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Johannesburg- Wits University will not be renewing its contracts with audit firm KPMG, which are set to lapse at the end of the year.
According to a statement issued by the university on Wednesday, KPMG provided internal auditing and risk management services to the university.
This decision comes following a meeting on September 29 between the members of the University Council’s Audit and Council Risk committees, current CEO Nhlamu Dlomu and international KPMG representatives. Wits executive managers met with KPMG representatives a few weeks earlier, prior to this meeting.
The university said that the committees deliberated “long and hard” on the matter.
“The committees acknowledged that KPMG did take some actions, including releasing the CEO, COO and a number of senior partners to mitigate the reputational damage that it suffered as a result of its relationship with Gupta-associated companies and its complicity in the SARS (South African Revenue Service) report but felt that KPMG had not gone far enough,” the statement read.
- READ: Why KPMG should fall
“Further, it was agreed that KPMG had not been sufficiently transparent and that it is hard to reconcile KPMG’s conclusion that no one did anything illegal, when senior individuals have been dismissed and the SARS report has been retracted," said vice Chancellor Professor Adam Habib.
The council believes the company should have taken on programmes to “correct the wrongs” done to individuals and institutions, and that an independent investigation should have been initiated.
PriceWaterhouseCoopers remains the university’s external auditors.
Sasfin Wealth was one of the first firms to drop KPMG as its auditor and JSE sponsor after 18 years of service, after the firm was implicated in the #GuptaLeaks.
Hulisani Ltd and Munich Re have also stopped using the company's services.
Previously, economist Iraj Abedian called for further corrective action to be taken against the firm. He also called on corporates and other businesses to boycott the company. Abedian had resigned from the Munich Re of Africa directorate, as the company initially refused to stop using KPMG’s services.
Former finance minister Trevor Manuel, who was speaking at the Deloitte Risk Conference 2017 on Tuesday, said that the auditing profession needs time to heal. He said it would be a “profound tragedy” for risk management going forward if another audit firm had to go down.
“To lose the top nine people as KPMG has done, and with it a collective 400 years of experience of the profession, is a big decision. A big decision that ought to lay the basis for a new beginning.”
Deloitte Africa CEO Lwazi Bam, who also spoke at the conference, said that the auditing profession as a whole needs introspection to fix what is wrong.
Bam said that society’s expectations of the profession have changed and it is not enough just to comply with standards.
“What we get from society, expectations are higher. We as a profession must respond and we must respond adequately.”
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