Accountancy firm BDO fined in exam fraud investigation; strict monitoring of KPMG ends

Accounting and consultancy firm BDO has been fined 765,000 euros by the Netherlands Authority for the Financial Markets (AFM) over exam fraud. Employees shared answers or collaborated on exams, and the firm did not notice or prevent it.

The AFM had previously launched investigations into several accounting firms, including BDO. The regulator found that BDO lacked clear policies, procedures, and safeguards to guarantee the integrity of exams, and concluded that the firm failed in this responsibility.

BDO’s own investigation found that hundreds of employees engaged in exam fraud between 2018 and 2023. The exams included mandatory tests to ensure auditors maintained the necessary knowledge and skills for certification. Fraud took place across all levels of the firm.

BDO has accepted the fine, and the case is now closed, the AFM said. The financial penalty was lower due to steps the firm has implemented to prevent similar fraud in the future.

The AFM regards the breaches as serious. “Auditors add credibility to companies’ financial statements, so their integrity must be beyond doubt,” the regulator said.

In the past few years, several Dutch accounting firms have been found to engage in exam fraud over extended periods. Earlier this year, Forvis Mazars was fined 446,000 euros by the AFM after its internal investigation revealed that nearly 100 employees had committed exam fraud between 2020 and 2023.

Deloitte, PwC, and EY have each faced multi-million-dollar fines from the U.S. regulator PCAOB. KPMG was previously fined 25 million dollars last year for exam fraud. On Thursday, it was reported that KPMG is no longer subject to the AFM’s enhanced supervision.