At KPMG Ethics & Compliance Issues Are in Balance

On Wednesday, October 4, the Robert H. Smith School of Business welcomed Teresa Iannaconi, a partner at KPMG, to its Business Ethics Lecture Series. Iannaconi, MBA , spoke to a room filled with students on the topic of The Pursuit of a Model Ethics and Compliance Program for a Registered Public Accounting Firm.

Iannaconi was named the chair of KPMG's newly created Ethics and Compliance Committee (ECC) in 2003. She says she was thrilled to lead this precedent-setting initiative, and to this day knows of no other similar committee. At KPMG Iannaconi basically started from scratch and built up the Ethics and Compliance Committee to what it is now - a critical part of the KPMG business model reporting directly to the Board of Directors. Over the past few years, the ECC has initiated some impressive company-wide enhancements to the ethics and compliance program at KPMG: created a Code of Conduct that goes beyond legal requirements, instituted an Ethics and Compliance Hotline, appointed an ombudsman, required customized training and signed affidavits for code and training, created a centralized reporting and monitoring system, and defined an organizational structure.

Why create an ethics and compliance program in the first place? Iannaconi says, "I really do believe the world's a better place if we are all ethical." Ethics and compliance programs can enhance reputation, service quality and recruitment opportunity, and create a more positive and productive working environment, not to mention garner higher employee satisfaction and even create a better community.

There is an overlap of ethics, compliance and enterprise risk management, says Iannaconi. Ethics is an elevated concept of model behavior. Compliance is not just voluntary actions, but legal requirements. And risk involves financial or reputational harm and frequently involves ethics and/or compliance, explains Iannaconi. "Survival requires legal compliance. Growth requires enterprise risk management. Excellence requires professional and personal ethics," she says.

The single most important asset of an accounting firm is the people, says Iannaconi. Previously, KPMG handled most human resources-related issues on an office-by-office basis in its approximately 70 locations throughout the United States. Now the ECC has standardized everything to ensure issues are dealt with uniformly across the board. The entire ECC process is a hallmark demonstrating great organizational behavior, says Iannaconi.

About Teresa Iannaconi Iannaconi, was elected to the KPMG Board of Directors in 2003 and most recently served as the Group Head of the Practice Advisory/SEC Group in KPMGs Department of Professional Practice. Prior to joining KPMG in 1995, Iannaconi worked for the Securities and Exchange Commission for 19 years, including six years as the associate director for Accounting Operations and as the deputy chief accountant in the Division of Corporation Finance. From 1975 until 1980 Iannaconi was a graduate student and served on the faculty of the University of Maryland. Iannaconi is a member of the AICPA, the American Accounting Association (AAA), and the Society of Corporate Secretaries and Governance Professionals (Society). She currently serves on the PCAOB subcommittee of the Securities Law Committee of the Society, the editorial and advisory board of Accounting Horizons, the Financial Accounting and Reporting section of the AAA, the advisory board of the SEC Institute, the advisory board of the SEC Historical Society, the Board of Directors of Campus Compact, and the Board of Visitors of the University of Maryland. She also is on the Board of Trustees of the KPMG Foundation. She previously served as a member of the AICPAs SEC Regulations Committee, the FASBs Emerging Issues Task Force, and the American Accounting Associations Financial Accounting Standards Committee. Iannaconi received a B.S. degree in accounting from Georgetown University and an MBA from the University of Maryland.

» Read about the fall 2006 ethics lecture series.
> Read about Smith's spring 2006 ethics lecture series.
> Read about Smith's fall 2005 ethics lecture series.
> Read about Smith's spring 2005 ethics lecture series.

▓ Alissa Arford-Leyl, Office of Marketing Communications