| WASHINGTON, April 25
WASHINGTON, April 25 Two U.S. Senate Democrats
are asking a U.S. audit watchdog to review whether KPMG failed
to disclose or prevent fraud when it audited Wells Fargo's
books during the time period that the bank's sales force
was opening two million unauthorized accounts.
In an April 25 letter to Public Company Accounting Oversight
Board Chairman James Doty, Massachusetts Senators Elizabeth
Warren and Edward Markey said they were concerned that the
accounting company issued clean audit reports for Wells Fargo &
Co from 2011 through 2015 even though KPMG became aware of the
fraud during at least some of that time.
Wells Fargo spokeswoman Mary Eschet declined to comment, and
a spokesman for KPMG did not respond to a request for comment.
KPMG defended its performance in a November 2016 letter to
Warren and Markey, saying it did not think misconduct at Wells
Fargo implicated any of the bank's "key controls over financial
reporting" and that the opening of an unauthorized account "did
not itself have an impact" on the financial statements,
according to the letter.
"KPMG, in its role as Wells Fargo's independent auditor,
failed to prevent or even publicly disclose the fraud that
affected hundreds of thousands of customers, and cost the
company CEO his job," Warren and Markey wrote.
Wells Fargo has been under fire since last fall, after the
Consumer Financial Protection Bureau and other regulators fined
the bank for opening as many as 2.1 million accounts in
customers' names without their permission.
The bank remains under criminal investigation, its former
CEO John Stumpf was forced to resign and an internal
investigation released by the bank recently found that former
retail division head Carrie Tolstedt ignored the systemic nature
of abusive sales practices - a claim her lawyers have denied.
Anger over the account scandal was apparent at Wells Fargo's
annual meeting on Tuesday, as shareholders repeatedly demanded
answers and the meeting was briefly recessed after a shareholder
made a "physical approach" toward a board member.
Investors at Tuesday's meeting also asked questions about
KPMG and why it was able to give the bank a clean bill of health
for its financial statements.
The lawmakers, in their letter to the PCAOB, asked Doty
about whether the PCAOB has reviewed KPMG's audit work and
whether the firm had run afoul of PCAOB rules.
A PCAOB spokeswoman said the board looks forward to
reviewing and responding to the letter.
(Reporting by Sarah N. Lynch; additional reporting by Ross
Kerber and Dan Freed; Editing by Bernard Orr)