients. The firm recruits professionals with both local and international experience in consulting, accounting, tax and auditing backgrounds. Among the key drivers of quality professionals is ensuring that they are assigned to the skills and experience appropriate to the needs of clients (Cattaneo, Olivier, and Peter, 2010, pp 142). This requires recruitment, promotion, development and retention of personnel and a robust resource and capacity management process.
Every interested candidate has to submit an application. The employment process involves a selection process, which may include application screening, qualification reference checks, and competence based interviews. Upon joining KPMG Hazem Hassan, the personnel are expected to participate entirely in on boarding programs, which may include training in such areas as independence and ethics. This ensures that all matters on conflicts of interests or independence are dealt with before individuals commence as employees or firm’s partners (KPMG. Com. n.d par 16).
The firm also offers personal development programs, which develop on behavior, skills, and personal qualities of the employees. In the audit and accounts function, technical training is considered as mandatory and is developed through briefings, e-learning and annual courses that strengthen the need for quality. Additionally, the firm has a coaching culture that encourages mentoring, consultation, and job training. Professional motivation is also observed in KPMG Hazem Hassan. The firm conducts evaluations from the annual goals set at the beginning of a financial year. All professionals undergo an annual goal setting and performance review. The professional are evaluated on the basis of demonstration of KPMG global ethics and behaviors, adherence to KPMG values, and attainment of agreed upon targets (Cattaneo, Olivier, and Peter, 2010, pp 154).
CONCLUSION.
KPMG Hazem Hassan is a member firm of KPMG international. The firm performs as a cohesive business unit and serves Egypt and Middle East nations. Besides its membership to KPMG international, the firm’s size assists in ensuring delivery of quality standards, which are in accordance with the international accounting practices and standards. The firm has a corporate social responsibility to its workers, clients, and communities. KPMG Hazem Hassan utilizes modern technology in ensuring efficiency and accountability to its customers. Besides technology, the firm employs the best labor providers in the accounting, audit and consulting fields. This has enabled its competitive power beyond its competitors. The firm’s management board prospects future growth of the firm and an increase in its policies and operation areas.
References.
al-Dīn, Hanāʼ Khayr. The Egyptian Economy: Current Challenges and Future Prospects. American Univ in Cairo Press, 2008.
Aharoni, Yair. Globalization of Services: Some Implications for Theory and Practice. London [u.a.: Routledge, 2000. Print.
Bohn, Edward, and Driver Louann. International who’s who of professionals: the ultimate professional directory. Business & Economics; Gilbater Publishing.
Cattaneo, Olivier, and Peter Walkenhorst. "Accounting Services: Ensuring Good Governance, Financial Stability, and Economic Growth through Trade." Trade in Services (2010): 263.
Egypt Almanac. Wilmington: Egypt-file Ltd, 2003. Print
KPMG. Com.eg. KPMG Hazem Hassan; Transparency report 2012. Work cited, http://www.kpmg.com/EG/en/about/Documents/Transparency%20Report%202012%20-%20Final.pdf
Meed. London: Middle East Economic Digest, 1985. Print.
Wahish, Niveen. Hazem Hassan: Code of Confidence. Al-Ahram weekly on-line, issue 756. August 2005. Work cited, http://weekly.ahram.org.eg/2005/756/profile.htm 18-24
