Vancouver and TransLink Get What They Pay For!
Some interesting insight into KPMG, who are not transit consultants, who did a $110,000.00 transit study supporting a subway under Broadway. I guess the city of Vancouver and TransLink got what they paid for.
KPMG: A History of AbettingAi??Fraud
While KPMG has avoided the fate of fellow auditing giant Arthur Anderson, it has primarily done so through quick settlements that prevent its numerous cases of fraud from ever reaching court. Though most of the focus of the financial crisis of 2008 has been placed upon the nation’s big financial institutions such as Goldman Sachs, J.P. Morgan and Citibank, more evidence is arising over the role of auditing firms throughout the subprime loan disaster. KPMG was the first “big-four” firm to be hit with a lawsuit, accused in 2009 of “grossly negligent audits” of home loan provider New Century Financial Corp
In 2005, KPGM settled for $22.5 million with SEC for allowing Xerox to manipulate its accounting practices to close a $3 billion gap between actual and stated earnings between 1997 and 2000. During the time, KPGM explicitly claimed that the copy company had followed established auditing rules and truthfully reported its earnings. The auditing giant would pay a later settlement of $80 million to Xerox investors in 2008.
Conflicts of interest often arise when the same accountants both audit and advise a client at the same time. Often, poor quarterly numbers are overlooked or lied about in order to give the client/audited company a stronger image in the eyes of investors. Between 2001 and 2003, KPMG performed this dual role for Fannie Mae, and was accused by investors of the mortgage giant of 17 counts of “negligance and breach of contract” in November 2006.
KPMG recently settled with the SEC for $24 million over its alleged role in various misstatements and omissions regarding the lending policies of Countrywide Financial. The giant’s failures lead to investors being exposed to undetected risk.
In early 2005, eight top executives at KPMG agreed to pay $456 million in penalties to the U.S. Department of Justice for creating illegal tax shelters that helped rich clients avoid paying over $2.5 billion in taxes. Prosecutors and company officials agreed to a Deferred Prosecution Agreement, in which prosecutors would agree not to seek a grand-jury indictment as long as the company committed no further wrong-doing.
- KPMG executives agree to massive penalities for roles in overshore tax havens
- Investors sue KPMG in response to the tax fraud
http://www.cheatingculture.com/accounting-fraud/2011/1/6/kpmg-a-history-of-abetting-fraud.html
Thursday, January 6, 2011
