The US government will set up an inquiry into the no-bid Iraq contracts given to Halliburton, the company once run by Vice President Dick Cheney.
Halliburton's Iraq contracts are an election issue
The move is the latest embarrassment for the firm, which faces losing its Iraq contracts with the US Army.
Halliburton's Iraq deals had been criticised by the International Advisory Monitoring Board, a UN group monitoring the use of Iraq's resources.
Meanwhile, a Halliburton affiliate faces a probe by Nigeria's parliament.
Portugal-registered TSKJ comprising Technip of France and Snamprogetti Netherlands faces allegations of bribery.
Halliburton acquired the firm in 1998.
The special audit of Halliburton's Iraq contracts will investigate:
the extent of no-bid contracts funded by Iraqi oil revenue;
previous US government audits relating to the company;
and whether any of Halliburton's contracts have not yet been audited.
Halliburton has denied any wrongdoing.
News of the investigation was made public by the International Advisory Monitoring Board, set up by the UN to oversee the use of Iraq's resources during the occupation of the country by US-led coalition forces.
The board also released an audit of Iraq's oil accounts during the final six months of the US occupation.
Accountants KPMG, who carried out the review on behalf of the board, expressed concern about the occupation authority's recording of cash receipts and oil export revenue.
The board previously had accused the Coalition Provisional Authority of inadequate management of Iraqi oil money, and failure to safeguard against corruption.
Halliburton has been criticised for alleged overcharging for its services as well as winning the reconstruction contracts as a result of contacts with the Iraq administration.
Mr Cheney led the firm between 1995 and 2000, and Halliburton's operations in Iraq have become an issue in the presidential election campaign.