Auditor-General cancels all contracts with KPMG

Following recent spate of scandals to hit the auditing firm.
Auditor-General Kimi Makwetu cancelled all KPMG contracts with immediate effect on Tuesday. Picture: Moneyweb

South Africa’s Auditor General said on Tuesday he is terminating all contracts with auditing firm KPMG over a string of recent scandals that have cast doubt over the international audit firm’s professional and ethical conduct.

The global auditor has been under close scrutiny since 2017 over work done for a company owned by the Gupta family — who have been accused of using their links to former president Jacob Zuma to influence government decisions and the awarding of tenders — and more recently for small lender VBS Mutual Bank.

The Guptas and Zuma have denied any wrongdoing.

KPMG South Africa has previously said it was not involved in and did not condone any alleged money laundering activities linked to the Gupta-owned Linkway Trading company.

The firm’s officials were not immediately reachable for comment.

KPMG South Africa is reviewing work done by its partners in the wake of the resignation of two partners who faced disciplinary charges, its chief executive said on Sunday, another setback for the firm whose work is under scrutiny by authorities.

“Recent media reports relating to the external audit of VBS Mutual Bank and the conduct of KPMG audit partners are some of the reasons that prompted the decision to withdraw all KPMG audit mandates with immediate effect,” Auditor General Kimi Makwetu said in a statement.

“These terminations are not a judgement on the capabilities or integrity of the professionals that work in the firms, but are recognition of the significant reputational risks associated with matters that affect them at present.”

South Africa’s Independent Regulatory Board for Auditors (Irba) has referred a former KPMG employee to a disciplinary hearing over the work carried out for Linkway.

More on KPMG’s troubles below:

KPMG admits partners took undisclosed loans from VBS

KPMG tackles another scandal

Is the local auditing profession in crisis?

COMMENTS   5

Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in and an Insider Gold subscriber to comment.

SUBSCRIBE NOW SIGN IN

KPMG in South Africa must follow the same fate as Bell Pottinger in the UK. They have lost all credibility, which is a must when doing Audits. I have pity for their honest staff!?

Maybe a few jail sentences will concentrate the minds of the remaining auditors.
Is the rot confined to one company?

And rightly so …my views:

Methinks they have now finally been ”find out”….their shenanigans, starting with the JCI debacle in the early 2000’s, by shamelessly and arrogantly contravening the Companies and FICA ACT by not issuing compliant financial statements in line with International standards etc…

Most reputable listed companies, like banks, will now have to follow suit – tell them to make like ”Donald and Duck”

The VBS Mutual Bank debacle must surely be the ”cherry on the cake”…

Its about time Rob Davies has a look at whether firms should be restricted to operate in a vertical profession rather than horizontal profession or trade. Conflict of interest may be a cause for firms like these not being able make a clear decision as the disclosure will possibly expose another divisions doings…

Corporate South Africa is more CORRUPT than Government…

All of them.

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

Subscribe to our mailing list

* indicates required
Moneyweb newsletters

Instrument Details  

You do not have any portfolios, please create one here.
You do not have an alert portfolio, please create one here.
INSIDER SUBSCRIPTION APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING

Follow us:

Search Articles:
Click a Company: