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KPMG in probe over work with arms firm

Financial services giant KPMG is being investigated over work it completed for arms maker BAE Systems, the accountancy regulator has said.

The Accountancy and Actuarial Discipline Board (AADB) said it will look into audits made in relation to money paid by BAE to subsidiaries, agents and any connected companies between 1997 and 2007.

The AADB, the independent, investigative and disciplinary body for accountants and actuaries in the UK, said it would examine professional advice, consultancy or tax work provided to BAE by KPMG in the same period.

The AADB inquiry follows on from long-running bribery and fraud investigations by the Serious Fraud Office and the US Department of Justice.

In February, BAE said it would pay £286m in fines and plead guilty to making false statements and having irregular accounting practices in relation to deals made in Saudi Arabia and Tanzania.

It is understood the AADB investigation will look at KPMG's examination of BAE's accounts at the time the deals were made.

KPMG said: "The firm does not believe there has been any act of misconduct. It will be co-operating fully with the investigation."

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