How will the KPMG case change the accounting profession?
What’s striking, industry experts say, is how KPMG has thrown its former partners overboard while giving the government evidence to use against them. The case “sends a very solid message to any partner: Even if what you’re doing has the firm’s blessing, if the firm gets in big trouble, you’re going to be on your own,” says Jonathan Hamilton, editor of Public Accounting Report, a Las Vegas newsletter. The $456 million fine could cost every one of KPMG’s partners as much as $300,000. They will also bear the cost of civil damages awarded to former clients. That open-ended liability, without the promise that the firm will stand behind them, may cause the profession to shift from long-standing partnerships to a corporate structure. Will these charges force tax professionals to clean up their act? Nothing concentrates the mind of a wayward professional — or one who’s contemplating actions that cross an ethical line — like the threat of jail time. “There must be partners in other firms thin
