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SEC bars 2 KPMG auditors over bank loan loss reserves

Tammy Whitehouse | August 10, 2016

The Securities and Exchange Commission has barred two KPMG auditors from public company practice over their role as engagement partner and senior manager on the audit of a failed financial institution in the aftermath of the financial crisis.

The SEC says John Aesoph is barred for three years and Darren Bennett for two for “improper professional conduct” over their audit of 2008 financial statements of TierOne Corp, a holding company for TierOne bank. Their conduct, says the SEC, led to violations of auditing standards set by the Public Company Accounting Oversight Board, indicating a lack of competence to practice before the SEC.

Both Aesoph and Bennett remain with the firm, according to a spokesman, but KPMG had not other comment on the SEC action.

The case surrounds the allowance for loan and lease losses on TierOne’s balance sheet, a number that jumped drastically in 2008 because of...

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