The US audit watchdog has fined KPMG Australia US$450,000, having found that the firm violated the Public Company Accounting Oversight Board (PCAOB) over several years in connection with its internal training program.
Namely, according to the PCAOB, from at least 2016 until early 2020, more than 1,100 firm personnel were involved in “improper answer sharing” in connection with tests for mandatory training courses covering topics that included professional independence, auditing and accounting.
PCAOB found, after being alerted to the irregularities by KPMG itself, that firm personnel primarily shared answers using email, by attaching documents containing answers to training test questions.
In addition, individuals also shared answers using text messages or instant message services, by providing the answers in hard-copy documents, by saving the answers to test questions on a shared server, or orally when taking tests in the presence of others.
The audit watchdog confirmed that KPMG has taken disciplinary action against 1,131 personnel, ranging from requiring individuals to retire to issuing verbal cautions, noting that absent the firm’s “extraordinary co-operation”, the civil monetary penalty imposed would have been significantly higher.
Coming clean
KPMG issued its own statement on Wednesday, confirming that as a result of the misconduct by “some of our people”, formal warnings and remuneration consequences were imposed on 16 partners, while two partners departed the firm following an internal investigation.
Another 30 people had their pay cut.
“While we moved quickly to get on the front foot with our response to this matter almost 18 months ago, it is important today to come full circle and be transparent and reinforce to our partners and people that this behaviour is totally unacceptable,” KPMG Australia CEO Andrew Yates said.
“I’m disappointed because the conduct reflects on all of us.
“Everyone at our firm is now absolutely clear that there are non-negotiable expectations of behaviour aligned with our values. Our partners and people understand that unethical behaviour has no place in the values-based culture at KPMG.”
KPMG confirmed that upon learning about the misbehaviour, immediate remediation steps were taken that included forcing employees to complete new tests.
The firm has also since implemented internal integrity training which highlighted, among other things, that sharing answers in relation to testing is not acceptable.
“Looking forward, we will place greater emphasis on building, measuring and managing our culture — embedding behavioural expectations into scorecards to drive accountability,” Mr Yates concluded.
KPMG ex-staff staff have infiltrated the ATO and other government departments. time to expose them.
Maybe we should make them all re-sit and update their qualifications, sit an ethics exam and have a FASEA exam and standards?
This is not a hefty fine at all. KPMG are auditors of our biggest companies and institutions. They have been found to be cheats on their ongoing training. The penalty has is pathetic.
this is endemic across the big 4 the government needs to step in.
I get this is a US related issue, but just another example of a big corporate doing the wrong thing and paying a small fine to put the issue to bed. Love how all of these governments talk about support to small business, but if this had of been a small business they would have been closed down.
It was actually the Australian division being fined by A US body
I get that, but it is just another case of large companies getting away with dodgy stuff while small companies get closed down for a fraction of the crime.