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Deloitte and PwC were each fined $3 million (€2.6 million) and EY was levied a $2.5 million (€2.1 million) penalty. The inquiry was a joint inquiry between the PCAOB and the Dutch financial regulator, AFM.
Scandal Unfolded After Whistleblower Allegations
The issue first emerged in 2022 when a whistleblower alleged widespread cheating at KPMG Netherlands.
The company later acknowledged that some 500 workers had cheated on mandatory competency exams.
The AFM responded by calling on all the major firms to conduct internal reviews. Deloitte Nederland said in October 2023 that there had been improprieties among staff, and PwC and EY in subsequent months.
It is now compulsory for professionals to show they remain taken out in their field, and with the accountability they hold in auditing companies like ASML and ING that is an especially good thing.
Cultural Problems and Ineffective Leadership to Blame
It attributed the misconduct to high pressure, commercial imperatives, poor leadership, and bad role models among senior staff. While the firms have been taking action to address these issues, the AFM has put all three under extra scrutiny, much as KPMG is currently.
Though the fines are heavy, they are less than the $25 million penalty imposed on KPMG last year for more serious breaches including the participation of a former board member who has since been barred from the profession.
Two other firms, BDO and Mazars, also are looking back at their past practices for possible fraud.
“Accountants and their reliability should be above doubt,” said Hanzo van Beusekom, a member of AFM’s board, stressing the critical role of trust in the profession.
