KPMG dragged into German fraud
Questions over KPMG's involvement with one of Germany's more unusual fraud cases intensified yesterday after it emerged the firm had helped Comroad with its accounts.
Comroad, a small navigation systems manufacturer, is at the centre of an investigation surrounding the apparent non-existence of a subsidiary, Hong Kong-based VT Electronics, which contributed between 63% and 97% of Comroad’s turnover between 1998 and 2000.
KPMG was the auditor of the company, but resigned in February after withdrawing its opinion on the accounts for 1998, 1999 and 2000.
But it has now emerged that the firm also assisted the company with its cash-flow statements – auditors are barred from auditing accounts they have themselves compiled.
KPMG said it had helped compile the cash-flow statement, but that they had not been audited, and were based on second-hand information from the company.