KPMG fined £20m for Dutch auditors caught cheating on exams.

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  • KPMG fined $25m by US audit regulator for exam cheating in the Netherlands.
  • Former head of audit assurance at KPMG Netherlands permanently barred from working as an auditor.

Key Elements:

KPMG faced its largest ever fine of $25m for exam cheating by staff and partners in the Netherlands, with the former head of audit assurance being permanently barred from working as an auditor. The cheating involved hundreds of Dutch staff, partners, and senior leadership, as well as offshore sharing of answers with an Indian arm of KPMG. The improper behavior persisted for years, despite previous fines for exam cheating in 2019 and 2022.

The cheating was exposed by a whistleblower in July 2022, leading to investigations by the PCAOB and the Dutch regulator. It was found that KPMG leadership, including the CEO, were aware of the misconduct by the former head of audit assurance, but continued to mislead authorities about their knowledge. The improper answer sharing extended to partners and senior leaders, indicating a failure in promoting an ethical culture within KPMG.

The PCAOB has imposed sanctions on nine registered firms for similar quality control deficiencies related to internal training exams. KPMG has agreed to review and improve its quality control policies and procedures to prevent future misconduct. The Dutch regulator has also imposed enhanced supervision measures to prevent recurrences.

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