New Senate Report Reveals KPMG's Willful Ignorance in Lead-Up to Collapse of Troubled Banks

PSI Minority Staff Report Concludes Years-Long Probe into KPMG’s Audits of Silicon Valley Bank, Signature Bank, and First Republic Bank
[WASHINGTON, DC] – U.S. Senator Richard Blumenthal (D-CT), Ranking Member of the U.S. Senate Permanent Subcommittee on Investigations (PSI), released a final Minority Staff Report today, marking the end of the Subcommittee’s probe into KPMG’s audits of three major American banks prior to their collapse.
Today’s report concludes a 28-month long investigation into KPMG’s unqualified audits of Silicon Valley Bank, Signature Bank, and First Republic Bank, each of which the auditing firm had certified as representing their numbers fairly and accurately to the public, weeks, if not days before their collapse. Among its findings, PSI’s investigation revealed that KPMG had years-long awareness of the banks’ problems that precipitated each their eventual failures and had put depositors and investors at risk.
“KPMG ignored the warning signs that Silicon Valley Bank, Signature Bank, and First Republic Bank were unstable—justifying their patterns of risky and questionable decisions to issue clean audits in the days leading up to their failures,”said Blumenthal.“Our PSI report exposes KPMG’s willful blindness and stresses that significant reforms to the auditing industry are needed to promote transparency and better protect consumers.”
PSI’s investigation spanned over 400,000 pages of documents and nearly 100 hours of briefings and transcribed interviews with auditors and regulators. A summary of PSI’s key takeaways is below:
Based on these findings, PSI’s report also includes recommendations for reforming how independent auditors are regulated. A summary of these recommendations is below:
The full text of PSI’s Minority staff report isavailable here.
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