Auditing

KPMG Looks to Safeguard Its Place

The Big Four firm appeals to its "key constituencies"; plaintiffs' lawyers spar over leadership roles in the litigation.
Stephen TaubJune 24, 2005

To safeguard its place as a member of accounting’s Big Four, KPMG has appealed to some prominent corporate executives to promote its case by writing letters to the Justice Department and submitting commentary to the media, according to The Wall Street Journal.

“We continue to cooperate in the Department of Justice investigation,” George Ledwith, a spokesman for KPMG, told the Journal. “As in any situation that is an important firm matter, we always seek to keep KPMG’s key constituencies informed and current. That includes our people, our clients, and others.” An E-mail from a KPMG partner to employees stated that the firm’s leadership has “reached out” to clients and that they are sticking by KPMG, the newspaper added.

KPMG has also sent letters to accounting professors at a number of institutions, including the University of Illinois at Urbana-Champaign and Michigan State University, to ensure that its future recruiting efforts are not hampered by its current woes. “We know that issues such as this can often be a topic of academic discourse, and we want you to know that we take it seriously,” wrote KPMG partner Eddie Munson, according to the paper.

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A separate Journal story reported on the efforts of law firm Bernstein Litowitz Berger & Grossmann LLP, which filed suit against the audit firm in January in Arkansas state court, to take the lead in litigation against KPMG. According to the report, Bernstein Litowitz has alleged that law firm Milberg Weiss Bershad & Schulman LLP may be “colluding” with KPMG to quickly craft a “pre-packaged settlement…presumably on terms less favorable to the class” than the Bernstein firm would hold out for.

A KPMG spokesman told the paper that the firm hadn’t yet reviewed Bernstein Litowitz’s allegations and that Milberg Weiss declined to comment.