- On Monday, the US Securities and Exchange Commission charged the accounting firm KPMG with illegally obtaining sneak peaks in regulators' plans to review its work before making changes to eliminate potential problems.
- The SEC also claims that KPMG auditors cheated the firm's training exams, calling its ethical errors "simply unacceptable."
- KPMG admitted wrongdoing and will pay a $ 50 million penalty to settle the charges as the SEC continues to investigate the audit firm.
KPMG, one of the big four returning companies that Wall Street and the public are relying on auditing public corporations, apparently is not as well reviewed. The company pays $ 50 million to the US Securities and Exchange Commission to settle allegations. Former employees had an illegal look at the regulators' plans to review their work, and KPMG auditors cheated on the company's training test.
On Monday, the SEC charged KPMG to change previous audit work after stealing information on company inspections to be performed by the Public Company Accounting Oversight Board.
In addition, "many KPMG auditors were cheated on internal training exams by mistakenly sharing responses and manipulating test results," the SEC said in a statement.
"High quality accounts prepared and audited in accordance with current accounting principles and professional standards are the foundation of our capital markets. KPMG's ethical deficiencies are simply unacceptable," said SEC President Jay Clayton.
"It is honest that the breadth and gravity of the negligence committed here is", says Steven Peikin, co. Director of SEC's Enforcement Division added.
According to a SEC order, former leading members of KPMG's Audit Quality and Professional Practice Group were "incorrectly obtained and used confidential information" from 201
Company employees wanted the information because KPMG "had experienced a high degree of aud the lack of previous PCAOB inspections and had improved its inspection performance a priority," SEC noted. After obtaining a secret list, company executives would then revise audit work documents to reduce the likelihood that "PCAOB would find deficiencies," according to the regulator.
In addition to paying a $ 50 million. Punishment acknowledged KPMG's misconduct and advocated keeping an independent consultant to review and assess its ethics and integrity and compliance policies.
On his website, KPMG describes its ethical culture as a "where everyone includes a sense of personal responsibility to do the right thing in the right way."
In an emailed statement to CBS MoneyWatch, KPMG stated: "Integrity and quality remain our focus, as always. The basis of our role as auditors and advisors is trust. We have learned important experiences through this experience and we are stronger as Following on from the actions we take to strengthen our culture, our governance and our compliance program, as we move forward, we are committed to delivering the highest quality and fulfilling our important role in the capital markets. "
Company insurance was met with skepticism by J at Baumunk, an accounting academy at San Diego State University. "The problem with this is that we have heard it before. The accounting industry has had problems with Arthur Andersen leaving the business," said Baumunk of the closing company that provided auditing services to Enron, the scandalous energy company that went bankrupt in 2001 "Has the accountant really learned his lesson because of past scandals, is it something we have to see again and again?"
The SEC study continues, the agency said.