It seems that global consultancy and Big Four audit firm KPMG will not now face criminal conspiracy charges – nor the fate of Arthur Anderse...

It seems that global consultancy and Big Four audit firm KPMG will not now face criminal conspiracy charges – nor the fate of Arthur Andersen post-Enron - after US prosecutors dropped the case, connected with illegal tax shelters.

This came after the accounting firm kept to the terms of its deferred prosecution agreement with the US government. In August 2005, KPMG had agreed to pay $456 million as part of the DPA in which it admitted to abusive conduct in the design and selling of certain tax shelters. The agreement expired in December 2006.

US Attorney Michael Garcia stated that dismissal of the charge was sought pursuant to the terms of the DPA and based on the report and recommendation of the appointed outside monitor. "The charges against KPMG may be reinstituted if it is determined that KPMG has violated any provision of the DPA," he said.

"The monitorship, which has been comprehensive and effective, will continue until September 2008, and may be extended if KPMG violates the DPA during the period of the monitorship."

Timothy Flynn, KPMG chairman and chief executive, said in a statement: "Today's dismissal of the charge reflects our commitment to full and continuing compliance with the agreement we made with the government in August 2005. We regret the past activities that led to these charges”.

He also referred to internal ethics and compliance programs that “will serve as a role model for the profession and enable us to serve our clients with the highest degree of professionalism".