Risk & Economy » Audit » KPMG investigated over BAE audit

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

The investigation by the Accountancy and Actuarial Discipline Board (AADB) 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 paid 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.”