KPMG yesterday reported global revenues of $12.2 billion (€10 billion) for 2003, making it the smallest of the Big Four accounting firms.

Revenues rose 13.4 per cent in US dollars in the fiscal year to September 30th last compared with 2002. But if currency fluctuations are stripped out, the growth was a more modest 5.4 per cent.

Mr Mike Rake, KPMG global chairman, tacitly admitted that the firm's efforts to improve its standing following US business scandals were hampered by its disputes with the US Securities and Exchange Commission (SEC) and the Internal Revenue Service.

However, he expressed confidence that KPMG would reach a settlement soon with the IRS over sales of allegedly abusive tax shelters. He also suggested KPMG and the SEC would resolve the regulator's lawsuit over its audit of Xerox, the copier company, during 2004.

"We are very optimistic both these cases - none of which has had significant financial implications - will be resolved, hopefully within the next few months," he said.

KPMG was "looking on in horror" at the Parmalat scandal, partly because of the damage it was doing to efforts to restore confidence in the accounting profession.

Mr Rake has sought to improve KPMG's standing since US business scandals came to light by withdrawing from legal and fiduciary services. Global audit revenues rose 20.3 per cent to $5.7 billioduring 2003, tax by 8.9 per cent to $3.3 billion and advisory services by 7.1 per cent to $3.1 billion.

Deloitte reported revenues of $15.1 billion for 2003, compared with $14.7 billion at PwC and $13.1 billion at Ernst & Young. Mr Rake highlighted how Deloitte's revenues included consulting income. - (Financial Times Service)