Three of the Big 4 firms in the Netherlands have been fined a combined $8.5m by the US Public Company Accounting Oversight Board (PCAOB) for violations over their internal training programs.
The PCAOB found that over the last five years PwC, Deloitte, and EY “failed to adequately prevent or detect extensive improper answer sharing on mandatory tests for training intended to develop the competencies and professional integrity of their personnel.”
Hundreds of the firms’ accountants, including partners, engaged in this improper answer sharing – either by providing access to test questions or answers, by receiving such access without reporting it, and taking tests together. This misconduct extended up to the level of senior leaders at Deloitte Netherlands and PwC Netherlands.
The PCAOB and the Dutch Authority for Financial Markets (AFM) conducted parallel investigations, and the AFM has separately imposed intensive supervision measures aimed at preventing recurrences.
KPMG Netherlands was fined $25m by the PCAOB in 2024 for the same offences.
PQ magazine contacted the AFM and asked it what will happen to the hundreds of employees and partners who cheated? Will they be disciplined or sanctioned?
The AFM told us: “The AFM views exam fraud as a symptom of deeper systematic issues. It is linked to factors such as time pressure, commercial incentives, lack of direction, and incorrect exemplary behaviour. Exams were a vulnerable point within this structure.”
AFM does not believe it is appropriate to attribute the misconduct to individual accountants. So, disciplinary proceeding are not being pursued by the AFM, and the focus will be on the underlying system that enabled such behaviour.
Top audit tutor Paul Merison said internal training is typically seen as an annoyance that gets in the way of the ‘real work’, so any cheats that speed things up are seen as acceptable.
He felt making the training online has cheapened it (in all ways) and makes matters worse. Merison added: “Why should staff care when their bosses are also cheating, and more importantly why will firms care when the fines are so pathetic.”
His solution? Ban them all from taking on new clients for 12 months and fine the firms 10% of their total revenue. Merison said: “The fines imposed are not even a slap on the wrist – more like a kiss on the cheek!”
