Tuesday, August 23, 2005
The Washington Post reports (here) that the deferred prosecution agreement between the government and KPMG is nearing completion. The Post states that the firm will pay between $300 and $500 million ($400 million as the over-under line?) and have an outside monitor to review the firm's activities and file reports. These have become the standard terms of such agreements (Time, Inc. and Bristol-Myers Squibb are recent examples of such provisions), and will allow KPMG to avoid the fate of fellow public accounting firm Arthur Andersen. Look for a high profile law firm to receive the lucrative assignment as outside monitor.
Once the deferred prosecution agreement is in place, KPMG will have to defend the many lawsuits filed by former clients who purchased its tax shelters (see earlier post here). The government is likely to disclose any criminal cases against former KPMG tax partners shortly after a public announcement of the final agreement. (ph)