Stuart Brown, the inspector-general for the US-led occupation authority in Iraq, on Thursday said that aside from questions raised about hotel costs and the purchase of trucks, a broad audit would soon begin focusing on costs for services KBR provided.
KBR's work in Iraq, which could mean up to $18 billion in business for the Texas-based company, is already under scrutiny by investigators at the Pentagon, who are looking at whether the firm overcharged for fuel brought into Iraq.
Military auditors and KBR have also been at loggerheads over the cost of feeding troops.
The company argues danger in Iraq has driven up costs.
"I think the danger drives security costs but not for everything else. Their security costs are high because of the danger and that is to be expected, but tying the loss of life to costs is inappropriate," Brown said.
Halliburton, run by Vice-President Dick Cheney until 2000, is the US military's biggest contractor in Iraq, providing services ranging from laundry to oilfield repair.
Asked about the ongoing audits, Halliburton spokeswoman Wendy Hall said "cost of security is a part of every dollar spent in Iraq whether it is for vehicles, shelter or equipment."
KBR has lost more than 30 employees and sub-contractors in Iraq.