The SEC announced settled charges against three former KPMG audit partners for improperly sharing answers to internal training exams and for subsequent wrongdoing during an investigation at the firm.
The orders against Timothy Daly, Michael Bellach and John Donovan find that each engaged in misconduct in connection with exams KPMG administered to test whether its audit professionals understood certain accounting and auditing principles. The three also subsequently lied about and/or attempted to cover up their actions during an investigation of the matter, the SEC asserts.
Without admitting or denying the findings, Daly, Bellach and Donovan agreed to be suspended from appearing or practicing before the SEC as accountants. This means they will not participate in the financial reporting or audits of public companies. The three have the right to apply for reinstatement after three years, two years and one year, respectively.
“Audit professionals play a critical role in the integrity of the financial reporting process and the protection of investors,” says Steven Peikin, co-director of the SEC’s Division of Enforcement. “These actions reflect our commitment to hold these gatekeepers responsible for breaches of their professional obligations.”