Six accountants from KPMG are indicted in conspiracy case

A former KPMG executive in Houston was among six certified public accountants indicted in federal court as part of an alleged conspiracy to provide the giant accounting firm with advance notice of audit inspections by an oversight board.

Cynthia Holder, 51, executive director of KPMG’s department of professional practice group in Houston until last year, was charged Monday with wire fraud for the role she allegedly played in obtaining a list of upcoming inspections of KPMG audit clients from a contact at the Public Company Accounting Oversight Board, according to the indictment.

The nonprofit board was created by Congress and is responsible for inspecting auditing companies to ensure they comply with financial reporting laws and professional standards.

Four other accountants were also indicted Monday. They were KPMG’s former national managing partner for audit quality and professional practice, KPMG’s former national partner in charge of inspections, KPMG’s former banking and capital markets group co-leader, and a former inspection leader at the oversight board.

Another former KPMG partner was indicted earlier this month in New York.

KPMG said it promptly notified the authorities when it discovered the issue in early 2017 and has cooperated with the government in its investigation. The firm has taken remedial actions to assure that such conduct cannot happen again, firm spokesman Manuel Goncalves said.

The oversight board said it is also cooperating with the investigation. It will conduct a review of its security and other controls, according to a prepared statement.

The Securities and Exchange Commission is also seeking administrative penalties against the six accountants.

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