A former high-ranking partner at KPMG LLP was convicted Monday on accusations he was involved in a scheme to steal confidential information to help the Big Four accounting firm look better to its regulator, federal prosecutors said.
David Middendorf, KPMG’s former national managing partner for audit quality and professional practice, was convicted on four of five counts, including conspiracy and wire fraud, in federal court in Manhattan.
Also convicted was a co-defendant, Jeffrey Wada, a former employee of the Public Company Accounting Oversight Board, which regulates the audit industry. Wada was convicted on three of four counts, including conspiracy and wire fraud, his attorney said.
Both men were charged in a high-profile “steal the exam” scandal in which partners at KPMG improperly obtained advance information about which of KPMG’s audits the PCAOB planned to review in its annual inspections of the firm. Prosecutors said the partners hoped to use the information to better prepare for and improve KPMG’s performance on the inspections, on which it had done poorly in the past.
An expanded version of this report appears on WSJ.com.
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