KPMG paying $8.2M to settle SEC charges

Published on NewsOK Modified: January 24, 2014 at 3:32 pm •  Published: January 24, 2014
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WASHINGTON (AP) — The big accounting firm KPMG has agreed to pay $8.2 million to settle federal regulators' charges of compromising its independence by providing non-audit services to companies whose books it audited.

The Securities and Exchange Commission announced the settlement Friday with New York-based KPMG, one of the so-called Big Four accounting firms with Deloitte, Ernst & Young and PricewaterhouseCoopers.

The SEC said KPMG violated auditor independence rules by providing prohibited non-audit services like bookkeeping to the companies involved. The companies weren't named. In addition, the SEC said some KPMG employees owned stock in companies that were KPMG audit clients.

KPMG neither admitted nor denied the allegations. The company is paying about $6.5 million in restitution and interest, and a $1.77 million penalty. KPMG also agreed to hire an independent consultant to monitor its compliance with rules.

In a statement, the company said "KPMG has implemented internal changes that are designed to ensure its ability to comply with restrictions on providing non-audit services."

The SEC has brought a number of cases involving auditor independence against big accounting firms in recent years. Some firms have been sanctioned multiple times. The issue came to the fore in the Enron scandal that broke in late 2002 and in several accounting scandals involving big corporations that followed it. Investigators raised questions about close ties between Enron and Arthur Andersen LLP, which did both auditing and consulting work for the now-defunct energy trading company.

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