UK accounting watchdog to probe KPMG Rolls-Royce audit
Firm under spotlight after engineer paid £671m to settle bribery allegations
Updated : 14:05
Britain's accounting watchdog said it would investigate KPMG's audit of Rolls-Royce after the engineer paid millions to settle a bribery case with the Serious Fraud Office (SFO).
The Financial Reporting Council (FRC) said it was looking at KPMG's audit of Rolls-Royce for the year ended 31 December 2010 and of Rolls-Royce Holdings for the years ended 31 December 2011 to 31 December 2013.
The decision to investigate followed Rolls' decision to pay £671m in fines and sign a deferred prosecution agreement with the SFO relating to offences including conspiracy to corrupt and a failure to prevent bribery, the FRC added.
KPMG said it was “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.”
The FTSE 100 engineer in January said it had reached a voluntary provisional agreement to suspend prosecution if it fulfilled certain requirements, including payment of the penalties to the SFO, the US Department of Justice (DoJ) and Brazil's Ministério Público Federal.
As well as agreeing a settlement that was said to be a record of its kind, chief executive Warren East apologised "unreservedly" for the bribery schemes, which first came to light in 2012.
Britain's High Court heard of bribery and corruption in Indonesia, Thailand, India, Russia, China, Nigeria and Malaysia.
Rolls-Royce had admitted, the DoJ said, to shelling out more than $35m in payments and paying officials at state-run energy companies in Angola, Azerbaijan, Brazil, Iraq, Kazakhstan and Thailand in order to win contracts.