The Morning Report
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Monday, Dec. 4, 2006 | Pat Shea paints a rosy picture of KPMG as merely an accounting firm doing their job as they extort another $1.8 million from the city of San Diego, bringing their take to $6.2 million (as of now). He doesn’t mention that KPMG LLP, the nation’s fourth-largest accounting firm, has admitted to setting up fraudulent tax shelters for its wealthiest clients that cost the U.S. billions of dollars in revenue. In 2003, KPMG was under investigation by the U.S. attorneys’ office for accounting fraud. KPMG agreed to pay $456 million to avoid an indictment from the US Department of Justice.
Shareholders of the former Polaroid Corporation sued KPMG, alleging the firm violated accounting guidelines when it audited the company before its bankruptcy. It is stated that KPMG LLP, failed to inform stockholders the company was on the brink of collapse by issuing a “going concern” warning on the 2000 financial statements. A going concern statement by an auditing firm indicates a company may not have the financial wherewithal to stay in business.
KPMG has regularly been suspected of chicanery. This observer suggests that they have found an easy mark in San Diego to help relieve the pain of fines for egregious activity in the past. I hope that City Attorney Mike Aguirre nips at their heels a little.