The largest US tax preparer, H&R Block Inc, has dropped KPMG as its
auditor, citing a conflict of interest caused by the election of dissident
shareholder Richard Breeden to its board of directors.
Breeden, a former chairman of the Securities and Exchange Commission, is also
a government-appointed monitor of KPMG’s compliance with a settlement relating
to a probe into tax shelters that it sold.
The same probe saw the firm pay over $456m to the SEC.
The company sought to keep Breeden off the board, citing the conflict of
interest as well as the great expense the company would incur upon the hiring of
a new auditor, Reuters.com reported.
But Breeden argued that the company’s performance was of greater importance
than the auditor it used. Breeden also won board seats in arguing that the
company should concentrate on its core business of tax preparation, and quit
banking and subprime mortgage lending.
H&R Block shares were up 38 cents at $21.06 in morning New York Stock
Exchange trading. They began the year at $23.04.
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