[HN Gopher] KPMG Fined Record $25M in Exam-Cheating Scandal
___________________________________________________________________
KPMG Fined Record $25M in Exam-Cheating Scandal
Author : mfiguiere
Score : 56 points
Date : 2024-04-10 17:15 UTC (5 hours ago)
(HTM) web link (www.wsj.com)
(TXT) w3m dump (www.wsj.com)
| danlindley wrote:
| Related shenanigans: KPMG misused confidential Australian
| government information to help big multinational companies avoid
| paying more tax (2023)
|
| https://www.abc.net.au/news/2023-06-05/pwc-pricewaterhouseco...
| stuzenz wrote:
| actually, that was PWC - not KPMG. Although I think Deloitte
| was also implicated in some way
|
| https://www.internationaltaxreview.com/article/2bxqngyds66en...
| user_7832 wrote:
| As an outsider, all these firms appear equally (ethically)
| questionable. Is that correct or are there differences I'm
| missing out on?
| beezlebroxxxxxx wrote:
| Yes, pretty well all of the big firms have one big product
| they're selling: cover for questionable behaviour.
|
| They usually don't just break the law or cheat out of
| simple desire to. They're for hire and openly compete with
| their willingness to "transform", "cut red tape", "do
| things differently(tm)" which are euphemisms for
| questionable behaviour, usually at the public's expense but
| their customer's gain.
| tialaramex wrote:
| Yes, there were more of these goal audit firms (for legal
| reasons they are organised as groups of companies not a
| single large corporation named say KPMG), at first they
| merged and then a few of them did scandalous things (but
| they're run by rich old white men so they can't go to jail,
| the firm going bankrupt is the closest you get, everybody
| responsible retired wealthy and has no regrets) we're at
| the point where there are three left, they can count on no
| real consequences no matter what they do because fewer is
| just worse and nobody wants to admit that zero might be the
| correct number.
| doctoring wrote:
| > "The tests... cover topics such as U.S. audit standards,
| professional ethics and independence..."
|
| Ethics, you say?
|
| > "...involved hundreds of professionals, including partners and
| senior leaders such as the now former head of assurance..."
|
| When the scale of these things is so large in a single firm, and
| only comes to light after 2(!) whistleblowers, it is hard to
| imagine that it is an isolated incident in the industry.
| joelfried wrote:
| > "When the scale of these things is so large in a single firm,
| and only comes to light after 2(!) whistleblowers, it is hard
| to imagine that it is an isolated incident in the industry."
|
| Why would it be an isolated incident when the penalty is so
| small?
|
| KPMG's global revenue for 2023 was around $23 billion per DDG.
|
| When your fine for doing business the "wrong" way is around
| 1/1000th of your revenue, it's hard to see that as a meaningful
| punishment.
| jonstewart wrote:
| There's some truth to it but a consulting firm like KPMG is
| like a feudal empire, comprised of many little fiefdoms, all
| tasked with earning and growing a certain amount. A $25M fine
| means whichever department responsible has probably been
| nuked and won't be doing much of this type of work again.
| However, you are right that it's not significant enough to
| change how the emperor's court conducts oversight.
| ethbr1 wrote:
| The problem with KPMG et al. is that you hire a bunch of
| Machiavellian grads, arbitrage their time for profit, see who
| clambers to the top of the pile, then obscenely reward those
| few folks.
|
| While operating under a corporate structure that explicitly
| geo-fences liability.
|
| This is not a scheme that intrinsically creates strong ethics.
|
| In the same way that letters of marque weren't.
| alephnerd wrote:
| > The problem with KPMG et al. is that you hire a bunch of
| Machiavellian grads
|
| It's not that hard to get hired at KPMG. Going to a semi-
| decent public Engineering, Accounting, or Business undergrad
| in the US will guaruntee you a job there.
|
| It's just another audit shop. If we're being honest, almost
| every person here on HN has also lied about actually doing
| their Sexual Harassment HR training and SOC Compliance
| mandated security training and just clicking through then (or
| writing scripts to bypass the prompts).
|
| The "ethics" exam mentioned is just another one of those
| types of exams used as an HR CYA.
|
| Edit: the article is about the Netherlands practice. I don't
| know that much about their hiring practices and prestige in
| NL and mainland Europe.
| aidenn0 wrote:
| > It's just another audit shop. If we're being honest,
| almost every person here on HN has also lied about actually
| doing their Sexual Harassment HR training and SOC
| Compliance mandated security training and just clicking
| through then (or writing scripts to bypass the prompts).
|
| Don't skip those:
|
| 1. Not skipping doesn't take much longer than skipping.
|
| 2. Look for the scenarios that are "taken from actual
| cases" and look up those cases; great way to find some
| weird shit that has actually happened.
|
| 3. There's plenty of unintentional humor to be mined. The
| last time I did it, there was a "can you harass your own
| in-group" section that gave an example of a 1st-generation
| Punjabi-American harassing a Gujarati immigrant, raising
| the question of "Is it problematic that the author of this
| section considers those two individuals to be the same in-
| group?"
| axus wrote:
| The first time has some informative content, or at least
| some ironic clip-art to copy to your next presentation.
| The 3rd time and on it's just repetitive. Makes me
| jealous of the Microsoft employees from the other story
| about training videos.
| belter wrote:
| Don't imagine too hard...Your big four auditors at work...
