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KPMG Appeals One-Year Auditing Suspension In Oman, Loses

Posted on by Jason Bramwell

KPMG couldn’t talk its way out of trouble, as an independent appellate court in Oman recently upheld a securities regulator’s ruling last November that prohibits the firm from taking on any new auditing clients for one year.

In a statement on March 3, the Capital Market Authority of the Sultanate of Oman said:

“Capital Market Authority (CMA) hereby wishes to inform that the independent appellate body considered KPMG’s appeal against CMA decision that had suspended KPMG from auditing entities regulated by CMA for a period of one year starting from 13 November 2018. The appellate body, after hearing the argument of both parties, issued its judgement on 28 February 2019 upholding the decision taken by CMA.”

KPMG was given the one-year auditing ban late last year after the CMA found “major financial and accounting irregularities” during an investigation of some listed companies it regulates. Following the investigation, the regulator said some audit firms showed “professional negligence” that “warranted disciplinary measures against them in the interests of the investors and other stakeholders.”

After the suspension was made public, KPMG said it was “cooperating with the CMA during the review of certain audits dated prior to 2015 and the firm is fully committed to cooperating with the CMA to resolve these matters.”

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(UPDATE) Comp Watch ’11: Things Are Looking Up for KPMG Advisory

~ UPDATE: Email sent to audit professionals added to the end of the post.

How do variable increases “larger than last year for most of you and much larger for many” sound?

With the first half of FY2011 in the books, we want to provide you with an update on the firm’s and Advisory’s performance and share information about our plans for employee compensation.

We are pleased to report that the firm and Advisory are ahead of plan for the first half of the year. Advisory’s revenues have grown 18% compared to last year and our pipeline of opportunities stands at a record $1.5 billion, confirming the marketplace relevance of our services.

We have also successfully added more professionals to our team (over 800 new and ennovated high value services (including services around cloud and data analytics), acquired a strategic sourcing business (placing us No. 1 in that important piece of the market) and strengthened our training programs (through Advisory University and many targeted programs).This is great news, and a direct result of your contributions!

Further, we are confident that we can finish the year in a very strong position if we continue to work together with a sharp focus on the marketplace, our people, the profitability of our engagements (including expanding the work we offshore to KPMG Global Services), and the timely billing and collection of our receivables.

So what does this mean for compensation? As we have said in the past, our philosophy is that as the business does well, we will share those rewards with our people. And, assuming we stay on plan the remainder of the year, that’s exactly what we plan to do:

Variable Compensation and Salary Increases

Based on our strong results to date, variable compensation will be larger than last year for most of you and much larger for many. Further, we expect that approximately 80% of you will receive a variable compensation award in October. And if you are a client service associate or senior associate, variable compensation is in addition to any awards earned as part of the Above & Beyond program.

Market conditions are dynamic and will vary greatly across our many service disciplines within Advisory. Therefore the range of salary increases will also vary greatly by individual and skill set. We have increased the planned spend for salary increases as well, so increases in base salaries on average will also be better than last year. We know that rewarding and recognizing our people is critical to fostering a high-performance culture, so you can be sure that we will continue to meet our commitment to provide an attractive and competitive total compensation package that differentiates exceptional performers with superior rewards.

Accelerated Compensation Communication

To help provide you with more clarity on what you can expect in the way of compensation come October 1, in July, a leader will meet with you individually to provide you with a line of sight into what you can personally expect to receive regarding salary increase and variable compensation. (As in past years, employees promoted as of July 1, will receive a promotion bonus at that time that will be in addition to any salary increase or variable compensation effective October 1).

And we ask that each of you continue working as a team, providing the best service you can to your clients and colleagues, and helping us to drive outstanding business results. Remember, the better the business does, the better we all do.

Thanks for everything you’re doing to build KPMG’s reputation as the best firm to work with, and to contribute to our success!

Reactions are welcome at this time.

UDPATE: Henry Keizer lays it down for the audit side of the house and while rosy (nearly identical wording as noted in the comments), there’s no specific “larger” or “much larger” language which may be of concern:

With the first half of FY2011 in the books, I want to provide you with an update on the firm’s performance and share information about our plans for employee compensation.

I am pleased to report that the firm is ahead of plan for the year. This is great news, and a direct result of your contributions. And, while there is still a lot more work to do, we are confident that, working together, we can finish the year in a strong position. We have good traction in the marketplace and anticipate that the demand for our services and skills will continue to be strong.

So what does this mean for compensation? As we have said in the past, our philosophy is that as the business does well, we will share those rewards with our people. And, assuming we stay on plan the remainder of the year, this year’s compensation pool will be enhanced compared to last year.

We know that rewarding and recognizing our people is critical to fostering a high-performance culture, so you can be sure that we will continue to meet our commitment to provide an attractive and competitive total compensation package that differentiates exceptional performers with superior rewards.

And we ask that each of you continue working as a team, providing the best service you can to your clients and colleagues, and helping us to drive outstanding business results. Remember, the better the business does, the better we all do.

Thanks for everything you’re doing to build KPMG’s reputation as the best firm to work with, and to contribute to our success.

Tax people – anything to report?

Caption Contest Friday: KPMG Scary Stories

Pictured below is R.L. Stine, often known as the “Stephen King of children’s literature”. Mr. Stine did some pre-Halloween scary story-telling yesterday while visiting students. The occasion celebrated KPMG’s Family for Literacy distributing its one-millionth book. “I think it would be a very scary world without books,” said Stine.
RL-Stine-and-kids_350.jpg
Rules: Submit possible captions in the comments. We’ll choose our favorites — with preference given to those with a Big 4/KPMG/accounting bent — and then let you vote for the best one.

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