Magazine article American Banker

Wells Fargo Defends Decision to Keep KPMG as Its Auditor

Magazine article American Banker

Wells Fargo Defends Decision to Keep KPMG as Its Auditor

Article excerpt

Byline: Kevin Wack

Wells Fargo advised its shareholders Wednesday to ratify its reappointment of KPMG as the bank's auditor, even though the accounting giant failed to detect rampant sales abuses at the San Francisco megabank.

The $1.9 trillion-asset bank also revealed that CEO Timothy Sloan, who took the helm in October following John Stumpf's resignation, was paid $12.83 million in 2016.

The disclosures were part of Wells Fargo's annual proxy statement, filed with the Securities and Exchange Commission in advance of the bank's annual meeting. The meeting is scheduled for April 25 in Ponte Vedra Beach, Fla.

KPMG, which has its U.S. headquarters in New York, has been Wells Fargo's auditor for decades. Last year, the bank paid KPMG a total of $52.5 million in fees, up from $49.3 million the previous year.

In recent months KPMG has faced criticism for failing to uncover the widespread fraud at Wells, where as many as 2 million phony customer accounts were established between 2012 and 2016.

Last October, Sen. Elizabeth Warren, D-Mass., and three of her colleagues said that KPMG's performance at Wells raised questions about the quality of the firm's audits.

But Wells said Wednesday that its board's audit and examination committee determined that KPMG has a demonstrated understanding of both the financial services industry and Wells Fargo's businesses. The bank also attested to the "professionalism of KPMG's team, including exhibited professional skepticism, objectivity, integrity and trustworthiness. …

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