KPMG in the Netherlands has agreed to pay a record fine of $25 million to the U.S. audit regulatory authority, following allegations of fraud and misleading investigators. As reported by The Wall Street Journal, this is the largest monetary penalty ever imposed on an audit firm by the Public Company Accounting Oversight Board.

The U.S. regulatory authority stated that KPMG's member firm, KPMG Accountants NV, violated quality control rules related to its internal training program and the monitoring of its quality control system.

The report explains that the firm was involved in unethical exchange of answers during exams between 2017 and 2022, involving hundreds of professionals, including partners and senior company leaders like the former head of assurance, Marc Hogeboom, who agreed to pay a fine of $150,000.

This $25 million penalty significantly overshadows the previous largest fine imposed on an audit firm—a $8 million penalty against Deloitte's Brazil unit in 2016 for alleged misconduct, including issuing false audit reports and attempts to cover up audit violations.

Lastly, it's worth recalling that the auditing Authority recently imposed fines of $2 million on Deloitte subsidiaries in Indonesia and the Philippines, citing that deficiencies in their quality controls led to widespread exchange of answers in internal training tests.