Gigaba should give KPMG work to black auditors - PPF | Fin24
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Gigaba should give KPMG work to black auditors - PPF

Sep 27 2017 08:21

Cape Town - Minister of Finance Malusi Gigaba should allocate all work currently done by auditors KPMG for government departments to wholly black-owned small and medium sized auditing firms, with a preference for women-owned firms, according to the Progressive Professionals Forum (PPF).

The PPF, which has Mzwanele Manyi as its president, said in a statement that it welcomed last week's announcement by Gigaba that all government departments must review their work with KPMG. This followed the auditing firm's recent withdrawal of the conclusions of its so-called 'rogue unit' report for the SA Revenue Service (SARS).

"The current debacle by KPMG with SARS indicates that other auditing firms may also be involved in unethical practises and their reports may lack the necessary and expected credibility," said the PPF's deputy secretary general Zinhle Cele.

It called for an independent inquiry into the work of KPMG for government and state-owned enterprises (SOEs) dating back to 1994. The PPF also wants government and SOEs to cease all work with KPMG until the completion of such an inquiry.

"PPF reiterates its call on all progressive professionals in the private and public institutions to exercise procurement spend to be biased towards the black owned small and media auditing firms," said Cele. 

City Press reported on Sunday that KPMG lost four private sector clients last week and that at least 13 other private companies were reviewing their relationship with the auditor.

JSE-listed Deneb Investments has followed in the footsteps of Sygnia Asset Management, Sasfin bank and energy investment company Hulisani in dropping the auditors, costing KPMG an estimated total of more than R4m in audit and other fees a year, according to City Press.

Absa, African Oxygen, Bidcorp, DRDGold, Esor, Gaia Infrastructure Capital, Interwaste Holdings, Investec, Lonmin, Randgold & Exploration, Sibanye Stillwater, Vunani and Wesizwe Platinum, meanwhile, all told City Press they were reviewing their relationship with KPMG.

The loss of these 13 clients would cost KPMG, which employs about 3 600 people in SA, in the region of R278m in annual audit fees.

The board of Business Leadership SA, meanwhile, on Friday announced it was suspending KPMG’s membership, pending the outcome of an independent investigation into its involvement in conduct related to state capture.

KPMG International also announced on Friday that a new independent investigation has been launched into KPMG SA’s work for the Gupta family and its role in authoring the controversial SARS ‘rogue unit’ report.

The global auditing firm’s chairperson John Veihmeyer said the investigation would be led by a senior SA legal figure who was “completely independent” of both KPMG South Africa and KPMG International.

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