The report recommends that the federal government itself take over the setting and monitoring of auditing standards, and that auditors be held liable for simple negligence in failing to detect fraud and illegal acts by clients.
Similar mergers are likely to follow.Coopers & Lybrand, responsible for auditing Britain's collapsed Maxwell Communications media group, is to pay a record £68m ($108m) to settle negligence claims by creditors.
Despite major scandals, the Department for Business, Innovation and Skills has never prosecuted any UK auditing firm for negligence.
After years of failed suicide prevention audits and CDCR negligence in remedying court-ordered violations, the blatant inaction of CDCR and CIW led to Erika's tragic and preventable death".
The problem is that some of those 500,000 folks who reported themselves exempt from the penalty will get audited by the IRS and then hit with the 10% early withdrawal penalty and possibly an additional penalty for negligence.
KPMG has admitted serious negligence in its audit of the collapsed Independent Insurance and been ordered to pay a fine and costs amounting to £1.6m.
The amended complaint contends that the auditing firm concealed the fraud "first by negligence, then by conscious avoidance and eventually by active facilitation".
