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US accounting firm KPMG violated rules aimed at maintaining auditors’ independence from their clients and will pay Rs 8.2 million to settle the charges, regulators said on Saturday.
The Securities and Exchange Commission (SEC) found KPMG broke the rules by providing prohibited non-audit services such as bookkeeping, corporate finance and expert services to affiliates of companies which were getting their books auditing by it.
In addition, SEC said in a statement, some KPMG personnel also owned stock in companies or affiliates of companies that were KPMG audit clients, in a further violation of the rules designed to ensure auditors maintain objectivity and impartiality in reviewing a client's books. KPMG has not admitted to or denied SEC’s findings but will pay $5.3 million in disgorgement of fees received from the three clients plus interest of $1.2 million and a $1.8 million penalty, SEC said. SEC did not identify the clients.
The regulator also said the company pledged internal changes to enhance compliance with auditor independence rules and to hire an independent consultant to monitor the changes.
KPMG, in an emailed statement to AFP, said it was "fully committed" to ensuring its independence as an auditor.
"In the years since the events discussed in this SEC action, KPMG has implemented internal changes that are designed to ensure its ability to comply with restrictions on providing non-audit services to SEC audit clients and/or their affiliates," the company said.
