KPMG to exit US federal audit business
Tweet
Share
E-mail
The logo of KPMG, a professional service company is pictured during the Viva Tech start-up and technology summit in Paris, France, May 25, 2018. REUTERS/Charles Platiau
By Hyunsu Yim and Heera Hari
April 29 (Reuters) - Big Four firm KPMG is exiting its federal government audit business and will redeploy staff, a spokesperson said on Wednesday.
KPMG was transitioning out of federal audit roles through a "multi-year process" and will be redeploying federal audit professionals across the firm to meet client needs, a spokesperson told Reuters in an email, declining to give further details.
The Financial Times reported earlier on Wednesday that the firm will redeploy more than 450 U.S. staff after losing a $60 million-a-year contract with the Pentagon.
The U.S. Army was the largest single customer of KPMG’s federal audit practice, the report said, adding that the firm is also winding down contracts with other parts of the government.
A spokesperson for the Pentagon did not immediately respond to a request for comment.
In a video posted on X this week, U.S. Defense Secretary Pete Hegseth said the Pentagon was slashing the number of disjointed separate audits by two-thirds, and would bring in a "world class accounting firm" as group auditor.
KPMG had audited the U.S. Army for almost a decade; however, the defense department now plans to use a new accounting firm to oversee a larger proportion of the military’s accounts, according to the FT report.
There has been mounting bipartisan criticism of the Pentagon's financial accountability problems, after it failed an annual audit last year, for the eighth year in a row.
Some KPMG staff have already been placed in alternative roles, while others will shift to new jobs between now and the end of the final federal contract in 2030, the FT said.
The Pentagon's first audit was conducted in 2018 and consistently failed, reflecting persistent system and accounting problems across its vast bureaucracy. Lawmakers have set a 2028 deadline for the department to pass an independent audit.
(Reporting by Akanksha Khushi and Heera Hari in Bengaluru and Hyunsu Yim in Barcelona; Editing by Rashmi Aich, Kirsten Donovan)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Austrian court convicts ex-intelligence chief in Syria's Raqqa of torture
- Exclusive-War threatens Russian banking crisis, European intelligence report says
- AI investors may pivot to hyperscalers from chipmakers, Morgan Stanley says
Create E-mail Alert Related Categories
ReutersSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
