Boston (Aug. 29, 2002) -- A court here ruled that the U.S. unit of Big Four firm KPMG must stand trial along with its KPMG Belgium arm in shareholder suits arising from accounting fraud at its former client, Lernout & Hauspie Speech Products NV.A judge’s ruling cited a number of "red flags" which inferred that KPMG U.S. acted with "recklessness or actual knowledge" in helping prepare the 1999 10-K for Lernout, a filing that later turned out to be fraudulent.
Lernout & Hauspie, which manufactured speech recognition software, filed for bankruptcy in 2001, after audits uncovered that it had booked some $373 million in fraudulent revenue over a two-year period from 1998-2000.
-- Electronic Accountant Newswire staff
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access