LONDON May 4 Britain's accounting watchdog has
opened an investigation into how KPMG checked the books of
Rolls-Royce, the aero-engine group that agreed in January
to pay 671 million pounds ($862.8 million) to settle a
transatlantic bribery probe.
The Financial Reporting Council said its investigation would
look at KPMG's audit of Rolls-Royce Group's financial statements
for the year ended December 31, 2010, and of Rolls-Royce
Holdings' for the years ended December 31, 2011 to December 31,
In January, a court in Britain approved an agreement between
the Serious Fraud Office (SFO) and Rolls-Royce, known as a
deferred prosecution agreement or DPA, that allowed the company
to pay to settle a bribery probe with British, U.S. and
"The decision to investigate follows the SFO announcement on
17 January 2017 of a Deferred Prosecution Agreement between the
SFO and Rolls-Royce PLC which relates to offences including
conspiracy to corrupt and a failure to prevent bribery," the FRC
said in a statement.
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," KPMG said in a statement.
KPMG will stand down as Rolls-Royce's auditor this year
after 26 years, the spokesman said. Under new rules, overseen by
the FRC, companies are requested to consider changing their
auditor every 10 years.
The FRC has powers to fine accountants and ban them from
($1 = 0.7765 pounds)
(Reporting by Huw Jones. Editing by Jane Merriman)