Washington, Jan 25: Auditing company KPMG will pay $8.2 million to settle civil charges that it violated rules by providing non-audit services from 2007 to 2011, authorities said.
KPMG broke auditor independence rules various times by providing prohibited non-audit services such as book-keeping and expert services to affiliates of three audit clients from 2007 to 2011, said the Securities and Exchange Commission (SEC), reported Xinhua.
Some KPMG personnel also owned stock in companies or affiliates of companies that were KPMG audit clients, further violating auditor independence rules, said the regulator.
“Auditors are vital to the integrity of financial reporting, and the mere appearance that they may be conflicted in exercising independent judgement can undermine public confidence in our markets,” said John T. Dugan, associate director for enforcement in the SEC’s Boston Regional Office.
“The accounting profession must carefully consider whether engagements are consistent with the requirements to be independent of audit clients,” said Paul A. Beswick, the SEC’s chief accountant.
“Resolving questions about permissibility of non-audit services is always best done before commencing the services,” Beswick said.