KPMG – What Did They Know About Siemens?
I called this one more than a month ago! Glad to see the Wall Slow Journal is finally catching up…Would the WSJ have sat on the story so KPMG could enjoy, for a little while longer, the “oral pleasure” they received the week before?
KPMG Germany’s Failure to Spot Siemens Problems Raises Questions
By MIKE ESTERL in Frankfurt, DAVID CRAWFORD in Berlin and DAVID REILLY in New York
February 24, 2007; Page B3
German prosecutors investigating alleged bribery at Siemens AG are looking at whether its longtime auditor, KPMG’s German affiliate, ignored questionable payments on the conglomerate’s books, a person familiar with the matter said.
The scrutiny was prompted by allegations by two Siemens executives under investigation in the probe. Their claims raise questions about whether KPMG Germany could have told authorities and investors that the Munich-based company’s systems for preventing accounting mistakes and fraud were flawed before news of the investigation surfaced late last year…
KPMG Germany is one of the most important parts of KPMG’s global network. Its German arm audits four of KPMG’s 10 biggest clients by fees, according to accounting research firm AuditAnalytics Inc. In the fiscal year ended Sept. 30, Siemens paid KPMG €87.5 million in total fees world-wide.
At least two veteran Siemens executives jailed late last year as part of the criminal probe have alleged to prosecutors that KPMG Germany detected questionable payments in recent years, but chose to ignore them.
UNPLUMBED DEPTHS
• The Situation: The German affiliate of KPMG is on the hot seat for its auditing work of Siemens AG.
• Background: Despite police probes of money laundering, KPMG gave Siemens books an OK. After more inquiries by authorities, it said something was amiss.
• What Now: The company faces questions over why it didn’t dig deep enough into Siemens’s accounting.
Trackbacks & Pingbacks
[…] internal investigations of potential fraud or illegal acts by top executives. I wrote about it atSiemens, subject of the largest ever FCPA settlement in history. KPMG, their auditor, got […]
[…] internal investigations of potential fraud or illegal acts by top executives. I wrote about it at Siemens, subject of the largest ever FCPA settlement in history. KPMG, their auditor, got […]
[…] internal investigations of potential fraud or illegal acts by top executives. I wrote about it at Siemens, subject of the largest ever FCPA settlement in history. KPMG, their auditor, got […]
[…] internal investigations of potential fraud or illegal acts by top executives. I wrote about it at Siemens, subject of the largest ever FCPA settlement in history. KPMG, their auditor, got […]
[…] It was inevitable that it would come to this. Will KPMG now resign, since they are no longer independent or will someone have to fire them? […]
[…] I started at KPMG in 1993. I remember him as one of the good guys… He’s also the guy the WSJ credits with saving the firm from ruin in the tax shelter case. He’s got his work cut out for him. Best […]
[…] But just as I was about to give up looking for a good story for Wednesday’s post, I came across this piece of cotton candy fluff. I usually don’t show the journalist’s name when I reprint segments of the story. You can look that up with the link. But when a journalist does an exceptionally poor, an exceptionally stupid, or an exceptionally good job of covering the story, I want you to know right away who it is. In this case, this is not the first time David Reilly has disapponted me. […]
[…] It was inevitable that it would come to this. Will KPMG now resign, since they are no longer independent or will someone have to fire them? […]
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