KPMG Sued For Giving Tom Hicks 'Clean Audit' a Year Before $525-Million Loan Default

Susan

There are many different types of audits and a SAS 70 audit is based on controls that the Company feels their clients are interrested in. The controls are not predetermined by the accounting firm nor are they specified by a regulating agency. SAS 70 audits are not mandated. Therefore if the Company did not include specific controls that they knew would reflect their financial difficulties then these areas would have been out of scope for the SAS 70 auditors and could easily have gone undetected. A SAS 70 reviews process controls and is far different from a SOX audit, applicable to publicly traded companies as specified by federal government legislation. I would be focusing on the internal auditors who would have had full scope and oversight responsibility of these financial dealings not the SAS 70 auditors.

Diana Prince

I am suing KPMG also for discrimination. I worked forthem at their "National Support Center" and the abuse, outright lies,discrimination and fraudulent ratings reports they provided to their own helpdesk employees was beyond unethical. First off the reports were generatedthat upper management knew for a long time was broken down and providing flawedratings to their own people. These reports were the basis for performancebonuses. Imagine that! An accounting firm who's own internalsystems were broken down and giving bad analysis information. Thesereports put women at the bottom of the departmental rankings but based onflawed data they were intentionally representing as accurate. Now for themost disgusting abusive discrimination of all. If a help desk analystneeded to call out sick they would take points off these reports each day theywere out on an unscheduled day off. I was admitted to a hospital andanother woman took her daughter to the ER and they still penalized us. Their attitude is "having a stroke, heart attack or birthing a babyprematurely? Cross your legs or wait until your scheduled day off. AI am suing KPMG also for discrimination. I worked for them at their"National Support Center" and the abuse, outright lies, discriminationand fraudulent ratings reports they provided to their own help desk employeeswas beyond unethical. First off the reports were generated that uppermanagement knew for a long time was broken down and providing flawed ratings totheir own people. These reports were the basis for performancebonuses. Imagine that! An accounting firm who's own internalsystems were broken down and giving bad analysis information. Thesereports put women at the bottom of the departmental rankings but based onflawed data they were intentionally representing as accurate. Now for themost disgusting abusive discrimination of all. If a help desk analystneeded to call out sick they would take points off these reports each day theywere out on an unscheduled day off. I was admitted to a hospital andanother woman took her daughter to the ER and they still penalized us. Their attitude is "having a stroke, heart attack or birthing a babyprematurely? Cross your legs or wait until your scheduled day off. A woman testified in front of congress about “how wonderful KPMG is for women”and how “they promote family support”. Ihave seen the video testimony on the internet.

The lies even extend to their Ethics & Compliancegroup. KPMG boasts and advertises abouthow they have a wonderful Ethics programthat investigates every report. I madesuch an internal report. The group neveronce replied to me and when KPMG closed the report they did it with someone theintentionally misrepresented to me as a person from the Compliance group. A few weeks after the report was “officiallyclosed” they misrepresented a situation and directly fired me. So much for their Ethics group’s fraudulentrepresentation of “retaliation is not tolerated”.

These are just a few of the things that they did. KPMG was brought up on charges regardingtheir turning a blind eye to improper accounting practices of a major clientthey didn’t want to lose. They also weresued by other employees regardingovertime pay disputes. This firm has NOETHICS.

Rooster

Please, please, please, please, please dear Lord Baby Jesus, lying there in your...your little ghost manger, lookin' at your Baby Einstein developmental...videos, learnin' 'bout shapes and colors..., we hope that you can use your baby Jesus powers to make this not screw up Hick's sale of the Stars.Amen.

Nunya

Meanwhile, Hicks continues to enjoy the most expensive Estate in Dallas county...at OUR expense !

Nunya

At this Corporate level, one has to wonder how many sets of "Financials" there are to review...My guess is KPMG got the "street" version !

Guest

I'm sure GSP had NO idea that HSG was in poor shape. Give me a break, these guys took a gamble and lost their asses and now they're trying to point the finger to find someone to blame.

TravisDad

KPMG's insurance will cover it.

CrackerDaddy

......and people are surprised?

Heywood U Buzzoff

So did KPMG not due the job they were supposed to do in their audit or did they issue their lies based on some manager's approval. Either way all the CPAs involved should lose their right to practice revoked and the audit manager should get toplay house in some federal prison for a few years.

Crusoe

Gee, that's intelligent. Did you ever think what audit workload (and thus quality) would do with only 3 of the Final Four remaining? (Hint: Answers are not "decrease" and "improve.") Andersen falling after Enron was a bad thing for the industry, and investors, not a good thing.

And JAIL for the audit manager? (Just FYI it's audit PARTNERS that sign off on engagements, not 'managers.') I'm not even going to justify that tripe. This is civil, homeboy, not criminal.

Lemme give you some advice. It's wise not to swallow the entirety of what one party's suit claims. KPMG, if it thought there was a going concern issue, would have stated that in their audit opinion (which I have not seen). If they did not, they'll likely have papered the issue thoroughly.

formeremployee

In terms of whether its civil or not, it's based on whether the opinion issued was fraudulent or negligent. Basically, if KPMG had the information at hand and did their jobs properly but issued a clean opinion when they should have raised the going concern issue as a qualification, or emphasis, then its fraudulent and criminal. However, if they just didn't pick it up through lack of work and it isn't documented correctly on file, then it's negligent, which may be criminal or civil. Its actually quite difficult to explain here. As a former employee of KPMG I can say that it's easy to cover your bases and still make a mistake like this, but it's unforgivable to miss a debt covenant. They'll probably have their reasons for signing off on the going concern issue though.