KPMG reports a lack of LLP support in UK
KPMG warned rival Big Six firms this week that UK companies did not want them to register off-shore to limit their liability.
A MORI telephone poll commissioned by KPMG revealed that 65% of UK public companies said it was not acceptable for accountancy firms to form limited liability partnerships in the Channel Islands or the Isle of Man. The firm also claimed that 65% of banks and 55% of investment companies in the City said they would view a move offshore negatively.
The decision to publish the results was widely seen as an attempt to embarrass rival firms in the run-up to a decision on joint and several liability law reform by the DTI. KPMG incorporated its audit practice last year to protect the firm’s partners from joint and several liability.
One firm commented: ‘You have to wonder why KPMG is taking this line.
But if its partners want to have a slanging match, they can have one by themselves.’
A spokesman for Price Waterhouse which, along with Ernst & Young, plans to register in Jersey early next year, said: ‘We’re not sure this poll is very representative. We’ve spoken to our clients and they are happy with our plans.’
Colin Sharman, KPMG’s senior partner, questioned whether other accountancy firms had considered the views of clients fully. ‘It could be very damaging for the profession if its standing within the business community and the City were to be impaired by actions taken without full consultation with clients and accounts users.’
A separate survey by medium-sized firm Smith & Williamson revealed that only 38% of law firms are currently considering ways of limiting partners’ liability. But only 14% are considering the incorporation route, in contrast to the 54% of chartered surveying firms who responded.
Most law firms are being cautious: 43% of the solicitors firms questioned said they were most likely to remain as a partnership, but increase their level of professional indemnity cover.
