In 2017, five accountants at KPMG, including a former managing partner for audit quality, were charged with misappropriating and using information from the Public Company Accounting Oversight Board (PCAOB) to improve the firm’s performance in PCAOB inspections. Also charged was a KPMG employee who had previously been an inspections leader at the PCAOB. All six were fired. As of this writing, two have been convicted at trial, three have pleaded guilty, and one is still pending trial. Later, in 2019, several auditors at KPMG were found to have cheated on the firm’s internal tests regarding mandatory ethics, integrity, and compliance training. Senior partners shared answers with other partners and staff to help them pass the tests. In addition, one partner and other auditors at the firm manipulated the system to lower the passing score. Nearly thirty auditors engaged in this conduct on four or more occasions.

Questions

1. If you were recruiting with KPMG, how might these scandals affect your view of the firm? What questions would you have for recruiters or partners with whom you interview? Explain.

2. Which do you think is the more troubling scandal? How are these scandals similar? How are they different? Explain.

3. How different, if at all, is this behavior from cheating on college exams to raise grades and GPAs? Does successful cheating make all future representations of one’s college accomplishments on resumes and job applications fraudulent? Explain.