KPMG Response to Arthur Andersen Canadian Announcement

NEW YORK and LONDON (ots-PRNewswire) - KPMG, the international accounting, tax and consulting firm, made the following statement today in response to an announcement by Arthur Andersen regarding KPMG Canada: "We were surprised at Canada's decision, particularly in view of their continued assurances to us and their partners that they wished to remain part of the KPMG organization -- and given the significant progress KPMG International has made toward integrating all of its member firms globally," said Colin M. Sharman, chairman, KPMG International. He added, however, that the Canadian firm's leadership was unwilling to contribute to the international firm's global development costs. "We do not believe this action will have any measurable impact on KPMG International," Sharman said. "The incident was fostered by a leadership that may not be in touch with the interests of most Canadian partners." The decision to join Arthur Andersen still needs to be ratified by the majority of Canadian partners, he added. "We believe their unfortunate decision to join with Arthur Andersen is a consequence of Canada's burdensome unfunded pension obligation -- as well as their failure to take the proper steps to rebuild their operations last year," Sharman said. "Canada was the least profitable, on a net income per partner basis, of any KPMG member firm in North and South America," Sharman added. "Ironically, their announced departure removes what had been perceived by KPMG as an impediment to consolidation of KPMG's national practices in North America and Latin America. Indeed, their leadership's diminished role in a regional entity may well have contributed to their decision." Sharman said all of the KPMG national firms in the Americas will soon be integrated into KPMG LLP, the United States firm. "We're moving ahead quickly in response to today's news. We've already opened a dialogue with key practice leaders among Canada's partners to ensure that the most respected and valuable portions of the entity remain within KPMG International. We will be aggressive in preserving the practices and the clients that are most important to KPMG," Sharman said. KPMG LLP is the U.S. member firm of KPMG International. In the U.S., KPMG partners and professionals provide a wide range of accounting, tax and consulting services. As a provider of information-based services, KPMG delivers understandable business advice -- helping clients analyze their businesses with true clarity, raise their level of performance, achieve growth and enhance shareholder value. KPMG International's member firms have more than 6,700 partners and 92,000 professionals in 157 countries. KPMG's Web site is ots Original Text Service: KPMG LLP Internet: Contact: George Ledwith of KPMG LLP, 201-505-3543 Web site:

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