Loading...

Auditor General not dropping KPMG

Sep 29 2017 16:53

Cape Town - The Auditor General (AG) has decided to not terminate the services currently provided to it by KPMG SA, it said in a statement on Friday.

But, for now, it will limit its relationships with the embattled auditor to audits already allocated to the firm.

"We have agreed to continue to formally engage with KPMG SA as they make progress in the areas already identified for immediate rectification," said AG Kimi Makwetu after meeting with KPMG SA's new leadership team. 

He said this state of affairs will be reviewed subject to the outcomes of the pending investigations into KPMG SA, which are set to probe the auditing firm's years-long work on behalf of the Gupta family and its report on the so-called SA Revenue Service (SARS) 'rogue unit'.

A week ago KPMG International announced a new independent investigation into KPMG SA, which will be separate from the global auditing firm's internal probe. 

Its international chairperson John Veihmeyer said the new investigation would be led by a senior SA legal figure who was “completely independent”.

Earlier this month KPMG SA withdrew the conclusions of its controversial "rogue unit" report, which drew criticism from SARS Commissioner Tom Moyane. On September 15, the auditing firm's top SA leadership also resigned.   

During a recent radio interview on CapeTalk, former finance minister Pravin Gordhan - who was SARS commissioner during the "rogue unit" period - described KPMG SA as a “willing participant in state capture”. He is seeking legal advice after KPMG retracted its report.  

KPMG SA has since lost a number of clients.

Meeting

Makwetu said in the statement that he and his team met with the new executive leadership of KPMG SA led by CEO Nhlamu Dlomu. 

"Our interest arises from certain audits we have allocated to KPMG to perform on our behalf where they express an opinion on financial statements that are largely our primary responsibility. We also source into our own audits specific skilled staff from KPMG SA where the primary responsibility for the audit report belongs to the Auditor-General," the AG said in the statement.

"To this end, we felt it necessary to engage with the leadership of KPMG SA on their report as one of those that purchase their services."

Makwetu said KPMG SA told hismand his team that they were "independent of the entities they audit". 

"We were assured that the events that led to the matters in the report are not indicative of a systematic breakdown of risk management and audit practice disciplines. We were also assured that the firm’s partners continue to be independent of the entities they audit," he said. 

SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.

Read Fin24's top stories trending on Twitter:

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest. 24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

auditor general  |  kpmg  |  gupta brothers  |  sa economy

NEXT ON FIN24X

 
 
 
 

Company Snapshot

We're talking about: MINI BUDGET

Finance Minister Malusi Gigaba's first budget speech will be a balancing act on more than just the numbers level.
 

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

New SAA board now has an aviation expert

Previous results · Suggest a vote

Loading...