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KPMG investigation widens

Jan 14 2018 17:57

Cape Town - The investigation by the Independent Regulatory Board for Auditors (IRBA) into audit firm, KPMG has now extended beyond the initial investigation, the IRBA said in a statement on Friday.

The IRBA said its investigation into KPMG is is multi-faceted and has extended into a number of lines of investigation, beyond the initial investigation into the audits of Linkway Trading and the SA Revenue Service (SARS) Report.  

The IRBA pointed out that its investigation is completely independent of the Ntsebeza inquiry initiated by the SA Institute of Chartered Accountants (SAICA).  

"At the time that SAICA indicated it would pursue an independent enquiry, the IRBA cautioned of possible confusion in the marketplace about the nature, scope and findings of two different investigations, or that the market may conflate the two," the IRBA said.

It reiterates that it has no involvement in the Ntsebeza inquiry and will continue its own investigations following its due process in accordance with the Auditing Profession Act.

"In the KPMG matters, the IRBA can confirm that one of the lines of investigation is nearing completion and will be tabled at the upcoming investigating committee, while others are progressing satisfactorily," the IRBA said.

"In two matters, information which was requested from KPMG remains outstanding and the IRBA continues to engage with KPMG to obtain the information necessary to complete these investigations."

With respect to the SARS matter, the IRBA said it has engaged with SARS Commissioner Tom Moyane and most of the information was received subsequently.

"The IRBA is confident that the additional information will be supplied in due course. This is consistent with the IRBA’s powers under its act to request any information necessary to perform its investigations," it concluded.

In October last year the IRBA told Parliament it is "likely" to investigate the conduct of the individual auditor who signed off on the forensic investigation into the so-called "rogue unit" at SARS.

Fin24 reported in June last year that the IRBA announced that it would launch an investigation into the 2014 audit of Linkway Trading. This is the company which played an important role in allowing the diversion of cash earmarked for the Free State’s Vrede dairy project to reimburse most of the wedding expenses of the Gupta family.

At the time IRBA told Parliament that it will liaise with SAICA to make sure there are no overlaps in the investigative processes.

The maximum sanction that IRBA can apply is to withdraw the licence of an auditing firm. So far it has only revoked the licences of individual auditors.

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saica  |  kpmg  |  sars  |  irba  |  financial services
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