{"id":4244,"date":"2023-02-22T14:05:57","date_gmt":"2023-02-22T14:05:57","guid":{"rendered":"https:\/\/www.goodacademic.com\/blog\/questions\/mgmt641-dis-2\/"},"modified":"2023-02-22T14:05:57","modified_gmt":"2023-02-22T14:05:57","slug":"mgmt641-dis-2","status":"publish","type":"questions","link":"https:\/\/www.goodacademic.com\/blog\/questions\/mgmt641-dis-2\/","title":{"rendered":"MGMT641 dis 2"},"content":{"rendered":"
\n Learning Goal: <\/b>I’m working on a accounting discussion question and need an explanation and answer to help me learn.<\/p>\n

https:\/\/www.justice.gov\/usao-sdny\/pr\/former-kpmg-executive-sentenced-scheme-steal-confidential-pcaob-information<\/a><\/u><\/p>\n

A former KPMG LLP partner was sentenced to a year and a day in federal prison for his role in eliciting confidential information from the U.S. audit regulator (PCAOB) to boost the firm\u00e2\u20ac\u2122s annual inspection results. David Middendorf, KPMG\u00e2\u20ac\u2122s onetime national managing partner for audit quality and professional practice was convicted in March of multiple counts of fraud. Prosecutors said several former employees of the PCAOB helped funnel details about its inspection plans to leaders of KPMG, who used the information to change the audits.<\/p>\n

Middendorf \u00e2\u20ac\u0153was at the top of a chain of corruption that threatened to corrupt KPMG and the PCAOB\u00e2\u20ac\u2122s inspections process,\u00e2\u20ac\ufffd Geoffrey Berman, the U.S. attorney in Manhattan, said in a statement Wednesday. \u00e2\u20ac\u0153Today\u00e2\u20ac\u2122s sentence recognizes the harm this fraudulent scheme caused to the PCAOB and the auditing profession more generally.\u00e2\u20ac\ufffd Prosecutors had urged the U.S. District Judge to send Middendorf, 55, to prison, arguing that in his position he could have stopped the scheme in its tracks. Lawyers for Middendorf asked the judge for probation, noting that their client wasn\u00e2\u20ac\u2122t accused of stealing money and that he testified on his own behalf. On the stand, Middendorf admitting authorizing the revisited audits but said he wanted the firm to double-check its work.<\/p>\n

Middendorf told the judge he had worked for KPMG for more than 30 years, took his responsibility as a protector of capital markets seriously and had simply made a mistake. \u00e2\u20ac\u0153The consequences to me from this case are devastating,\u00e2\u20ac\ufffd Middendorf said.<\/p>\n

While the sentence was well below the 57 months Middendorf faced under federal guidelines, the judge said \u00e2\u20ac\u0153meaningful punishment\u00e2\u20ac\ufffd was necessary to help prevent others from engaging in similar conduct. The judge said that Middendorf was regarded as an \u00e2\u20ac\u0153honest and respected professional\u00e2\u20ac\ufffd but knew what he was doing was wrong. \u00e2\u20ac\u0153It is more subtle than stealing money. It involved corruption of a regulatory process.\u00e2\u20ac\ufffd The judge gave Middendorf a year and a day because a sentence of more than 12 months allows a prisoner to get credit for good behavior.<\/p>\n

Some of the key facts to consider:<\/p>\n