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Yes, but KPMG was willing to pay $456 million in fines for services it acknowledges charging only $115 in revenue for. KPMG obviously was not comfortable with its position if it was willing to walk away losing that much money on the concepts.

I'd like to know just what the economic substance of the purported transactions were that they would create such losses for KPMG's clients, and the clients would be eager to engage in such transactions purportedly costing them billions in losses.

I'd like to know just what the economic substance of the purported transactions were that they would create such losses for KPMG's clients, and the clients would be eager to engage in such transactions purportedly costing them billions in losses.

I suppose that is what is known as "aggressive accounting". One strategy I ran across was claiming losses you had not yet had based on "estimates", usually SWAGs.

Yes, but KPMG was willing to pay $456 million in fines for services it acknowledges charging only $115 in revenue for. KPMG obviously was not comfortable with its position if it was willing to walk away losing that much money on the concepts.

As I understand it, KPMG agreed to the settlement to avoid indictment, which is tantamount to a death sentence for a CPA firm. In other words, contrary to the rights guaranteed in the bill of rights to due process and a jury trial by your peers, the government held a gun to the firm's head and said "your money or your life." That this could happen in a liberal democracy is a travesty.

You may recall that the government indicted Arthur Andersen a few years ago and the firm promptly failed. Although the government secured a conviction, the Supreme Court overturned it. So, bottom line: Arthur Andersen committed no crime, but was snuffed by the government.

Now you understand why KPMG could not fight but had to knuckle under, no matter how onerous the terms dictated by the government.

Power corrupts.