KPMG Fined $25Million Over Exam Cheating Scandal

KPMG Netherlands has been fined $25 million by the US regulator Public Company Accounting Oversight Board (PCAOB) for widespread cheating during compulsory exams and misleading regulators in the US and the Netherlands. 


“The PCAOB found that widespread improper answer sharing occurred at the firm over a five-year period and that the firm made multiple misrepresentations to the PCAOB about its knowledge of the misconduct,” the agency said in a statement.


According to Dutch News, the company’s former boss Marc Hogeboom has also been personally fined $150,000 and banned for life from any involvement in US accountancy controls or checks that fall under the PCAOB’s remit.

“The PCAOB will not tolerate cheating nor any other unethical behaviour, period,” said PCAOB chairwoman Erica Williams. “Impaired ethics threaten the investor confidence our system relies on, and the PCAOB will take action to hold firms accountable when they fail to enforce a culture of honesty and integrity.”

The exams and courses related to a variety of topics, including US auditing standards, professional ethics, and independence and the cheating reached as far as partners and senior firm leaders, including Hogeboom (at the time the firm’s head of assurance), the US regulator said.

But despite being aware answer sharing had occurred in June 2020, KPMG Netherlands “took virtually no steps to investigate potential answer sharing among its personnel until a whistleblower reported such misconduct in July 2022.”


Shortly afterwards the company then confirmed at least 500 workers at KPMG in the Netherlands had cheated during the compulsory exams that accountants are required to take.

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KPMG also imposed sanctions on an unknown number of employees, and “a handful” were fired following an internal investigation into the claims that staff had swapped answers to the tests. Hogeboom also stood down.


The scandal led financial regulator AFM to order all the big accountancy firms to carry out an internal investigation into possible cheating. In October, Deloitte Nederland said some of its workers too had been swapping answers.


EY, PwC, Mazars and BDO are also investigating the situation at their practices but have not yet said anything about their findings.


The AFM said it is stepping up its supervision of KPMG Nederland which will include remediation, a root cause analysis, and establishing policies and procedures to prevent inappropriate sharing of answers from happening again.



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