Big-four accounting firm KPMG LLP has fired six people, including the head of its audit practice, after they received confidential information from the board that oversees public company audits.
The firm said it learned in February that an individual who had joined KPMG from the Public Company Accounting Oversight Board had received the information from a then-PCAOB employee and shared it with others at the audit, tax and advisory giant.
The six people, five of whom were partners, received improper warnings about engagements that were to be inspected by PCAOB, potentially undermining the integrity of the regulatory process, KPMG said in a news release Tuesday.
None of the firm’s audit opinions or any company financial statements were affected, the firm said.
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“KPMG has zero-tolerance for such unethical behavior,” said Lynne Doughtie, KPMG’s chairman and CEO, said in a statement. “We are taking additional steps to ensure that such a situation should not happen again.”
Auditors act as a critical third-party monitor of corporate financial statements relied on by investors. The PCAOB is a nonprofit corporation created by Congress in the 2002 Sarbanes-Oxley Act to check the integrity of these audits.
A KPMG spokesman said the firm is not identifying the people who have left the firm. The Wall Street Journal said Scott Marcello, who headed the audit practice, was among those fired.
The disclosure is the latest blow to KPMG, which has also faced questions about why it didn’t catch sales practice problems at Wells Fargo, which it audits.
In October a group of Democratic senators, including Elizabeth Warren of Massachusetts, sent a letter to the firm asking why KPMG failed to identify illegal activity when it audited the bank’s financial statements from 2011 to 2015.