The U.S. Department of Justice and KPMG LLP today announced that they have reached a deferred prosecution agreement regarding KPMG’s sale of abusive tax shelters to individuals.
In addition to its tax practice, KPMG audits the financial statements of hundreds of public companies. As the organization charged with overseeing the audits of public companies, the Public Company Accounting Oversight Board is in the midst of the second year of annual, intensive inspections of KPMG’s auditing work. The PCAOB previously performed a limited inspection of KPMG’s auditing work. As Board members have stated in the past, and based on these inspections, the Board remains confident in KPMG’s ability to perform high quality audits of public companies.
The Board on July 26, 2005, adopted ethics and independence rules prohibiting registered public accounting firms from providing certain tax services, such as those described in the agreement and related documents, to audit clients and certain executives of audit clients.