KPMG fined $50 million, stole PCAOB data and cheated on exams
Monday, June 17, 2019 at 1:08PM
KPMG LLP
agreed Monday to pay a $50 million fine to settle SEC civil charges that former partners used stolen information to learn about surprise regulatory reviews of the firm’s audits and cheated on training exams.
The SEC charged KPMG in an internal administrative order (pdf) and didn’t go to court. KPMG admitted the SEC’s findings and allegations.
The firm agreed to hire an independent consultant to assess its remedial measures and compliance with ethics and integrity requirments.
KPMG audit professionals who had passed training exams sent their answers to colleagues to help them attain passing scores, the SEC said.
The mandatory continuing education exams are required by the Public Company Accounting Oversight Board or PCAOB. The exams cover ethics and integrity and other professional training.
Lead audit engagement partners “sent images of their answers by email or printed answers and gave them to colleagues,” the SEC said.
KPMG officials also manipulated the minimum score needed to pass the training exams.
“At times, audit professionals achieved passing scores while answering less than 25 percent of the questions correctly,” the SEC said.
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