|
| "Deloitte accountants "also cheated during exams" -
| https://www.dutchnews.nl/2023/10/deloitte-accountants-also-c...
|
| "Ernst & Young to Pay $100 Million Penalty for Employees
| Cheating on CPA Ethics Exams and Misleading Investigation" -
| https://www.sec.gov/news/press-release/2022-114
|
| "PwC fined over exam cheating involving 1,100 of its auditors"
| - https://news.ycombinator.com/item?id=30476547
|
| "PwC employees cheating on tests in China just cost the
| auditing firm $7 million in U.S. fines" -
| https://fortune.com/asia/2023/12/01/pwc-china-hong-kong-chea...
| mcmcmc wrote:
| If that's the biggest fine on record, not surprising that they
| keep breaking rules and trying to cover it up. KPMG cleared $35B
| last year, this is barely a slap on the wrist.
| epalm wrote:
| More than that, the article says 36B last fiscal year. 25M is
| less than 1 tenth of 1 percent.
| HenryBemis wrote:
| It would be worth checking 1-2 years from now how many
| clients they lost in the Netherlands. I suppose that an Audit
| Committee and an ExCo wouldn't like to have as "their
| auditor" someone who cheats, gets caught, gets fined.
| com wrote:
| It's irrelevant if you get "value" for the "services
| rendered" - and that's in the broad, so a little
| reputational negativity can be nicely countered by a more
| aggressive tax minimisation approach for example.
| arp242 wrote:
| And the people involved walk away whistling without
| consequences. It doesn't matter if the fine is 0.1%, 10%, or
| 50% of yearly revenue if you're not the one paying it.
| louwrentius wrote:
| I'm listening to "The Big Con" by Mariana Mazzucato and Rosie
| Collington. This book discusses the state of CONsultancies (EY,
| KPMG, McKinsey, PWC, Atos, and so on.
|
| Such a worthwhile read. Whatever you expect, it's worse.
| alephnerd wrote:
| KPMG is primarily an accounting and auditing firm. Same with
| PWC and EY.
|
| While these companies have recently acquired management
| consultancies, they tend to firewall them due to accounting
| firms lack of prestige.
| thundergolfer wrote:
| EY is banned in Germany from offering accounting services
| after this scandal:
| https://www.economist.com/business/2023/04/05/ey-gets-
| banned....
|
| The others have similar but I think less severe scandals in
| other countries.
| stijnveken wrote:
| I'm currently reading through "When McKinsey Comes to Town" in
| the same vein. I recommend it!
| javajosh wrote:
| They are moral-hazard-for-hire firms. Without their reputation
| they cannot function. Since govt uses them as much as biz govt
| has a disincentive to tarnish reputation.
| thundergolfer wrote:
| I found Mazzucato's _Entrepreneurial State_ argument highly
| valuable in this day and age. I 'll definitely check out this
| pod.
|
| Big4 consultancies are decently desirable graduate hirers in my
| country, despite paying low, demanding long hours, and
| providing low value training. That's not to mention the
| malpractice scandals.
|
| The fact that a graduate consultant gig is more respected than
| teaching roles and government positions shows the rot that's
| set in over the past 40 years.
| lencastre wrote:
| Kids playing management gone or something
| I_complete_me wrote:
| I use the acronym for when I am leaving the house: Keys, phone,
| money, glasses.
| Cheer2171 wrote:
| KPMG = Kids Playing Management Games
| shortsunblack wrote:
| Related shenanigans: KPMG is the leading green-washer
|
| https://www.icij.org/investigations/deforestation-inc/audit-...
| sithlord wrote:
| Really not sure why the firm is paying fines for this. Seems more
| like each individual should lose their license.
| badrabbit wrote:
| Because they use their consultants creds when selling services.
| cosmicvarion wrote:
| Why doesn't the PCAOB improve the exam process to make this sort
| of cheating extremely difficult if not impossible? Why are the
| trainings and examinations being run in house at these firms?
| guidedlight wrote:
| It's likely all online and all multiple choice.
|
| My (insert large financial company) has mandatory testing too,
| and there are no strict examination conditions. But nobody
| cheats.
|
| There is no real consequence if you fail, you just resit it
| again. At worst you might have to brute force it.
| xyst wrote:
| > Revenue Increase US$36.4 billion (2023)[2]
|
| [2] https://kpmg.com/xx/en/home/media/press-
| releases/2023/12/glo...
|
| Just the cost of doing business at this point. Until executives
| and people start going to jail or companies face much worse
| repercussions. Then this behavior will continue across the market
| or industry.
| wolverine876 wrote:
| The other missing cost is losing client business. How do
| clients see the fraud and still trust KPMG? Do you want to hire
| someone who can't even pass the accreditation test? An
| organization that tries to pass them off to you?
| Krasnol wrote:
| Where would they go to?
|
| Which one of the big four are "clean"?
| com wrote:
| And if you want an easy pass will you go for the cleanest
| or the least clean?
| Krasnol wrote:
| This is the way.
| hightrix wrote:
| I worked at a company that was purchased by KPMG a while ago.
| On announcement, the first thing I did was a few internet
| searches.
|
| I immediately started making plans to leave after seeing
| countless fraud cases against this company. I did not want to
| be associated with them.
|
| So, they at least lost one software developer because of
| their practices. Possibly others.
___________________________________________________________________
(page generated 2024-04-10 23:02 UTC)