The Big Four firms count on the accounting professors at major, and minor, universities to keep their recruiting pipeline full and carry the flame for the firms with future graduates. Grant money from the firms’ foundations and its industry trade associations, the AICPA and its affiliate the Center for Audit Quality, also trickle down to the American Accounting Association, professors and Ph.D. students who go with the flow.
So here’s how KPMG Chairman John Veihmeyer explained Scott London’s inside trading and the firm’s response to those important stops in the audit industry supply chain.
From: “John Veihmeyer (Chairman)” <email@example.com>
Date: April 22, 2013, 4:24:30 PM CDT
To: Undisclosed recipients:;
Subject: A Message from KPMG Chairman and CEO John VeihmeyerDear Valued Faculty Member:I want to update you on a matter of importance to KPMG and our profession as a whole. I’m sure by now you are aware of the actions of our former partner and audit leader of our Los Angeles business unit, who provided non-public client information to a third party, who then used that information in stock trades.This appalling situation was the result of a single rogue individual, acting contrary to everything that we stand for as a firm. Once we learned of his unlawful actions, we immediately separated him from the firm, unequivocally condemned his actions, and expressed our deep regret for the impact that his violations of trust and the law have had on our clients and our people. In addition, recognizing that our independence was impaired, we swiftly made the decision to resign as the auditor of two clients for which this individual served as lead partner.As part of KPMG’s comprehensive Ethics and Compliance Program, we have a rigorous system in place to prevent insider trading, including policies, processes, training, monitoring, and enforcement. This individual violated our policies, betrayed the trust of clients as well as colleagues, and acted with deliberate disregard for our long-standing culture of professionalism and integrity that guides the actions of all of our people.We recognize that this is an important time for our profession. And as Chairman and CEO of KPMG, I want you and your students to know that we are committed to handling this unfortunate matter with the utmost degree of professionalism, integrity, urgency, and transparency.I believe—and I hope you agree—that the true measure of any firm is not a single individual’s unethical actions, but rather how the organization responds when it becomes aware of behavior that is wholly inconsistent with the culture and values of the firm. We believe that by responding quickly and transparently to this matter, we are demonstrating the professionalism and integrity that is the essence of KPMG. Our clients and our people have been fully supportive, and we remain fully committed to providing high-quality service to our clients, and remaining an employer of choice for our people.Our firm has grown nearly 20 percent in the past two years, and is positioned for solid growth in 2013. As proud as we are of our growth, we are prouder still of the enthusiasm our employees have about building careers at KPMG. In our most recent employee work environment survey, four out of five of our employees and 93 percent of first-year associates told us that KPMG is a great place to build a career. And we look forward to welcoming your students as interns this summer or as full-time hires this fall.Thanks again for all you do to support our people and our firm. And please don’t hesitate to reach out if you have any questions or concerns that you’d like to discuss.Kind regards,John