KPMG settles SEC case for $8.2 million

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Posted: Monday, January 27, 2014 12:00 am

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 last week 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 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.

The SEC has brought a number of cases involving auditor independence against big accounting firms in recent years. The issue came to the fore in the Enron scandal that broke in late 2002 and in several accounting scandals that followed it.

© 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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