Americanas Fraud Scandal: Americanas, a Brazilian retail behemoth, committed fraud due to accounting errors and internal control issues. Both issues caused the scandal. The issue surfaced this year, upsetting shopping everywhere. Thus, significant modifications occurred.
Americanas’ accounting company, KPMG, stated the business had received several warnings about its issues and lack of controls. KPMG handles American financial issues. KPMG operates all of Americanas’ finances. They wrote a control letter to management in 2019 to alert them. After learning of the problems, American Airlines ended its partnership with KPMG.
Banking and auditing firms are being investigated for possibly aiding in financial statement fraud. A non-government organization conducted the study. It blamed prior presidents and questioned banking institutions.
KPMG also collaborated with Lojas Americanas and B2W before Americanas was founded. These firms didn’t commit fraud between 2016 and 2019, yet they have control issues with ad spending.
KPMG had to send the internal control letter to wake Americanas’ finance chiefs after they were informed of the needed financial reforms but did nothing.
KPMG sent the letter to wake up America’s top financial leaders since the most crucial accounting changes had already been told. America ended its engagement with KPMG as a result.
PwC’s Fabio Cajazeira Mendes described the suspected public scam’s complexity. His remarks suggested the inspectors may need to catch up on the problems.
American maintains that the June study was an exploratory paper provided to authorities for investigation. KPMG maintained its contract with Americans when the company switched auditors to PwC.
Investigations were launched, and witnesses testified before Brazilian legislators. One former CEO has pulled out due to health concerns, and another has refused to answer MPs’ questions because he needs a lawyer.
More information about the topic makes predicting its consequences on America or the business harder. This is a reminder that firms must follow strict financial standards and be honest with customers.