Johannesburg: despite its several attempts to resolve the tarnished image, it keeps getting worse for the embattled auditing firm KPMG which did an external audit for VBS bank.
Jn a deepening crisis at the auditing firm, the Auditor- General Kimi Makwetu announced late on Tuesday afternoon that it was terminating all public sector auditing contracts with KPMG and Nkonki Inc.
The latter company, Nkonki, has recently come under the spotlight amid a scandal involving its former Chief Executive Mitesh Patel.His R107 Million “management buyout” of the black auditing firm was funded by Gupta linked Salim Essa. KPMG, of course, still has a hangover from its own Gupta-curse as well as the disastrous and discredited SARS Rogue Unit Report.
While Economist and Researcher Dr. Iraj Abedian say KPMG SA should be shut down, while Price Water Coopers must face the music from the authorities.
The Auditor General continues to reiterate that as the country’s supreme audit institution that audits South Africa’s public sector, the AGSA, due to the size of its audits, uses various private audits firms such as KPMG and Nkonki Inc to audit on its behalf and to augment its auditing staff.
He further states when conducting these audits, the contracted firms stringently follow AGSA auditing standards, which include layers of rigorous internal and external, independently quality assurances and peer reviews to ensure that quality work is produced.
Makwetu says recent media reports relating to the external audits 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.
On the termination of Nkonki Inc’s contract, Makwetu said recent media reports on a matter arising from the shareholder transactions involving the firmware of “grave concern and pose a significant risk on the reputation of my office through the statutory audits contracted” to Nkonki Inc.
The Auditor General further states that maintaining accountability in the country’s supreme audit institution, this country looks up to us to act and project an image of accountability, the same way we hold the entire public sector to account on how it uses taxpayers monies.