Business

Feb 4, 2008

KPMG: the common link in Allco and MFS fiascos

Of all the similarities between struggling financial companies Allco and MFS, one obvious link which has so far escaped media attention has been the role of auditor KPMG in the twin fiascos, writes Adam Schwab.

Of all the similarities between struggling financial companies Allco and MFS, one obvious link has so far escaped media attention: the role of auditor KPMG in the twin fiascos.

While MFS remains suspended (it lasted traded at 99 cents compared with a high of around $6.70 in June) and Allco continues to struggle (closing at $3.30 compared with a high of approximately $13.00 in March) the common ground between the two companies is that they were both audited by (and more importantly, paid significant non-audit fees to) KPMG.

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4 comments

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4 thoughts on “KPMG: the common link in Allco and MFS fiascos

  1. A W Jones

    Should be an annual reporting requirement: “We slipped our auditors x% of their audit fees for consulting work”. Or: These accounts are true and accurate subject to the continued receipt of millions of dollars in consulting work.

  2. Mark

    The audit situation is indeed farscial. I cannot see any other way out but to have goverment auditors. In such a situation, there would not be any incentive to provide a “good” audit for the implicit promise of repeat business.

  3. tc

    Auditors always do the right thing by the hand that feeds. The old dresses as the new by throwing layers of IFRS/Sarbox around itself and parading around as a brand new way. The only thing ‘new’ is the ever increasing layers these blokes hide behind.

  4. Shann Turnbull

    The accepted meaning of the word “independent” become a lie when applied to Auditors who are selected and paid by those whose accounts they judge. It would be unethical for any Judge in a court to be hired and paid by those she judges!

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