Financial Accounting News

SEC Bars Ex-Audit Regulator for Role in KPMG Cheating Scandal

Nov. 29, 2019, 10:08 PM

The SEC barred Cynthia Holder, a former Public Company Accounting Oversight Board and KPMG LLP employee, from appearing before the commission as an accountant.

The sanction, outlined in a Nov. 29 administrative proceeding, means Holder can’t sign public company audits. It doesn’t specify how long she is barred from doing so.

  • When she was executive director in KPMG LLP’s national office, Holder was part of what the SEC called a “concerted effort” by some members of the firm who used to work at the PCAOB to leak confidential audit regulator information to KPMG to improve how the firm fared in the regulator’s audit inspections.
  • Holder “willfully violated” PCAOB ethics codes, which prohibit staff from using confidential information for private gain and require staff to maintain integrity when performing services in connection with preparation of an audit report, the SEC said.
  • In August, she was sentenced to eight months in prison for her role in the scheme. KPMG in June agreed to pay $50 million to settle SEC allegations that it altered past audit work after receiving the information.

To contact the reporter on this story: Nicola M. White in Washington at nwhite@bloombergtax.com

To contact the editors responsible for this story: Jeff Harrington at jharrington@bloombergtax.com; Kathy Larsen at klarsen@bloombergtax.com

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