KPMG admits to past tax misdeeds

US federal prosecutors have built a criminal case against KPMG and are debating whether to file charges, the Wall Street Journal reported.

KPMG, one of the “big four” global accounting firms, said on Thursday it was in talks with the US Justice Department and co-operating fully.

It said it took “full responsibility for the unlawful conduct by former KPMG partners” and deeply regretted it.

The talks centre on advice offered by KPMG over the use of tax shelters.

KPMG said the investigation focuses on services offered by the firm between 1996 and 2002. It no longer provides these services.

It said the inquiry was part of a wider US Justice Department investigation into the use of tax shelters, and the role of accounting firms, law firms and large banks in promoting them.

KPMG said those responsible for wrongdoing had left the firm and it had reforms in place to “ensure the highest ethical standards”.

It is hoping for “a resolution that recognises the significant reforms the firm has already made….while appropriately sanctioning the firm for its wrongdoing”.

“We are not elaborating” on the statement, said a spokesman for KPMG.

KPMG operates in 148 countries and has 6,500 partners. Altogether it has about 93,900 staff worldwide.