Former US KPMG partner Joseph Boyle has made a $100,000 (£56,500) settlement
with the Securities & Exchange Commission over charges laid against him in
connection with his role on the audits of Xerox.
Boyle consented to the judgment, which ordered him to pay a civil penalty of
$100,000, and ‘permanently enjoined from violating the provision of the federal
securities laws that requires reporting of likely illegal acts to a company’s
audit committee, its board of directors and ultimately to the Commission
(Section 10A of the Securities Exchange Act of 1934)’.
Boyle is banned from appearing or practicing before the SEC as an accountant
for a one-year period. Boyle consented to the entry of the injunction, penalty
and SEC order ‘without admitting or denying the SEC’s findings’.
As alleged in the SEC’s federal court complaint, in the course of serving as
the relationship partner for Xerox during 1999 and 2000, Boyle was told by the
audit engagement partner that Xerox was engaged in improper accounting and that
KPMG had a ‘professional obligation’ to communicate these concerns to the Xerox
Despite these warnings, Boyle did not report these likely violations to the
Xerox audit committee or take other steps required by Section 10A of the
Exchange Act when Xerox management did not correct the violations. Boyle retired
from KPMG in 2003.
KPMG in the US has already agreed to pay a total of $22.5m (£11.7m) to settle
a federal investigation into its auditing work for Xerox.
The investigation, which was brought up by the SEC, found that KPMG ‘aided
and abetted Xerox’s violations of the anti-fraud, reporting, record-keeping and
internal controls provisions of the federal securities laws’.
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