KPMG 'to face civil charges' over Xerox
KPMG, still reeling from its failure to clinch a deal with Andersen Worldwide, said yesterday it was 'bewildered' at the threat of civil charges over its audit of Xerox.
The threat came from the US Securities & Exchange Commission, which warned one of KPMG’s US partners could face civil charges after Xerox, the troubled photocopier group, allegedly booked revenues from long-term office equipment leasing deals upfront instead of over the period of the contracts.
According to The Times, US partner Michael Conway, has already received a so-called Wells notice, which gives him the chance to make his case against pending civil charges.
Last week Xerox agreed to pay a $10m civil penalty and restate its books back to 1997 to settle SEC charges, though the group neither admitted nor denied the allegations.
Xerox replaced KPMG, which had been its auditor for three decades, with PricewaterhouseCoopers last September.