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Wednesday, August 24, 2005

More KPMG News

Eight former KPMG (KPMG.UL: Quote, Profile, Research) executives are expected to be indicted within days by U.S. authorities over past sales of tax shelters by the Big Four accounting firm, which itself has reached a settlement agreement, a lawyer involved in the case said on Wednesday.

The world's top three accounting firms -- which acted like frenzied sharks when Arthur Andersen LLP was bleeding three years ago -- are taking a much more benign approach to their wounded rival KPMG LLP. Industry sources said yesterday that the three -- Deloitte & Touche LLP, Ernst & Young LLP, and PricewaterhouseCoopers LLP -- have told their partners not to poach clients or personnel from KPMG while it struggles with potentially crippling legal problems.

KPMG LLP is nearing agreement on a deal with federal prosecutors that would avert an indictment against the nation's fourth-largest accounting firm for its sale of abusive tax shelters, according to sources familiar with the pact. The agreement calls for KPMG to pay between $300 million and $500 million and to open its operations to independent review as a condition for avoiding prosecution, according to people briefed on the deal

KPMG and U.S. authorities are close to finalizing a legal settlement over past sales of tax shelters by the Big Four accounting firm, the Financial Times reported on its Web site on Monday.

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