The U.S. Public Company Accounting Oversight Board (PCAOB) fined the Netherlands affiliates of Deloitte, Ernst & Young, and PricewaterhouseCoopers a total of $8.5 million for widespread internal exam cheating.
“The PCAOB found that, over a five-year period, all three firms failed to adequately prevent or detect extensive improper answer sharing on mandatory tests for training intended to develop the competencies and professional integrity of their personnel,” the board said on June 25, 2025.
The audit watchdog said that the three Big Four affiliates violated PCAOB rules and quality control (QC) standards. Hundreds of professionals, including partners, cheated between 2018 and 2022 by either providing access to test questions or answers, or by failing to report such misconduct during mandatory training courses.
The civil penalties are as follows:
- Deloitte Accountants B.V. $3 million
- EY Accountants B.V. $2.5 million
- PricewaterhouseCoopers Accountants N.V. $3 million
The fines are higher for Dutch Deloitte and PwC because the misconduct extended up to senior leaders.
All three firms are required to take steps to fix its QC systems.
The firms’ U.S. attorneys did not immediately respond to requests for comment.
KPMG Netherlands was already fined $25 million in a separate action in April 2024 for cheating on mandatory internal training exams by more than 500 of its professionals from at least October 2017 to December 2022.
“The PCAOB will not allow impaired ethics to threaten the integrity of our capital markets,” said PCAOB Chair Erica Willliams in a statement.
The PCAOB and the Dutch Authority for the Financial Markets conducted parallel investigations. The Dutch authorities have separately imposed “intensive supervision” on the three firms.
“I thank the Dutch Authority for the Financial Markets for its cooperation in the investigations of these matters and applaud the intensive supervision measures it has taken to hold these firms accountable going forward,” Williams added.
The PCAOB said that all three firms received credit for cooperation during investigation. Without such cooperation, the civil fines would have been significantly higher, and the board may have imposed additional sanctions.
Deloitte Netherlands
According to the PCAOB’s order, Deloitte Netherlands has used online platforms for training since at least 2018, which often included tests.
The firm adopted a global code of conduct emphasizing that professionals must report breaches when discovered. But the code did not specifically discuss sharing of answers or questions. The code was amended after 2022.
The firm became aware of cheating at a U.S. member of the KPMG International Limited network in June 2019 because of enforcement action brought by the U.S. Securities and Exchange Commission (SEC).
“Even after learning of that misconduct, Deloitte Netherlands did not appropriately evaluate and address the risk of improper answer sharing among its personnel,” the PCAOB order states. “Although, in November 2019, the Firm started adding language to some of its training tests warning against answer sharing in connection with the tests, the Firm did not include this warning language in all of the Firm’s mandatory audit and compliance trainings until 2022.”
EY Netherlands
The PCAOB said that EY Netherlands, also since at least 2018, has used online platforms to train its personnel, which included tests.
Similarly, the firm became aware of exam cheating at U.S. KPMG firm in June 2019 because of the U.S. SEC’s actions against it.
The PCAOB said that EY Netherlands also did not appropriately address risk of cheating even after leaning of KPMG’s misconduct.
“Although in June 2020 the Firm started adding mandatory attestations to its training tests warning against answer sharing in connection with the tests, the Firm did not include these attestations in all of the Firm’s mandatory audit and compliance training known to have tests until mid-2021,” the PCAOB order states. “It was not until December 2022 that the Firm engaged in messaging to all of its personnel through firmwide emails or postings specifying that improper answer sharing was prohibited.”
PwC Netherlands
The PCAOB’s order describes a similar situation at PwC Netherlands, noting that even after learning of KPMG’s misconduct, it did not take adequate steps to make sure its personnel would not cheat.
“Starting in August 2020, the Firm added specific language to some of its training tests warning against answer sharing in connection with the tests, but this warning language had still not been included in all of the Firm’s mandatory audit and compliance trainings as of the end of 2022,” the order states.
“As we have stated previously, investors must be able to trust that all audit professionals are acting with integrity, and few things damage trust like impaired ethics,” Robert Rice, director of the PCAOB’s Division of Enforcement and Investigations, said in a statement. “Our investigations of these three firms revealed that their quality control systems failed to evaluate appropriately and monitor the risk of improper answer sharing among their personnel, including after the firms learned of extensive answer sharing in at least one other major audit firm.”
This is the latest in a series of cheating scandals at Big Four affiliates.
In February, for example, the PCAOB fined an Israeli PwC affiliate $2.75 million for answer sharing on internal training tests involving hundreds of its personnel.
It is not only the PCAOB that sanctioned Big Four firms.
The SEC also had to step in. In June 2022, for example, the commission fined Ernst & Young LLP $100 million for cheating on CPA ethics exams.
This article originally appeared in the June 26, 2025, edition of Accounting & Compliance Alert, available on Checkpoint.
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