UPDATE 1-US accounting watchdog hits KPMG affiliate with record penalty over exam cheating

(Updates with background, details)

NEW YORK, April 10 (Reuters) – The U.S. accounting watchdog on Wednesday said it has hit KPMG Netherlands with a $25 million civil penalty, a record for the regulator, in response to “egregious” and widespread exam cheating at the foreign affiliate of the major audit firm.

The Public Company Accounting Oversight Board cited widespread improper answer sharing at the KPMG affiliate, as well as “multiple misrepresentations” to the watchdog about knowledge of the misconduct.

The widespread and “egregious” nature of the answer sharing for exams from 2017-2022 prompted the large fine, which dwarfed the PCAOB’s previous record of $8 million, PCAOB Chair Erica Williams said.

A spokesperson for KPMG did not respond immediately.

Wednesday’s enforcement action also marked the first time the PCAOB has sanctioned an individual in connection with exam cheating, chair Erica Williams told reporters. The PCAOB permanently barred the firm’s former head of assurance from the industry, the PCAOB said.

(Reporting by Chris Prentice, Editing by Franklin Paul)

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