The Securities and Exchange Commission (SEC) filed administrative proceedings against three KPMG audit partners for their wrongdoings related to internal training exams at the firm.
The former KPMG audit partners facing the Commission’s enforcement actions are Michael Bellach, Timothy Daly, and John Donovan.
KPMG requires its audit professionals to complete a minimum number of continuing professional education (CPE) courses relevant to their work. The firm administers its own set of online training programs to help its audit professionals satisfy its CPE requirements.
Its audit professionals have three opportunities to pass the internal training exams. The firm prohibits any of its accounting professionals to conduct audit work if they fail the exams after three attempts. Accounting professionals understood that failing an exam could lead to a reduction of their compensation.
According to the SEC, Bellach, Daly, and Donovan improperly shared answers to KPMG’s internal training exams in October 2018. They also committed wrongdoing when the firm conducted an investigation into potential cheating on its internal training exams.
