One of the big four accounting firms, KPMG, will be paying a $50 million fine to settle SEC allegations that it not only altered past audit work, but did so after receiving stolen information from an industry watchdog, according to Bloomberg.
The fine comes from a point in KPMG history that led to five of its former employees being accused of interfering with PCAOB inspections of the company.
The case stems from former KPMG officials who obtained a list of inspection targets by the PCAOB and tried to "revise certain audits" prior to inspections, in order to reduce the likelihood of the government finding shortfalls.
SEC Chairman Jay Clayton said:
“KPMG’s ethical failures are simply unacceptable. The resolution the Enforcement Division has reached holds KPMG accountable for its past failures and provides for continuing, heightened oversight to protect our markets and our investors.”
But don’t worry, as one astute Twitter observer noted, we’re sure the rest of those audits are all just fine.
but don't worry all those corporate earnings they audit are kosher... https://t.co/3E6zI7dUc6— FxMacro (@fxmacro) June 17, 2019
KPMG admitted wrongdoing in its settlement with the SEC and also agreed to hire an independent consultant to review its internal controls.
The investigation ultimately resulted in criminal charges against three former PCAOB officials in January 2018. Federal prosecutors accused the PCAOB employees, who then went on to work for KPMG, of stealing information.
The SEC has stated that its probe into the matter is "continuing".