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KPMG sacks six
KPMG has fired six staff members, including the head of its US audit practice, after the firm discovered they improperly received advanced warnings that the US watchdog was planning an inspection of one of their audits.
The Public Company Accounting Oversight Board revealed one of its employees had ‘left’ the organisation over the leak. It has now promised that it has taken steps to “reinforce the integrity of its inspection process”.
It appears a KPMG employee, who joined the firm from the regulator, had passed on information from someone who still worked there about which audits would be inspected. The leak only came to light via a whistleblower, and was referred to the oversight board and the Securities and Exchange Commission in late February. KPMG’s Lynne Doughtie said the firm has ‘zero tolerance’ for such unethical behaviour. She stressed that quality and integrity “are the cornerstones of all we do and that includes operating with the utmost respect and regard for the regulatory process”.
PQ columnist Professor Prem Sikka said the leak was a consequence of the close links between regulators and the big accountancy firms. He said: “It is not just the revolving door but the revolving carousel. There are constantly people from regulators going to accountancy firms and vice versa. All kinds of lines, all kinds of boundaries, are blurred.”
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