KPMG'S EXTENDED AUDIT package has been given the green light by the Financial Reporting Council's Audit Inspection Unit in its recent annual review.

Inspectors found "no adverse impact on audit quality", and concluded that all the relevant ethical standard requirements had been met by the firm.

Head of UK audit Oliver Tant is the architect behind the package, which caused much controversy when it was first sold to Rentokil in 2009.

Last month, Accountancy Age sources indicated that the AIU would look favourably upon the product. In its 2009/10 report, inspectors concluded: "It appeared that these services were more in the nature of an extended audit rather than a traditional internal audit"

In light of the publicity the issue attracted, this year's inspection examined the audit of two entities using the service but found little to comment on, as evidenced by the four-line entry in KPMG's report.

Critics have in the past warned against external auditors providing internal audit-style services, saying it compromises independence and risk controls.