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KPMG Probed Over BAE Audits

Global Glimpses | October 28, 2010

British accounting regulators have started an investigation into KPMG’s auditing of controversial defense company BAE Systems.

The company has for years been battling allegations that it paid bribes to secure arms deals around the world. Earlier this year it agreed on a settlement and substantial fines with prosecutors in the United States and the United Kingdom.

The probe covers KPMG’s audits of BAE in the decade up to 2007. The focus is on commissions paid by BAE to “subsidiaries, agents, and any connected companies.”

The regulator is also looking at any professional advice, consultancy, or tax work that KPMG provided in respect of commission payments and the “status, operation, or disclosability” of three offshore BAE subsidiaries.

BAE agreed to pay a $400 million fine to the Department of...

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