IP-WARS.NET || Surrounded by KPMG

Surrounded by KPMG

By codswallet, Section Diary
Posted on Fri Feb 25th, 2005 at 11:31:00 EST

They're everywhere, it seems. I'd look under the bed, but I'm afraid.

Not only did KPMG audit Canopy and SCOXE, but also Altiris and MTI. This leads one to the reasonable guess that Yarro negotiated some sort of package deal discount for Canopy group accounting. Very prudent, except for trifling matters like conflict of interest, the corporate veil, etc.

Now Canopy (auditor=KPMG) sells Vultus (auditor=KPMG?) to SCOXE (auditor=KPMG). A year later this multimillion dollar purchase is written off by SCOXE. 62% of this loss was sustained by those stockholders who weren't Canopy.

Vultus was private, so I can't prove KPMG was their auditor, but even the Canopy-SCOXE pairing is a conflict.

If I were KPMG, and I was expecting a visit from the SEC, I'd want to get out in front of this. Given what's happened at Canopy, KPMG's priority in this is to come out of it clean. They'll sell out Yarro and SCOXE in a heartbeat. There'll be no cover up. In fact, going back and finding dirt from the Arthur Andersen era would be a useful distraction - something like the Caldera-Santa Cruz deal, for instance.

I don't think we'll see a 10-K for a while.

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Surrounded by KPMG | 9 comments (9 topical, 0 editorial, 3 hidden)

KPMG coming clean (4.60 / 5) (#5)
by fudisbad on Sat Feb 26th, 2005 at 03:34:25 EST
(User Info)

KPMG also offer tax shelters (Google search "kpmg tax shelters"). A tax shelter is a front company that "earns" a portion of your earnings. This involves lying to the SEC about where your money is earnt. Tax shelters are in places where there is little or no company tax (such as Bermuda, the Cayman Islands, the British Virgin Islands and the island of Labuan, Malaysia). By a loophole in US law, companies don't have to pay tax for income earned from these places.

The thing is KPMG are trying to distance themselves from these tax shelters by setting up a front company (can't remember what it is called). They are still in hot water about setting up tax shelters (see this article). The disgraced accountants resigned.

The point being that KPMG are trying to come clean about many other things. If they are implicated in the SCOXE scam, combined with the tax shelter episode, their reputation would take a huge hit and be labelled a dirty accounting firm who cooked the books for you. (They were once like that, but did not have a reputation for being so).

By the way, does SCOXE have a tax shelter? Or it it too unprofitable to have one?

Darl McBride, show your evidence!
Back a stock scam, buy SCOXE!

Re: Surrounded by KPMG (4.00 / 6) (#3)
by tintak on Fri Feb 25th, 2005 at 13:37:14 EST
(User Info)

They seem to be in the thick of controversy on both sides of the pond. Canopy must be very small beer to KPMG.

http://politics.guardian.co.uk/funding/story/0,11893,957192,00.html

http://www.usatoday.com/money/companies/management/2005-02-10-taxshelters-usat_x.htm

The last paragraph of the above story seems to echo your point.

"Investigators particularly criticized KPMG and the banks for working together when the firm audited the banks' books. The report says KPMG knew the relationship "raised auditor-independence concerns," concluding that the firm was "auditing its own work.""

Re: Surrounded by KPMG by nono2sco, 02/25/2005 14:47:45 EST (3.66 / 3)

Re: Surrounded by KPMG (3.20 / 5) (#1)
by br3n on Fri Feb 25th, 2005 at 12:11:07 EST
(User Info)

what happens if no 10 k never comes?
what are the penalties?
sec investigation?what else?
does KMPG get investigated also?
since there are links to the other companies?

br3n

Re: Surrounded by KPMG by codswallet, 02/25/2005 12:42:23 EST (4.28 / 7)

Bye bye spambot (none / 0) (#9)
by Potential Recruit on Tue Nov 28th, 2006 at 11:16:08 EST

This used to be a spambot post that is flooding the site. Due to volume, I had to resort to this while I work to block access by these bots. My apologies - thanks for your patience.

Jeff

Surrounded by KPMG | 9 comments (9 topical, 0 editorial, 3 hidden)

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