British Accounting Watchdog Reportedly Plans to Probe KPMG Over Rolls-Royce

U.K.’s accounting watchdog, the Financial Reporting Council, reportedly plans to investigate KPMG in relation to the bribery case against Rolls-Royce Limited.

From 1989 to 2013, Rolls-Royce paid off officials in 11 developing countries—including China, India and Thailand—to win lucrative contracts. During that period, starting from 1990, the accountancy giant signed off on Rolls-Royce’s accounts.

The Serious Fraud Office (SFO) in the U.K.—the country’s corruption investigator—started to examine the engineering group’s wrongdoings that involved contracts it signed with airlines in China to supply engines for new jets and business dealings in Indonesia.

Rolls-Royce has agreed to pay more than US$812 million to settle bribe claims with U.S., British and other authorities, the firm said Monday.

The biggest payment—to be paid over five years—will be to the U.K. government, totaling £497 million (US$602 million), plus interest, in addition to a payment to cover costs.

The U.S. Justice Department will be paid US$170 million, Rolls-Royce said, with Brazil’s Ministério Público Federal set to receive US$25.6 million under the agreement.

The FRC will investigate whether KPMG followed the rules when it signed off the accounts and whether it should have spotted the illegal payments that were being made to middle-men. 

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