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Old Mutual appoints Deloitte as joint auditor in a blow to scandal-hit KPMG

Old Mutual says there were unresolved challenges related to its sole auditor, KPMG, for nearly two decades.

South African insurer Old Mutual has appointed Deloitte as joint auditor alongside scandal-hit KPMG, it said on Thursday, an unusual move reflecting what it said were unresolved challenges related to its sole auditor for nearly two decades.

KPMG’s South African unit is battling to restore its reputation after becoming entangled in a corruption scandal involving the Gupta family, who have been accused of using their links with former president Jacob Zuma to amass wealth.

The Guptas and Zuma have denied any wrongdoing.

“Old Mutual has been continuously engaging with KPMG International and KPMG South Africa on concerns regarding the ongoing challenges raised in their South Africa business,” Old Mutual said. “Until these challenges are resolved, Old Mutual believes it is prudent to appoint a joint auditor.”

KPMG has been losing clients over the last year after its own inquiry found flaws in work it did for the Guptas and the national tax agency.

Its woes deepened in April after failing to spot a crippling hole in smaller lender VBS Mutual Bank, a collapsed bank in which it was also revealed two of KPMG auditors had undisclosed loans.

Last month, KPMG unveiled plans to cut 400 staff and close small regional offices in response to a reduced number clients.

 

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‘’When all you have is a hammer, all your problems start to look like nails’’
Abraham Maslow (1908-70)

KPMG – you sent JCI a letter dated, March1, 2018 advising them that a ‘’further Reportable Irregularity have been lodged with the IRBA – which they needed to respond on.
JCI, inter alia responded that your (read KPMG) inability to confirm when you would be in a position to proceed with the audit has delayed the process etc. Furthermore, JCI places it on record that they require you (read KPMG) to respond with clarity and confirmation pertaining to this issue, as you received repeated communication from them!
Methinks KPMG should also remember that they got ‘’paid’’ a lot of money (R 66 million) as auditors and ‘’advisers’’ at JCI and Randgold..
To date KPMG only provided an ‘’Independent Auditors Report “stating that the ‘’Group Financial Statements’ ‘has been prepared in accordance with ‘’the basis of preparation’’, a meaningless phrase! It was NOT prepared according to IFRS and the Companies Act.
Which begs the question KPMG – are you now in such a corner with ‘’Kebblegate/Investecgate audits, that they only way out is to ‘’withdraw’’ all previous audits and face the music?

End of comments.

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