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SA accountancy body: We have no mandate to probe KPMG

Sep 21 2017 14:52

Cape Town - The South African Institute of Chartered Accountants (SAICA) on Thursday denied media reports that it was planning to investigate auditing firm KPMG. 

New KPMG CEO Nhlamu Dlomu on Wednesday announced an agreement with the SAICA to set up an "inquiry" into KPMG SA, in the hopes of regaining SA's trust.

"What this would be is an additional assurance lens to ensure that the public in South Africa can truly see that we have opened up our doors. We want to be clear about what has happened," Dlomu said in an interview with Bruce Whitfield on the Money Show on 702 and CapeTalk.

But the day after the interview aired, SAICA in a statement said it "does not have the legal mandate to lead independent inquiries into the conduct of audit firms".

Dlomu replaced former KPMG CEO Trevor Hoole who resigned along with 7 other executives on Friday over work the auditing firm had done for Gupta-owned companies.

The auditor also announced it was withdrawing the conclusions of its controversial "rogue unit" report, and offered to pay back the R23m fee it was paid for the report to the SA Revenue Service.  

No mandate 

In its statement SAICA said that the Independent Regulatory Board for Auditors (IRBA) was already conducting an independent investigation into KPMG SA. 

"We call on the market to respect the IRBA’s due process, as required by its legislation, and allow it to run its proper course," it said, adding that the IRBA’s mandate included protecting the financial interests of the public. 

The IRBA is a statutory body established to protect the financial interests of the public.

In an update on it the status of its KPMG investigation earlier in the week, the IRBA said the investigation was ongoing. 

"The IRBA cannot at this point give an indication of how long the investigation will take nor what the complete list of allegations will cover. It is, however, committed to performing a robust investigation in as short a time as reasonably possible to deliver on its mandate to serve the public interest," it said. 

The IRBA's investigation is separate from an investigation carried out by KPMG International. 

The auditing firm released some of the findings of its own investigation on Friday, which included Dlomu's promotion. 

"While the investigation did not identify any evidence of illegal behaviour or corruption by KPMG partners or staff, this investigation did find work that fell considerably short of KPMG’s standards," KPMG International said. 

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