Evaluate the relative responsibility of each of the following parties in the audit quality inspection
scandal by assigning a percentage to each individual. The percentages should sum to 100%.
(Note: To assist you in responding to relevant case requirements, Appendix A contains
biographical sketches of each individual whose role is discussed in detail in the case.)
David Middendorf
Brian Sweet
David Britt
Thomas Whittle
Cynthia Holder
Jeffrey Wada
Scott Marcello
APPENDIX A
Biographical Sketches of Key Individuals
Name Title/Role/Aftermath
David Middendorf KPMG National Managing Partner of Audit Quality and Professional Practice
Developed strategy for improving PCAOB inspection findings by hiring former PCAOB inspectors,
engaging a data analytics firm to predict PCAOB inspection selections, and assigning national
office personnel to monitor engagements in real time. Was the highest ranking individual aware
ofand who authorized the use of inspection selection information in 2016. Obtained the 2017
PCAOB inspection selections from Brian Sweet.
Admitted his role in the scheme after several subordinates confronted him. Terminated by KPMG
and
ultimately tried, convicted, and sentenced in September 2019 to one year and one day in prison.
As of December 2020, an appeal of his conviction is ongoing.
Brian Sweet PCAOB Associate Inspections Director from March 2014 to April 2015. Joined
KPMG as a Partner in the Department of Professional Practice: Inspections Group
Copied confidential inspection information while still employed by the PCAOB, which he later
shared upon
joining KPMG. While at KPMG, obtained additional confidential PCAOB information from Cynthia
Holder.
Entered into a plea agreement with the District Attorney and testified against Middendorf and
Wada in their trials. In November 2020, he was sentenced to time served and three years of
probation along with restitution to be determined.
David Britt KPMG Banking and Capital Markets Group Co-Leader
Became involved in the scandal in 2016 when Brian Sweet told him he had information about the
PCAOBs inspection selections. Was involved in the decision to use this information to review and
improve workpapers for selected engagements. In 2017, assigned additional resources to
engagements the PCAOB planned to inspect.
Pled guilty and was sentenced in October 2020 to six months of home confinement followed by
deportation to
his native Australia.
Thomas Whittle KPMG National Partner-in-Charge for Quality Measurement
Pressured Brian Sweet to provide the list of PCAOB planned inspections for 2015. Later involved
in obtaining 2016 and 2017 inspection information.
Pled guilty in October 2018. Sentenced to two years of probation in December 2020.
Cynthia Holder PCAOB Inspections Leader until August 2015, when she joined KPMG as
Executive Director in the Department of Professional Practice: Inspections Group
Provided confidential inspection information to Brian Sweet while still employed by the PCAOB.
After .
The byproduct of sericulture in different industries.pptx
Evaluate the relative responsibility of each of the followin.pdf
1. Evaluate the relative responsibility of each of the following parties in the audit quality inspection
scandal by assigning a percentage to each individual. The percentages should sum to 100%.
(Note: To assist you in responding to relevant case requirements, Appendix A contains
biographical sketches of each individual whose role is discussed in detail in the case.)
David Middendorf
Brian Sweet
David Britt
Thomas Whittle
Cynthia Holder
Jeffrey Wada
Scott Marcello
APPENDIX A
Biographical Sketches of Key Individuals
Name Title/Role/Aftermath
David Middendorf KPMG National Managing Partner of Audit Quality and Professional Practice
Developed strategy for improving PCAOB inspection findings by hiring former PCAOB inspectors,
engaging a data analytics firm to predict PCAOB inspection selections, and assigning national
office personnel to monitor engagements in real time. Was the highest ranking individual aware
ofand who authorized the use of inspection selection information in 2016. Obtained the 2017
PCAOB inspection selections from Brian Sweet.
Admitted his role in the scheme after several subordinates confronted him. Terminated by KPMG
and
ultimately tried, convicted, and sentenced in September 2019 to one year and one day in prison.
As of December 2020, an appeal of his conviction is ongoing.
Brian Sweet PCAOB Associate Inspections Director from March 2014 to April 2015. Joined
KPMG as a Partner in the Department of Professional Practice: Inspections Group
Copied confidential inspection information while still employed by the PCAOB, which he later
shared upon
joining KPMG. While at KPMG, obtained additional confidential PCAOB information from Cynthia
Holder.
Entered into a plea agreement with the District Attorney and testified against Middendorf and
Wada in their trials. In November 2020, he was sentenced to time served and three years of
probation along with restitution to be determined.
David Britt KPMG Banking and Capital Markets Group Co-Leader
Became involved in the scandal in 2016 when Brian Sweet told him he had information about the
PCAOBs inspection selections. Was involved in the decision to use this information to review and
improve workpapers for selected engagements. In 2017, assigned additional resources to
engagements the PCAOB planned to inspect.
Pled guilty and was sentenced in October 2020 to six months of home confinement followed by
deportation to
his native Australia.
Thomas Whittle KPMG National Partner-in-Charge for Quality Measurement
2. Pressured Brian Sweet to provide the list of PCAOB planned inspections for 2015. Later involved
in obtaining 2016 and 2017 inspection information.
Pled guilty in October 2018. Sentenced to two years of probation in December 2020.
Cynthia Holder PCAOB Inspections Leader until August 2015, when she joined KPMG as
Executive Director in the Department of Professional Practice: Inspections Group
Provided confidential inspection information to Brian Sweet while still employed by the PCAOB.
After joining
KPMG, obtained confidential inspection information from Jeffrey Wada and shared it with Brian
Sweet.
Pled guilty in October 2018. Sentenced in August 2019 to eight months in prison and two years of
probation. Served time and was released in June 2020.
Jeffrey Wada PCAOB Inspections Leader
Accessed KPMG inspection information on the PCAOB IT network, later passing that information
to Cynthia Holder.
Found guilty in a criminal trial and sentenced in October 2019 to nine months in prison.
Scott Marcello KPMG Vice Chair of Audit
Learned from Middendorf that confidential inspection information was obtained in 2017. A week
later, advised Middendorf they needed to alert KPMG General Counsel about the inspection
information.
Terminated by KPMG, but not subject to any criminal proceedings.
Individuals are listed in order of their first appearance in the case study narrative. Appendix A is
available for download, see the link in Appendix D.