As you may recall in case you’re ever asked “What is the largest PCAOB fine ever handed out to a public accounting firm and for what?” at trivia night, KPMG Netherlands holds the title of Biggest Fine Ever from the PCAOB ($25 million) related to a bit of a cheating problem that led to their regulator (and ours) dinging dang near every other large firm for the same thing. Our earlier coverage in case you’re out of that particular loop:
Now, KPMG has completed their mandatory contrition period with the Netherlands Authority for the Financial Markets (AFM) just as BDO Netherlands has received a fine for their cheating issues. Reports NL Times:
Accounting and consultancy firm BDO has been fined 765,000 euros by the Netherlands Authority for the Financial Markets (AFM) over exam fraud. Employees shared answers or collaborated on exams, and the firm did not notice or prevent it.
The AFM had previously launched investigations into several accounting firms, including BDO. The regulator found that BDO lacked clear policies, procedures, and safeguards to guarantee the integrity of exams, and concluded that the firm failed in this responsibility.
BDO’s own investigation found that hundreds of employees engaged in exam fraud between 2018 and 2023. The exams included mandatory tests to ensure auditors maintained the necessary knowledge and skills for certification. Fraud took place across all levels of the firm.
Reminder here that when they say “exam fraud” they generally mean “overworked auditors sharing answers amongst themselves on internal training.” Ever since EY got hammered with a $100 million from the SEC the firms and the regulators who fine them have been extra sensitive about this thing that happens at pretty much every firm pretty much all the time. To be clear, the EY thing went above and beyond as they cheated on the ethics exam you take for CPA licensure and CPE, among the usual crime of slipping your colleague an answer sheet (or, in PwC Canada’s case, sharing drives with all the answers because they thought that was the kind of collaborative culture the firm hoped to cultivate in its people). Not to excuse this behavior, just putting it in context for anyone who hasn’t been required to squeeze WBLs into their busy schedule of billable hours and crying in the bathroom.
No word on whether or not the PCAOB will go after Dutch BDO for this too. Maybe.