KPMG has formed a strategy alliance with McLaren Group to integrate the technology provider’s predictive analytics into its audit and advisory services.
The decade-long agreement will see KPMG use McLaren Applied Technologies’ (MAT) in order to increase its audit capabilities and develop new advisory services for its clients. MAT will also allow KPMG adopt predictive analytics and expand its focus away from historical financial data.
KPMG UK chairman Simon Collins said: "What it means for clients is that they’ll get more innovation, more use of predictive technology. They may see that directly, as in "here is a predictive technology tool", more likely they’re going to see it woven into things that we do and an enhanced service."
Initially, KPMG and McLaren will work on a selected number of clients and then seek to extend the services across the firm’s client base, Collins continued. "Today’s deal marks a substantial investment by our business in audit quality and extending our advisory offering."
The alliance is consistent with KPMG’s recent push to ‘evolve’ the role of auditors. In February this year, KPMG global head of audit Larry Bradley warned that the focus on historical data was chipping away at the value of audits for clients.
"Our primary product is based on a historical set of statutory financial statements," he explained, "However, stakeholders are clearly increasingly basing their decisions on information that resides outside of those statutory accounts."
He added that this was the single biggest issue for the profession.
Speaking to BBC Radio 4, MAT technical director Carline Hargrove said KPMG would benefit from the same predictive analytics tools McLaren employs for its racing cars. "Rather than doing an audit looking backwards at historical data," she explained, "we also want to help them look forward at what potential scenario might come up."
The partnership builds on McLaren Group’s existing experience in applying its technological capabilities within other industries, including pharmaceutical research and development and manufacturing.
McLaren Group chairman and chief executive officer Ron Dennis said the ten years duration of the partnership between KPMG and McLaren is unprecedented.