Charges of fraud and conspiracy around audit regulation have not only rocked the audit profession. They’ve also shaken trust in the integrity of the regulatory process, leaving audit committees with an even bigger job to vet audit firms.
The U.S. Department of Justice is pursuing criminal charges against five former audit leaders at KPMG, two of whom worked previously for the Public Company Accounting Oversight Board, plus one former inspections staff member at the PCAOB. The Securities and Exchange Commission is pursuing civil charges as well. Five of the six individuals are contesting the allegations, while one has settled and is cooperating with authorities.
