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Institute of Directors cuts ties with KPMG

Follows in Sygnia’s footsteps to sever relationship following Gupta allegations.

The Board of the Institute of Directors in Southern Africa (IoDSA) has “temporarily” suspended all co-branded events with auditing firm KPMG following damning allegations of misconduct related to audits of Gupta-owned companies.

The body, representing all directors in South Africa, said it will make a final decision whether to suspend relations permanently once several investigations into the firm’s conduct have been completed.

There are currently two investigations on the go. One is an internal investigation by KPMG International and the other an investigation by the Regulatory Board for Auditors (Irba).

“The IoDSA Board will continue to monitor the matter until a standing decision can be made, based on factual findings in relation to the current allegations and media reports,” the statement read.

As a consequence of the decision, the IoDSA suspended KMPG’s sponsorship of its golf day scheduled for October 9 and suspended the audit firm’s involvement in the Audit Committee Forum.

A few weeks ago, asset management firm Sygnia cut ties with KPMG following media reports that KPMG did not pick up on serious irregularities during its audits of Gupta-linked companies.

The most pertinent of these is that KPMG did not pick up through its audit of Linkway Trading the R30 million earmarked for an agricultural development project in the Free State, which was diverted to pay for the infamous Gupta wedding in Sun City. 

The announcement triggered some reaction on Twitter:

 

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In Barry Sergeant’s words: “KPMG represents everything which is wrong with the audit profession”.

Interesting. One wonders whether Business Leadership South Africa will find its voice now that Magda and other individuals have shown the way?

My views:
Barry Sergeant, investigative financial journalist who recently died at the age of 58, methinks would have felt that all his views pertaining to KPMG are now vindicated.
Barry in the most exhaustive detail possible explained in his latest book how Investec Bank and KPMG covered up the world’s largest unprosecuted fraud which he in 2012 calculated to be R 26 billion (which by now has grown to at least R 38 billion).
Furthermore, he also claimed that Investec was involve in money laundering etc.
I am not surprised at all to see that so many local Banks so far did nothing or even attempted to suspend their KPMG relationships with KPMG.
If I was Investec or KPMG, I would very carefully watch the case/proceedings in the Supreme Court of Appeal on September 13, 2017, as a can of worms might just be opened for them, a bit further!

“Did you get your money by fraud? By pandering to men’s vices or men’s stupidity? By catering to fools, in the hope of getting more than your ability deserves? By lowering your standards? By doing work you despise for purchasers you scorn? If so, then your money will not give you a moment’s or a penny’s worth of joy. Then all the things you buy will become, not a tribute to you, but a reproach; not an achievement, but a reminder of shame.” ~ Ayn Rand

Ryk this s in line with my email sent to you and Mr Theo Botha two weeks ago about moral issue experienced in South Africa currently! I would love to hear both of you thoughts on my letter!

At last many areas in society are demanding integrity if business and government. This can only lead to the betterment of society everywhere over time!! A big thank you !!

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