NEW YORK (CNNMoney.com) - The Securities and Exchange Commission says two KPMG auditors turned a blind eye to warning signs during an audit of the U.S. unit of Dutch supermarket chain Ahold NV, according to a published report.

The SEC alleges the KPMG auditors violated rules of professional conduct when they audited the books of U.S. Foodservice, The Wall Street Journal said Friday.

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The SEC says Kevin Hill and Rosemary Meyer, the two auditors, "found numerous instances where USF recognized income when it should not have, but Hall and Meyer refused to act upon or failed to recognize these and other red flags" during an audit of the company's results for fiscal year 1999 and the second quarter of 2000, the newspaper said.

The charges are the first made against auditors in a wide-ranging probe into the Ahold unit's accounting practices, the report said. The securities watchdog and the Justice Department have charged at least four former executives of U.S. Foodservice with engaging in a scheme to overstate income in 2001 and 2002, it said.

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