KPMG Fee Income
KPMG UK revenues for FY20 was 2.3 billion pounds. Revenue was lower by 4% when compared with FY19. FY19 fee income was 2.4 billion pounds. See below for a breakout of KPMG fee incomes over the past five years. Fee income grew on an average of 3% over the past five years.
Looking at the break-down of fee income among audit clients and non-audit clients we notice that direct audit fees has increased on an average by 6% while non-audit services to audit clients has decreased on an average by 11%. Advisory income has increased on an average by 5% for 5 years. The table below shows the break-down in millions pounds. There is a consistent trend among all big4 firms where non-audit services to audit clients are decreasing.
KPMG Quality Reports
KPMG’s UK 2020 Transparency Report mentions that of the FTSE 350 audits, 58% of the audits have been graded as good or limited improvement needed while 42% were graded as improvement needed.
The Financial Reporting Council (FRC) published its latest inspection reports on KPMG in July 2020. Of the 18 audits reviewed, 11 (61%) were graded as good or requiring limited improvements. 7 (39%) were graded as improvements needed. Of the 12 FTSE 350 clients reviewed, 7 (58%) were graded as good or limited improvement while 5 (42%) were graded as improvements needed. In regards to the FTSE 350 audits reviewed, FY20 results reflects a significant decline from the 80% good or limited improvement rating received in FY19. The graph below summarizes the results FRC inspections for all audits and FTSE 350 audit clients.
KPMG FTSE 350 Clients
KPMG audits 88 of the FTSE 350 companies bringing in a total revenue of 347 million pounds. KPMG brings in the largest revenue among all big4 companies. Barclays is the biggest audit client of KPMG which brings in revenue of 56 million pounds, i.e. 16% of the total FTSE 350 audit fees. British American Tobacco is the next biggest audit client which brings in 25 million pounds. The top 5 audit clients collectively bring in 41% of the total revenue. All 88 KPMG clients and their audit fee is included in the below graphic.
The top 25 clients of KPMG in this market are:
| Company | Auditor | Total ('000) GBP |
|---|---|---|
| Barclays plc | KPMG | 56,000 |
| British American Tobacco plc | KPMG | 25,200 |
| Prudential plc | KPMG | 22,943 |
| Standard Chartered plc | KPMG | 20,150 |
| BT Group plc | KPMG | 19,752 |
| Micro Focus International plc | KPMG | 15,396 |
| Reckitt Benckiser Group Plc | KPMG | 14,500 |
| Unilever plc | KPMG | 14,392 |
| BHP Group Plc | KPMG | 10,964 |
| M&G plc | KPMG | 9,600 |
| Legal & General Group plc | KPMG | 9,500 |
| Smurfit Kappa Group Plc | KPMG | 8,800 |
| Standard Life Aberdeen Plc | KPMG | 8,100 |
| RSA Insurance Group | KPMG | 6,900 |
| Smiths Group Plc | KPMG | 6,400 |
| Compass Group plc | KPMG | 6,300 |
| Capita plc | KPMG | 6,100 |
| Wood Group (John) Plc | KPMG | 5,434 |
| Smith & Nephew plc | KPMG | 5,132 |
| Quilter Plc | KPMG | 5,000 |
| Experian Plc | KPMG | 4,302 |
| IWG plc | KPMG | 3,600 |
| Balfour Beatty plc | KPMG | 3,300 |
| Royal Mail PLC | KPMG | 3,147 |
| DCC plc | KPMG | 3,016 |
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