KPMG South Africa faces existential threats
The South African unit of KPMG has lost one of its major clients. The AuditorGeneral of South Africa on April 17 terminated its contract with the audit firm, which has been embroiled in a series of scandals.
The KPMG LLP's local unit is also facing three probes. According to Bloomberg, “The Independent Regulatory Board for Auditors and the South African Institute of Chartered Accountants are both investigating the company, while a commission of inquiry has been set up by the government to probe allegations that the Gupta family siphoned off state money and influenced ministerial appointments.”
Sanctions for KPMG could range from fines to being forced to close down.
The firm's ordeal emanated from three evolving scandals: its public apology for work done for the allegedly corrupt Gupta family; withdrawal of the findings of a report about the country's tax authority; and interrogation of its staff who signed off on VBS Mutual Bank's accounts before it failed.
According to Bloomberg, some of South Africa's major banks, including Standard Bank Group, Investec Plc, and Barclays Africa Group Ltd are reviewing the situation to determining future relationship with KPMG.