KPMG Under Scrutiny; Ernst & Young Forms Oversight Panel

The PCAOB publicized previously sealed criticism of KPMG and questioned the firm’s commitment to audit quality in the wake of a scandal that resulted in criminal charges for firm executives, the Wall Street Journal reports. In recent inspectionsthe PCAOB found significant deficiencies in 22 of the 51 KPMG audits they reviewed for the 2016 inspection cycle, and 26 of the 52 they reviewed in the 2017 cycle. No further regulatory action has been taken against KPMG, and it isn’t known whether the PCAOB plans any, according to the WSJ report. Meanwhile, Ernst & Young LLP is creating an independent panel to advise it on how to improve its audits. The panel is intended to provide the firm with an outside perspective on its audit operations and culture and will be chaired by F. William McNabb III, former CEO of Vanguard Group, and also will include a former member of the PCAOB, the WSJ reports.