KPMG Netherlands has reached a settlement with the U.S. regulator PCAOB (Public Company Accounting Oversight Board) concerning the investigation into answer-sharing and receives a penalty of 25 million US Dollars.
This settlement is the conclusion of an investigation into the sharing of answers to mandatory training tests. The investigation revealed that from at least October 2017, more than five hundred people were involved in some form of improper conduct, including sending or receiving answers to training tests and providing or receiving assistance in taking such tests. The settlement reflects that KPMG Netherlands violated a number of PCAOB rules.
Apologies
Stephanie Hottenhuis CEO van KPMG Netherlands: “The conclusions are damning, and the penalty is a reflection of that. I deeply regret that this misconduct happened in our firm. Our clients and stakeholders deserve our apologies. They count on our quality and integrity as this is our role in society, with trust as our license to operate.”
Sanctions
Following the investigation, people, at all levels of seniority, who participated in answer sharing have been sanctioned. Some of them had to leave the firm. After the second whistleblower notification, a.o. with regard to a member of the Board of Management, all members of the Board of Management and Supervisory Board were subject to additional personal investigation into involvement in answer sharing. The investigation led to the departure of the former Head of Assurance as partner of the firm. The chairman of the Supervisory Board resigned after admitting that he had received assistance in completing a training test.
Remedial measures
KPMG Netherlands has now taken several targeted remedial measures and is working on further improvements in the areas of policies and procedures relating to the assessment of mandatory training and the internal culture. This remediation process is under the enhanced supervision of the AFM (The Dutch Authority of the Financial Markets). The Supervisory Board of KPMG Netherlands will also monitor this closely.
Learnings
Hottenhuis: “It is a hard lesson, and we are learning from this. We have reviewed our approach to mandatory testing and made meaningful changes to our learning and development programs. We also have implemented controls to monitor whether training tests are being completed appropriately and will continue to do so going forward. We will continuously improve, and we must ensure we do our training sessions appropriately, sustainably.”
Going forward, KPMG Netherlands is committed to holding each other accountable and encouraging people to speak up on improper behaviors. Hottenhuis: “This is a significant failure in our duty to serve the public interest. Trust is essential in our business, and we must learn from this and make a change in our culture and behavior. Additional programs on ethical decision making are being rolled out for all teams. This is a critical topic that will remain on the agenda of all leaders and for everyone of our firm.”
The Dutch version of this press release can be found here.
De Nederlandse versie van dit persbericht kunt u hier vinden.
