The investigation relates to the financial statements of Rolls-Royce Group for the year ending 31 December 2010, and Rolls-Royce Holdings for the years ending 31 December 2011 to 31 December 2013
The Financial Reporting Council (FRC) has announced that it has begun an investigation into KPMG’s audit of the financial statements of the Rolls-Royce Group.
The decision follows the approval of a Deferred Prosecution Agreement (DPA) between Rolls-Royce and the Serious Fraud Office (SFO) in January 2017, relating to 12 counts of conspiracy to corrupt, false accounting and failure to prevent bribery.
Under the DPA, Rolls-Royce agreed a UK settlement of £497.25m plus £13m costs. Additional agreements with the US Department of Justice and Brazil’s Ministério Público Federal brought total payment to approximately £671m.
The investigation into KPMG’s audit relates to the financial statements of Rolls-Royce Group for the year ending 31 December 2010, and Rolls-Royce Holdings for the years ending 31 December 2011 to 31 December 2013.
In response to the announcement, KPMG said: “It is important that regulators acting in the public interest should review high profile issues. We will co-operate fully with the FRC’s investigation, which follows the SFO’s investigations into Rolls-Royce. We are confident in the quality of all the audit work we have completed for Rolls-Royce, including the 2010-2013 period the FRC is considering.”
Following the SFO’s settlement with Rolls-Royce earlier this year, Barry Vitou, partner and head of global corporate crime at Pinsent Masons, said that the SFO was “in the big league” when it came to investigating and resolving bribery investigations.