KPMG pays SEC $6.2 million for Miller Energy audit failures
Global auditing giant KPMG agreed to pay $6.2 million in penalties to settle Securities and Exchange Commission charges that it failed to properly audit Miller Energy, an oil driller that emerged from bankruptcy proceedings last year. The Securities and Exchange Commission said KMPG and a partner, John Riordan, engaged in improper professional. KPMG began auditing Miller Energy Resources in 2011 and, according to the SEC, issued a clean audit report despite the company's allegedly grossly overstated values for key oil and gas assets. KPMG and Riordan allegedly failed to fully consider the risks of accepting Miller Energy as a client, did not properly staff the audit, and overlooked the overvaluation of certain oil and gas interests that the company had purchased in Alaska the previous year, according to the SEC. KPMG neither admitted or denied the charges but agreed to be censured, pay a $1 million penalty, pay back all the audit fees received from Miller Energy -$4,675,680-and pay $558,319 in interest. Riordan agreed, without admitting or denying the findings, to pay a $25,000 penalty and be suspended from appearing or practicing before the SEC as an accountant, which includes not participating in the financial reporting or audits of public companies. The SEC's order permits Riordan to apply for reinstatement after two years. KPMG also agreed to significant undertakings designed to improve its system of quality control. Miller Energy was charged with accounting fraud in 2015 and later settled the charges. The company voluntarily delisted its shares in 2015 after filing bankruptcy.
CREDIT: MARKET WATCH