LONDON Aug 1 Britain's accounting watchdog has
dropped its probe into KPMG over its audits of BAE
Systems in connection with past corruption allegations
at the UK defence contractor.
The Financial Reporting Council (FRC) said in a statement it
has closed the inquiry it began in 2010 because it would have to
include audits done before the 1997 to 2007 period it originally
These years cover commissions paid by BAE to third parties
in arms deals and BAE paid nearly $450 million in 2010 to settle
a transatlantic bribery investigation by U.S. and UK
The FRC said any sanction against KPMG would have to be
approved by an independent tribunal and there was no realistic
prospect it would make an adverse finding on work done so long
ago if earlier years were also included.
It was therefore not in the public interest to extend the
probe to before 1997, the FRC said in a statement.
KPMG said on Thursday it had said in 2010 it did not believe
there had been any act of misconduct at the auditor and that it
would cooperate fully.
"We have done so and we welcome the announcement by the
Financial Reporting Council that the case has been closed and
that no further action is proposed," a KPMG spokesman said.