Search Results for: KPMG

KPMG Bulks Up Management Team

New York-based Big 4 firm KPMG announced several new additions to its management team:

  • Greg Engel is succeeding Jeffrey LeSage as vice chair of tax.
  • Scott Flynn is succeeding Frank Casal as vice chair of audit.
  • Tandra Jackson has been named vice chair of growth and strategy.
  • Will Williams is succeeding COO Laura Newinski as vice chair of operations.

The above individuals will join four leaders who will continue in their roles on the management team: Darren Burton as vice chair of HR, Lisa Madden as vice chair of risk management, Tonya Robinson as vice chair and general counsel – legal, regulatory and compliance – and Claudia Saran as vice chair of culture.

“Our management team will harness the talents and capabilities of the entire firm to empower our clients and our people to confidently meet today’s challenges and thrive in the future,” says chairman and CEO Paul Knopp. “As we begin to write a new chapter for our firm, one that is built on integrity, growth and execution, we will differentiate ourselves in the market by the quality of our people and our services, and the strength of our culture and values.”

More news from KPMG

SEC Charges Three Former KPMG Partners

The SEC announced settled charges against three former KPMG audit partners for improperly sharing answers to internal training exams and for subsequent wrongdoing during an investigation at the firm.

The orders against Timothy Daly, Michael Bellach and John Donovan find that each engaged in misconduct in connection with exams KPMG administered to test whether its audit professionals understood certain accounting and auditing principles. The three also subsequently lied about and/or attempted to cover up their actions during an investigation of the matter, the SEC asserts.

Without admitting or denying the findings, Daly, Bellach and Donovan agreed to be suspended from appearing or practicing before the SEC as accountants. This means they will not participate in the financial reporting or audits of public companies. The three have the right to apply for reinstatement after three years, two years and one year, respectively.

“Audit professionals play a critical role in the integrity of the financial reporting process and the protection of investors,” says Steven Peikin, co-director of the SEC’s Division of Enforcement. “These actions reflect our commitment to hold these gatekeepers responsible for breaches of their professional obligations.”

KPMG Creates Framework for Reopening Businesses

Looking to help organizations implement approaches to bring employees back to workplaces, Big 4 firm KPMG has introduced a framework that includes a technology-enabled and data-driven assessment of COVID-19-related impacts within a community, as well as an evaluation of the challenges that individuals and their employers may encounter as they re-enter the workplace.

The framework assesses risk in local markets, addresses government and regulatory considerations, and provides a technology component to help executives make informed decisions based on an approach that encompasses the following five components:

  • A risk-based framework powered by analytic tools that calculate both community threat levels and individual risks associated with contracting and transmitting the coronavirus
  • Workforce and workplace considerations, including social distancing policies and employment and privacy laws as they relate to self-certification versus third-party verification
  • A partnering process services and supplies needed to protect employees, such as diagnostic testing, temperature checks and workplace sanitation
  • Technology enablement / employee logistics related to conducting contact tracing of employees, monitoring employees for infection and establishing workplace-related processes, such as establishing entry, movement and exit controls, and enforcing social distancing
  • Program governance

“The introduction to the market of these capabilities will give organizations a technology-enabled, risk-based decision framework to leverage as they shape their strategies for returning their employees to offices and make other policy-based decisions,” says Laura Newinski, KPMG vice chair of operations and deputy chair-elect.

More news from KPMG

KPMG Survey: Two-Thirds of U.S. Workers Say They’ve Done Better Work Since COVID

Big 4 firm KPMG, in a recent poll of U.S. workers, found that 64% say their quality of work has improved, 70% say collaboration is better and 82% say their team has adapted effectively to the COVID-19 disruptions.

“There is a mutual resiliency and commitment between organizations and their employees that’s resulting in improved connectivity and productivity,” says Paul Lipinski, KPMG’s human capital advisory leader. “During times of uncertainty, like now, it is more important than ever to make sure employees not only understand their role and responsibilities, but also that they feel recognized and appreciated for what they do.”

More positive results – 59% said they had adequate resources to do their job remotely, and 87% reported that their team is effectively using technology to communicate.

American workers also indicated worries about the future – 63% about reduced pay, 57% about job loss and 56% about the future of their industry.

The survey results say that companies that invest in quality relationships with their employees and effectively communicate their value will witness better collaboration and productivity among their workforce than those that do not. Of the 75% of respondents who indicated their companies made them feel valued, 60% reported an improved level of productivity (versus 37% who did not). Respondents who felt valued also indicated better team collaboration (75% versus those who did not 55%).

