KPMG faces accusations of negligence
31 March 2008 17:43
Professional services firm KPMG has been accused of professional negligence, it has emerged.
According to reports, the firm is facing these allegations amid the publication of a report commissioned by the US justice department on the firm's actions in relation to US mortgage company New Century Financial, one of the company's clients.
KPMG provides a number of different services, including tax, advice and auditing. across a total of 145 different countries.
"[They] failed to question or test certain important assumptions in a rigorous manner," said the report.
"The KPMG engagement team acquiesced in New Century's departures from prescribed accounting methodologies and often resisted or ignored valid recommendations."
New Century Financial was forced into a state of collapse in relation to the crisis in the US sub-prime mortgage sector and on April 2nd 2007, voluntarily filed a petition under chapter 11 of the US code on bankruptcy.
According to reports, the firm is facing these allegations amid the publication of a report commissioned by the US justice department on the firm's actions in relation to US mortgage company New Century Financial, one of the company's clients.
KPMG provides a number of different services, including tax, advice and auditing. across a total of 145 different countries.
"[They] failed to question or test certain important assumptions in a rigorous manner," said the report.
"The KPMG engagement team acquiesced in New Century's departures from prescribed accounting methodologies and often resisted or ignored valid recommendations."
New Century Financial was forced into a state of collapse in relation to the crisis in the US sub-prime mortgage sector and on April 2nd 2007, voluntarily filed a petition under chapter 11 of the US code on bankruptcy.
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