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Tag - Kpmg
The saga surrounding HP's multi-billion dollar Autonomy write-down took new turns and added new players today, with the announcement of a second shareholder lawsuit over the faltering computer giant's acquisition of the British software firm. The new suit names not only HP's board of directors, officers, and former executives, but also Deloitte and KPMG, two of the Big Four audit firms, as defendants. The suit alleges that the firms missed multiple red flags that should have alerted them to flaws in Autonomy's accounting.
An independent panel has determined that Ernst & Young was not accountable for any misrepresentation or legal lapses in how the firm audited Olympus's books in the face of the digital imaging company's $1.7 billion financial scandal. The panel had been commissioned by the accounting firm in December to take an independent look at how the accounting firm oversaw Olympus's financial reporting practices over several years while Olympus's executives were allegedly engaged in financial misconduct. A separate panel commissioned by Olympus had also cleared Ernst & Young, as well as KPMG, which had been the company's accountant until 2009.
The full text of an independent report (PDF) finding that Olympus hid $1.7 billion dollars has blamed not just the company but outside auditors and banks. While focused on VP Hisashi Mori and internal auditor Hideo Yamada, it also blamed external auditors Ernst & Young ShinNihon and KPMG AZSA for seeing Olympus try to mask losses but doing nothing to stop it. The root was still senior leadership at the camera maker, however, which was not corrupt but showed an endemic problem in Japan with companies where loyalty is more important than ethics, even if staff underneath are honest.
In 2009, Olympus announced that it had replaced its auditor, KPMG with another global acccounting firm, Ernst & Young. Reuters now reports that the camera and imaging equipment manufacturer failed to tell investors that the reason behind the firing was a disagreement over how to handle a questionable $687 million consulting fee for a $1.3 billion acquisition deal. Olympus recently fired its first non-Japanese CEO, Michael Woodward. in mid-October, allegedly in retaliation for his blowing the whistle on the inordinately large advisory fee.