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Senators press PCAOB for answers on KPMG audit of Wells Fargo

Tammy Whitehouse | May 1, 2017

KPMG and the Wells Fargo board of directors knew the company had fake accounts on the books, but KPMG didn’t flag it because the firm didn’t regard it as relevant to the financial statement audit, according to a letter from U.S. Senators to audit regulators asking how that could be possible.

Sen. Elizabeth Warren and Sen. Edward Markey, both Democrats from Massachusetts, have asked the Public Company Accounting Oversight Board to look into “three pieces of troubling new information” they learned in doing their own inquiry to the Wells Fargo scandal. They say:

  • KPMG “became aware of and analyzed in detail” the production of false accounts at Wells Fargo,
  • the Wells Fargo board knew of the activity, and KPMG knew the board knew, and
  • KPMG concluded the improper sales practices did not implicate the effectiveness of internal controls over financial reporting...
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