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AVI to terminate KPMG as auditor in wake of Gupta scandal

Company says ‘termination will be effective on the close-out of all matters pertaining to the 2017 financial year-end audit.’
AVI is the latest company to drop KPMG following the Gupta scandal. Picture: Shutterstock

AVI, a South African distributor of consumer goods, will stop using KPMG as an external auditor after the accounting firm admitted to falling short of its own standards when doing work for the politically connected Gupta family.

“The board of AVI has considered the information relating to KPMG and certain of its past activities that is currently available to it, and has concluded that it is appropriate to give notice to KPMG,” the Johannesburg-based company said in a statement on Friday. “The termination will be effective on the close-out of all matters pertaining to the 2017 financial year-end audit.”

AVI, which has a market value of R34 billion ($2.5 billion), becomes one of the largest South African companies to drop KPMG after Munich Re of Africa, Sasfin Holdings, Sygnia Asset Management and Hulisani announced they will stop using the firm’s services. The country’s biggest banks and largest insurer are also reviewing their continued use of KPMG. 

Read: Wits University drops KPMG as auditor

KPMG International said last month that the local business will face an independent inquiry after an internal investigation into the work done for companies associated with the Guptas. Eight senior executives quit in the wake of the findings even though KPMG didn’t find evidence of illegal behavior or corruption. The internal probe also resulted in KPMG South Africa withdrawing the findings of a report about a so-called rogue unit at the Revenue Service.

The firm is being probed by the country’s regulatory body for auditors and the South African Institute of Chartered Accountants for the work it did for the Revenue Service and the Gupta family, who have been accused of using their friendship with President Jacob Zuma to wield undue influence over state contracts and cabinet appointments. The Guptas and Zuma have denied wrongdoing.

Read: Sarb has not instructed banks on ties with KPMG

© 2017 Bloomberg

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“Eight senior executives quit”- no they did not. They were paid to go!

golden handshake….actually should have been criminally charged? at least should be struck of the CA’s role?

KPMG (and KPMG international) says work done was substandard. Public is aware that work done was masking fraud.

Solve the crises by:
1. Charging the implicated auditors for fraud and those that signed off on the work as a start,
2. Hire those SARS officials that was asked to leave SARS under a cloud.
3. Apologise to the SA public.

‘’There is a general prejudice to the effect that lawyers are more honourable than politicians but less honourable than prostitutes. This is an exaggeration’’
Alexander King (1900-1965)

KPMG, Investec’s and TSec’s auditors were also appointed as both JCI (the thief) and Randgold (the victim) after Brett Kebble was removed as CEO of JCI and Randgold in August 2005, KPMG were also being auditors at Western Areas, Kebble’s main personal interest and ultimate beneficiary of a significant chunk of the funds raised on Randgold’s stolen shares!
KPMG’s astronomical fee for the JCI and Randgold audit alone was a staggering R 66 million (JCI 2006 to 2013 – R45 million) and Randgold 2005 to 2014 R 21 million).
KPMG methinks sold their sole for these fees, by facilitating and turning a blind eye to accommodate Investec and other cronies in the billions that was lost!
KPMG, hear no evil, see no evil and speak no evil.When will the truth come out …now that the ‘’top layer’’ is no longer around to cover this up? (My views on all the information out in the public domain).

End of comments.

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