Anyone that has studied hard for their exams will almost certainly at one time or another utilised the services of a strong coffee.
Whilst desperately trying to cram that last bit of knowledge into your brain before the exams there is often a temptation to grab a strong coffee late in the night to keep your mind awake.
For years students around the world have been utilising the caffeine in coffee to help get that extra mark or two.
Coffee is said to originate from East Africa where legend has it that a 9th century Ethiopian goat herder by the name of Starbucks Kaldi noticed that after his goats had ate some coffee beans they started bouncing around like teenagers at the local disco.
This started the journey of coffee and associated caffeine hits so loved by students around the world.
Over in China, one coffee chain has been in the news for all the wrong reasons.
Luckin Coffee was only set up 3 years ago but had lofty ambitions.
They described themselves as “a pioneer of a technology-driven new retail model to provide coffee and other products of high quality, high affordability, and high convenience to customers” and had vowed to overtake Starbucks as China’s biggest coffee chain.
They grew quickly.
Very quickly in fact as within 3 years they had 4,500 outlets around China.
They were also one of the small number of Chinese organisations to quote their shares on the US Nasdaq market.
Things weren’t all they were made out to be though as in April their shares were suspended on the Nasdaq market after the company revealed that they had uncovered $310 million in fake transactions.
It appears that some people in the organisation were so keen for the growth of the company to continue that they created fake sales so as to give the impression that their revenue was growing quicker than it was in reality.
The company announced the discovery and warned the market that investors could no longer rely on previous financial statements that showed rapid growth.
The ongoing financial investigation by the company has resulted in the chief executive and the chief operating officer being fired yesterday and six other employers have been suspended whilst investigations continue.
Ethics are pretty important if you’re a partner in an accounting firm. Unfortunately for these guys though they weren’t the most ethical of people as they were involved in cheating in exams.
The cheating was uncovered by the SEC (Securities and Exchange Commission) in the US. They were initially investigating claims that KPMG had altered previously completed audit work after receiving stolen information about what inspections would be conducted by the Public Company Accounting Oversight Board.
During that investigation however they also found that numerous KPMG audit professionals cheated on internal training exams by sharing answers.
Cheating at exams by sharing answers? Surely that would be a junior member?
The key people involved were (now former) KPMG audit partners.
The investigation stated that former partners Timothy Daly, Michael Bellach, and John Donovan were involved in the cheating.
They had obtained images of questions and answers to the tests from subordinates and then shared them with members of their team.
The tests which were taking place were in connection with ensuring that KPMG audit staff understood certain accounting and auditing principles.
KPMG themselves became aware of potential cheating on the exams and began an investigation. They sent a document preservation notice to all KPMG staff (this basically means not to delete or destroy any potential evidence).
The ex-partners however ignored this preservation notice. They deleted various text messages and denied any wrongdoing to KPMG investigators.
KPMG were obviously not happy with the situation when the truth emerged and the partners soon became ex-partners of KPMG.
The three individuals were also suspended from appearing or practicing as an accountant before the SEC (although they can apply for reinstatement in the future).
KPMG had a pretty bad time of it last year in terms of the stolen PCAOB information and the exam cheating and had to pay a penalty of $50 million.
Steven Peikin, co-director of the SEC’s division of enforcement, said: “Audit professionals play a critical role in the integrity of the financial reporting process and the protection of investors. These actions reflect our commitment to hold these gatekeepers responsible for breaches of their professional obligations.”
A KPMG spokesperson said “We are a stronger firm as a result of the actions we are taking to strengthen our culture, governance and compliance program.”
https://www.theexpgroup.com/wp-content/uploads/2020/05/kpmg-partners.png6271119Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2020-05-15 13:27:172020-06-02 13:18:00KPMG partners cheated in exams.
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