KPMG investigated over BAE audit

Accountancy’s watchdog is investigating KPMG auditors over their work with
BAE Systems.

The investigation by the Accountancy and Actuarial Discipline Board
focuses on the audits of British Aerospace/BAE Systems between 1997 and 2007,
looking at commissions paid by BAE to subsidiaries, agents or other companies.

Any professional advice, consultancy or tax work provided to BAE by KPMG
during that period will also come under the microscope in relation to commission
payments. The investigation will focus on commissions connected to three legal
entities: Red Diamond Trading; Poseidon Trading Investments; and Novelmight.

In February BAE
fines totalling £285m
to US and UK authorities for false accounting
and a failure to keep reasonably accurate accounting records, to settle
corruption allegations against the business.

A KPMG statement said: “KPMG Audit plc notes the release made today by the
AADB concerning its investigation into certain work carried out by the firm in
relation to British Aerospace/BAE Systems Group plc. The firm does not believe
there has been any act of misconduct. It will of course be cooperating fully
with the AADB to ensure that the matter is brought to a swift conclusion.”

Further reading:

hits: The wider implications of BAE’s settlement

Related reading

tax dictionary