Those in management roles reported having a harder time adapting than non-management respondents, indicating that their job is more demanding now (67% versus 50%), work/life balance is more difficult (63% versus 47%), and work is overwhelming (55% versus 39%).

KPMG conducted a pulse survey of 1,000 workers in the U.S. in April 2020 to gauge how employees were adjusting to COVID-19 work-from-home orders. The sample included a mix of full-time and part-time workers from a variety of industries, company sizes and management levels. To see the full results, view the KPMG American Worker Pulse Survey.

More news from KPMG

Amid Ongoing Pandemic, KPMG Donates to Nonprofit Organizations

As the COVID-19 pandemic continues to impact communities across the country and around the world, New York-based KPMG has pledged over $2 million to support a variety of nonprofit organizations in their work amid the crisis.

Through its KPMG U.S. Foundation, the firm has earmarked $1 million in charitable funds for the KPMG Disaster Relief Fund COVID-19 campaign, which will aid 501c-3 organizations across the U.S. that are focused on health, wellness and lifelong learning activities. In addition, donations totaling $400,000 will be made in the form of community impact grants to charitable nonprofit organizations actively supported by KPMG employees, and another $130,000 in grants has already been disbursed to nonprofits with which KPMG already has a relationship, including the American Heart Association, the Boys & Girls Clubs of America, Junior Achievement and the National Multiple Sclerosis Society.

“We remain deeply committed to serving and supporting our communities during this challenge our world is facing,” KPMG Chairman and CEO Lynne Doughtie says. “I’m also proud of our many partners and professionals across the country who are stepping up to help their local communities at this time in so many different ways.”

More news from KPMG

Scandals Force KPMG, PwC to Repair Reputations

Two Big 4 firms are updating audit practices, adding technology and taking other steps to boost their reputations in light of major scandals last year.

KPMG and PwC have taken similar steps to address ethics lapses that resulted in millions of dollars in SEC fines, Bloomberg reported.

The changes are seen by some as improved assurance that financial reports are reliable, but critics believe a fundamental conflict still exists – the need to keep valuable audit clients while consolidation reduces the number of those clients.

KPMG, reeling from a so-called “steal the exam” scandal in which senior staff conspired with the PCAOB, made changes detailed in its most recent audit quality report. The scandal resulted in prison time for former staffers and a record $50 million settlement for extensive misconduct, as determined by the SEC. KPMG worked to find out which of its clients would be reviewed by PCAOB.

The reforms include:

  • Overhauling the audit leadership team
  • Moving internal inspections out of the audit practice
  • Revising performance evaluations and compensation
  • Updating audit methods
  • Introducing a cloud-based audit system that can examine a far larger amount of data
  • Increasing partner supervision and support
  • Improving methods of assessing risk, internal controls and estimates

KPMG is also exploring partner tenure, staffing levels and even the order in which the work is handled, Bloomberg reported.

“We know there’s really no silver bullet here,” says Jackie Daylor, KPMG’s national MP for audit quality and professional practice. She says she hopes the firm can be more proactive in providing extra resources or oversight.

At the same time, competitor PwC is addressing problems with following its conflict of interest rules. The firm agreed to a $7.9 million SEC settlement last year after providing services to audit clients that were not allowed, and for failing to inform the clients’ audit committees about the work.

The reforms include:

  • Requiring independence training for staff and partners
  • Adding reviews of contracts or proposals
  • Improving communications with audit committees and adding independence coaching before or during an audit
  • Adding an independent director to the firm’s governance board
  • Forming an advisory group on culture, risk management and other areas that impact audit quality.

KMPG followed suit on some of the changes, Bloomberg reported, adding independent directors to its board, hiring a chief culture officer and re-evaluating its corporate values.

Barbara Roper, director of investor protection for the Consumer Federation of America, says auditors must stand up to management of the companies they are auditing. The risk is losing that client, but it’s a risk firms must take.

Roper said they should be transparent about how they measure audit quality – from inspection deficiencies to independence to skepticism – and use those metrics when promoting and compensating senior leaders.

“It’s got to be more than lip service.”

More news from KPMG

More news from PwC

KPMG Names Rick Arpin OMP in Las Vegas

Rick Arpin

Rick Arpin has been named OMP of KPMG’s Las Vegas office and is now responsible for its strategic direction and market growth.

“Rick Arpin brings more than 25 years of strong leadership and experience providing audit services to public and private global corporations in a broad array of sectors, including gaming, hospitality, entertainment, retail and sports,” says Mark Hutchins, KPMG’s Pacific Southwest regional MP. “Rick’s deep commitment to serving our clients, developing our people and making a difference in the Las Vegas community makes him the perfect fit for the managing partner role.”

