State Board Report

May 2017

KPMG’s discovery that it had received advance information of which engagements would be inspected by the Public Company Accounting Oversight Board led to its firing of five partners, plus another staff member, and contacting both the Securities and Exchange Commission and the Public Company Accounting Oversight Board. One of KPMG’s employees who had previously worked for the PCAOB had received the leaked advance warnings from a PCAOB staff member. Among those fired was Scott Marcello, KPMG US Vice Chair- Audit and Regional Head of Audit, Americas. A private investigator found that the six had either received the information or were aware that the information had been improperly shared.

Lynne Doughtie, KPMG Chairman and CEO stated, “We are taking additional steps to ensure that such a situation should not happen again.”

A PCAOB spokesperson said its “investigation identified inappropriate disclosures by an employee, and the employee is no longer with the PCAOB.” It has taken steps to “maintain and reinforce the integrity of its inspection process.”

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