Just the cost of doing business at this point. Until executives and people start going to jail or companies face much worse repercussions. Then this behavior will continue across the market or industry.
The other missing cost is losing client business. How do clients see the fraud and still trust KPMG? Do you want to hire someone who can't even pass the accreditation test? An organization that tries to pass them off to you?
You're starting with the assumption that ethics are a priority for clients. While certainly and extreme case, don't forget that Enron was happy with Arthur Andersen's auditing for quite a while...
If that’s the biggest fine on record, not surprising that they keep breaking rules and trying to cover it up. KPMG cleared $35B last year, this is barely a slap on the wrist.
And the people involved walk away whistling without consequences. It doesn't matter if the fine is 0.1%, 10%, or 50% of yearly revenue if you're not the one paying it.
It would be worth checking 1-2 years from now how many clients they lost in the Netherlands. I suppose that an Audit Committee and an ExCo wouldn't like to have as "their auditor" someone who cheats, gets caught, gets fined.
I’m listening to “The Big Con” by Mariana Mazzucato and Rosie Collington.
This book discusses the state of CONsultancies (EY, KPMG, McKinsey, PWC, Atos, and so on.
Such a worthwhile read. Whatever you expect, it’s worse.
I found Mazzucato's Entrepreneurial State argument highly valuable in this day and age. I'll definitely check out this pod.
Big4 consultancies are decently desirable graduate hirers in my country, despite paying low, demanding long hours, and providing low value training. That's not to mention the malpractice scandals.
The fact that a graduate consultant gig is more respected than teaching roles and government positions shows the rot that's set in over the past 40 years.
They are moral-hazard-for-hire firms. Without their reputation they cannot function. Since govt uses them as much as biz govt has a disincentive to tarnish reputation.
Why doesn't the PCAOB improve the exam process to make this sort of cheating extremely difficult if not impossible? Why are the trainings and examinations being run in house at these firms?
Readit News
https://www.icij.org/investigations/deforestation-inc/audit-...
https://www.abc.net.au/news/2023-06-05/pwc-pricewaterhouseco...
https://www.internationaltaxreview.com/article/2bxqngyds66en...
[2] https://kpmg.com/xx/en/home/media/press-releases/2023/12/glo...
Just the cost of doing business at this point. Until executives and people start going to jail or companies face much worse repercussions. Then this behavior will continue across the market or industry.
I immediately started making plans to leave after seeing countless fraud cases against this company. I did not want to be associated with them.
So, they at least lost one software developer because of their practices. Possibly others.
Which one of the big four are "clean"?
Such a worthwhile read. Whatever you expect, it’s worse.
While these companies have recently acquired management consultancies, they tend to firewall them due to accounting firms lack of prestige.
The others have similar but I think less severe scandals in other countries.
Big4 consultancies are decently desirable graduate hirers in my country, despite paying low, demanding long hours, and providing low value training. That's not to mention the malpractice scandals.
The fact that a graduate consultant gig is more respected than teaching roles and government positions shows the rot that's set in over the past 40 years.
My (insert large financial company) has mandatory testing too, and there are no strict examination conditions. But nobody cheats.
There is no real consequence if you fail, you just resit it again. At worst you might have to brute force it.