Further disciplinary outcomes could soon be enforced after more than 1,100 KPMG staff were found to have engaged in widespread cheating during mandatory internal training tests, leading to the firm receiving a $615,000 (US$450,000) fine from the US audit regulator, the Public Company Accounting Oversight Board (PCAOB).
KPMG has also been ordered to improve its policies and procedures to ensure that such misconduct is not repeated, and to report back to the PCAOB within 120 days.
The misconduct, which saw KPMG dock the pay of 16 partners and part ways with two, went on from at least 2016 to early 2020.
CA ANZ told Accountants Daily that any potential outcomes would only come after the 120-day period provided to KPMG to comply with orders and sanctions imposed on it by the PCAOB.
“This is an ongoing matter, we are aware that in accordance with the Order, KPMG is required to provide information to the PCAOB within 120 days. We continue to monitor the outcome of the firm’s and regulator’s actions,” a CA ANZ spokesperson said.
“CA ANZ administers its professional conduct oversight role with due process, as a result we are unable to comment on the implications of the PCAOB decision for members at this time.”
The PCAOB’s investigation, publicly released this week, found that the widespread sharing of answers during internal tests included topics such as professional independence, auditing, and accounting.
These in-house trainings contribute to an accountant’s continuing professional education – a requirement that is enforced by CA ANZ.
According to CA ANZ regulations, members who repeatedly fail to satisfy their CPD requirements could face expulsion from the body.
However, the cheating in itself is likely to attract more serious consequences, being a clear breach of the code of ethics set out by the Australian Professional and Ethical Standards Board (APESB).
Fundamental principles of the APES 110 Code of Ethics for Professional Accountants state that accountants must act with integrity, and must avoid any conduct that might discredit the profession.
Enforcement of the APESB standards falls upon the three professional accounting bodies, including CA ANZ.
CA ANZ notes that failure to meet the standard may result in disciplinary proceedings, with outcomes ranging from cautions, suspensions, and expulsions.
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.