backOn March 11, 2025, the PCAOB announced settled disciplinary orders against nine firms from KPMG’s global network for violations of PCAOB rules and standards, including quality control standards. The Board alleged that each firm violated PCAOB Rule 3211, Auditor Reporting of Certain Audit Participants, by failing to accurately disclose on PCAOB Form AP the participation of other accounting firms in firm audits. Additionally, the Board alleged that each firm violated quality control standards related to (1) meeting professional standards, regulatory requirements, and each respective firm’s standards of quality; and (2) monitoring procedures, by failing to establish appropriate policies and procedures to provide reasonable assurance that the firms’ respective audit professionals would accurately identify in required Form AP filings the accounting firms that participated in firm audits and their percentage of participation.
The Board further alleged that four firms (KPMG Australia, KPMG Brazil, KPMG Canada, and KPMG UK) violated AS 1301, Communications with Audit Committees, by failing to communicate to audit committees the name, location, and planned responsibilities of one or more other accounting firms. Additionally, the Board alleged that KPMG Brazil violated PCAOB Rule 2200, Annual Report, by failing to report on Form 2 certain audit reports or consents that it had issued.
Without admitting or denying the Board’s findings, each firm consented to the PCAOB’s order censuring the firm, with $3.375 million in total civil money penalties imposed across all nine firms. Each firm also consented to undertake certain remedial actions designed to improve firm quality control policies and procedures in the areas where failures occurred.
The settled orders are available at the following links: KPMG Brazil, KPMG Canada, KPMG Italy, KPMG Israel, KPMG UK, KPMG Mexico, KPMG Korea, KPMG Switzerland, and KPMG Australia.