“I am honored and I look forward to working with our tremendous team of partners and professionals across the firm to help our clients adapt and thrive in today’s environment, whether driven by economic forces, changing customer patterns, disruptive technologies or the rapidly evolving regulatory environment,” says Arpin.

Arpin arrives at KPMG from NRT Technology, where he served as senior vice president of its interactive division. Prior to that, Arpin spent 16 years with MGM Resorts International, holding several key leadership roles.

More news from KPMG

KPMG Selects Paul Knopp as Next CEO

Paul Knopp

KPMG has announced that Paul Knopp will serve as the Big 4 firm’s next chair and CEO for a five-year term starting July 1, while Laura Newinski has been elected deputy chair.

Knopp, a 36-year veteran of the firm, leads several of the firm’s most complex global audit engagements. Newinski, vice chair of operations, has held several leadership roles in the tax practice of the New York-based firm, which reports FY18 net revenues of more than $9.46 billion. The KPMG partnership ratified the election of Knopp and Newinski on March 2.

Laura Newinski

Knopp and Newinski will succeed Lynne Doughtie and P. Scott Ozanus, who have served since 2015 as U.S. chair and CEO and deputy chair, respectively. Both will retire later this year. Doughtie previously announced that she would not seek a second term.

“I have had the pleasure of working closely with Paul for many years, and I can attest to his values-based leadership,” Doughtie says in a statement. “He is a thoughtful, confident and decisive leader who inspires people at all levels. Laura is a proven leader who has a long and successful track record driving operational excellence, transformative change and growth for the firm.”

Knopp says it is a pivotal time in the firm’s history. “We have a tremendous opportunity to bring value to our various stakeholders through our one-firm approach during these transformative times.”

Knopp has served leading global companies in the manufacturing, life sciences, transportation, professional services and technology industries. He has served on KPMG’s board of directors, including serving as lead director.

Newinski joined KPMG in 1988. She is responsible for technology and financial matters for the firm and oversees its operations. She also serves as COO for KPMG’s Americas region. Prior to her current role, Newinski served as the national MP of KPMG’s U.S. tax practice and also held other regional leadership roles for the practice.

“The best part about working at KPMG is our remarkable people,” Newinski says. “Our people serve our clients with excellence, support one another and their communities, and find solutions that have impact.”

More news from KPMG

Ex-KPMG Partner, Inspector Suspended by SEC

The SEC suspended a former KPMG audit partner and a former staffer of the PCAOB after a jury last year found them each guilty of wire fraud charges for interfering with the audit regulator’s oversight, Bloomberg reported.

David Middendorf, the former national MP for audit quality at KPMG, and Jeffrey Wada, who was an inspections leader for the PCAOB, may no longer appear or practice before the SEC, the agency announced.

Middendorf was accused of recruiting PCAOB staffers to provide the firm with information about which audits they would be examining. He was sentenced to a year and a day in prison and three years of supervised release. Manhattan U.S. Attorney Geoffrey Berman, during the sentencing, stated Middendorf was “at the top of a chain of corruption that threatened to corrupt KPMG and the PCAOB’s inspections process,” Compliance Week reported.

Wada was accused of funneling confidential information about the board’s surprise inspections to Cynthia Holder, another PCAOB staffer who had gone to work at KPMG. He was sentenced to nine months in prison.

In a related action, the SEC in November 2019 barred Holder from practicing as an accountant before the SEC. Holder was sentenced to eight months in prison and two years of supervised release for her role in the scandal.

KPMG agreed to pay a $50 million penalty to settle allegations that it altered past audit work after receiving that secret information.

KPMG UK’s Most Senior Female Partner Quits

Melanie Richards

After 20 years at Big 4 firm KPMG, UK deputy chair Melanie Richards will leave in September following a difficult two years during which the firm worked to recover from a series of audit and conduct scandals, the Financial Times reported.

The London newspaper cited an anonymous source to report that Richards told UK Chair Bill Michael last September that she wants to serve as a non-executive director at a number of companies. UK rules and KPMG policy require a departing auditor to wait two years before joining the board of any listed company that their firm audits.

“Melanie is relentless in her campaigning for equality in the workplace and is an inspirational leader, both within our firm and across UK business as a whole,” Michael says in a statement. “Wherever she chooses to go next, they will be lucky to have her broad array of skills, experience, energy and counsel — which have been invaluable to me as chairman.”

Richards, who joined the firm in 2000, leads KPMG’s efforts to improve its diversity and inclusion and ran its senior women’s network, but she has been criticized for failing to close its gender pay gap of 28% last year.

KPMG has faced a series of setbacks in the last two years over the quality of its audits in the wake of the collapse of UK outsourcing firm Carillion.

More news from KPMG