Large numbers of KPMG US audit professionals cheated on internal training exams, improperly sharing answers and manipulating the test results.
A US Securities & Exchange Commission (SEC) investigation found that KPMG staff who had passed training exams sent their answers to colleagues to help them to also attain passing scores. The exams related to continuing professional education and training mandated by a prior SEC order finding audit failures. The cheats sent images of their answers by email or printed out the answers and gave them to colleagues. This included lead audit engagement partners, who not only sent exam answers to other partners but also solicited answers from and sent answers to their subordinates.
In addition, certain audit professionals manipulated an internal server hosting training exams to lower the score required for passing. By changing a number embedded in a hyperlink, they manually selected the minimum passing scores required for exams.
At times, audit professionals achieved passing scores while answering less then 25% of the questions correctly.
KPMG has admitted the facts in the SEC’s order. In mid-June, the firm was also charged with altering past audit works after receiving stolen information about inspections. The Big 4 firm agreed to settle the two charges by paying a $50m penalty, and retained an independent consultant to review and assess the firm’s ethics and integrity controls.
SEC chairman Jay Clayton said: “KPMG’s ethical failures are simply unacceptable.”
