KPMG partners cheated in exams.

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?

Actually, no.

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.”

Would a good liar make a good accountant?

Do you have children? Have they ever told you a lie? Even a small teeny weeny lie? Well, if they have then although you may[..]

How much do Big 4 partners get paid?

KPMG UK released their results last month for their most recent accounting period and they showed a fall of 10% in pay for the KPMG[..]

KPMG fires unethical partners

Picture the scene – you’re the senior auditing partner of KPMG in America with more than 30 years of experience serving some of KPMG’s most[..]

Out of this world advertising...

Getting professional photos taken for advertising can be expensive but this particular photo shoot for Estee Lauder is expensive. Very expensive in fact. 4 hours[..]

An Apple for 100 Companies..

Whilst a lot of companies around the world are struggling or going out of business due to the Covid-19 pandemic, some are doing very well.[..]

Cows vs. oats

Things are changing in the milk business. Or rather, I should say things are changing in the dairy milk and vegan milk business. Over the[..]

Big Mac with 4 sides

We blogged last year about the former boss of McDonald’s being fired due to a relationship with a colleague but it turns out, there may[..]

Rocking along nicely...

Years ago, advertising largely used to be based around TV, radio, magazines and newspapers. Then the Internet came along and changed things dramatically. One of[..]