Ethics Case Study: KPMG Faces Indictment Over Abusive Tax Shelters

Abstract

This case examines the recent investigation and admission of guilt by KPMG for marketing abusive tax shelters.  The concept of deferred prosecution is examined.  The actions taken by KPMG to aggressively market the tax shelters are examined.  Students are required to read both the civil complaint against KPMG as well as KPMG’s official response to the Department of Justice inquiry.  There is a comprehensive bibliography as well as website references for students to research the case.  A detailed list of questions requires the students to analyze the ethical positions of all the parties involved.  This case is directed to accounting students taking the required ethics course or an audit/assurance course and requires the use of an overhead projector that uses transparencies.