News October 2010 AADB investigating auditors' conduct in relation to BAE Systems plc

AADB investigating auditors' conduct in relation to BAE Systems plc

25 October 2010

 

AADB PN 26


The Accountancy and Actuarial Discipline Board has begun an investigation under its Accountancy Scheme into the conduct of KPMG Audit plc as auditors to BAE Systems plc.

The scope of the investigation is as follows:

“The conduct of Members and Member Firms in relation to:

The audits of British Aerospace / BAE Systems Group plc and any of its subsidiaries by KPMG from 1997-2007 in relation to the commissions paid by BAE through any route to subsidiaries, agents and any connected companies. Also any other professional advice, consultancy or tax work provided to BAE by KPMG between those dates in respect of (i) commission payments paid by BAE and (ii) the status, operation or disclosability of Red Diamond Trading Ltd., Poseidon Trading Investments Ltd. and Novelmight Ltd.”

This decision was taken following consultation with the Institute of Chartered Accountants in England and Wales (ICAEW).

Notes to Editors
 
  1. The Financial Reporting Council (FRC) is the UK’s independent regulator responsible for promoting high quality corporate governance and reporting to foster investment. Its functions are exercised principally by its operating bodies (the Accounting Standards Board, the Auditing Practices Board, the Board for Actuarial Standards, the Financial Reporting Review Panel, the Professional Oversight Board, and the Accountancy and Actuarial Discipline Board) and by the FRC Board. The Committee on Corporate Governance assists the Board in its work on corporate governance.
  2. The Accountancy and Actuarial Discipline Board ("AADB") is the independent, investigative and disciplinary body for accountants and actuaries in the UK. The AADB is responsible for operating and administering independent disciplinary schemes for these professions. The Accountancy SchemeAccountancy Scheme covers Members of the following accountants' professional bodies:- the Association of Chartered Certified Accountants, the Chartered Institute of Management Accountants, the Chartered Institute of Public Finance and Accountancy, the Institute of Chartered Accountants in Ireland, the Institute of Chartered Accountants of Scotland and the Institute of Chartered Accountants in England and Wales. The Actuarial Scheme covers Members of the Institute and Faculty of Actuaries.
  3. The focus of the AADB is on cases which raise important issues affecting the public interest; other disciplinary cases will continue to be dealt with by the relevant professional body. The purpose of an investigation is to determine whether there is evidence of misconduct on the part of Members or Member Firms of the professional bodies. An investigation does not always mean that an allegation has been made or that there is evidence of misconduct on the part of the Member or Member Firm involved.
  4. Disciplinary complaints filed following an AADB investigation are heard by an independent Tribunal which will normally sit in public. If the Tribunal upholds a complaint, there is a wide range of sanctions which it can impose including an unlimited fine, exclusion from membership of a professional body covered by one of the Schemes and withdrawal of practising certificates or licenses.
Document created under a former FRC operating body.

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