Auditor-general orders Mangosuthu University to dump KPMG
TROUBLED audit and professional services firm KPMG is facing another crisis after it emerged that the Mangosuthu University of Technology (MUT) has been asked to dump it.
This is advice from auditor-general Kimi Makwetu, according to a report by former University of South Africa vice-chancellor Professor Barney Pityana.
The report on an investigation into the affairs of the institution shows that as far back as 2009 issues were raised about the professional integrity of KPMG’s work as MUT’s external auditors.
“We have no record as to what action, if any, was taken to correct the breach in confidence that resulted therefrom,” reads the report.
It also states that it was even worse that MUT continued to find reason to commit to KPMG even when advised by Makwetu.
KPMG has come under fire after it emerged that it had done business with a number of companies owned by the controversial Gupta family.
Last month, the embattled audit firm KPMG announced that it would distribute R47 million in fees it got from auditing the books of Gupta-owned companies to 52 civil society and non-profit organisations in the education sector.
Last year, KPMG committed to donating fees earned from Gupta-related entities to education and anti-corruption non-governmental organisations on an equal split of just more than R20m each.
The company has also seen an exodus of staff from its South African operations including its former chief executive and senior partner Moses Kgosana who admitted that he attended the infamous Gupta wedding in Sun City in May 2013.
Some of its senior employees have been reported to the Independent Regulatory Board for Auditors (IRBA) for investigation.
KPMG has also been implicated in advocate Terry Motau’s VBS Mutual Bank “Great Bank Heist” report after they allegedly “turned a blind eye to irregularities and corruption at the bank”.
The company has acknowledged that failings at the firm have contributed to adverse perceptions about the audit profession and accepted responsibility to work towards redressing the situation.
“The controversy around the industry has undermined public confidence and this needs to be restored through thoughtful and constructive measures,” it said earlier this year.
Since last September, KPMG has undertaken far-reaching reforms which seek to put quality and integrity at its heart and has been in dialogue with the IRBA throughout that period and will co-operate closely with the regulator in line with its continuous process to monitor improvements to its operations, review the adequacy of the remedial actions it committed to.
“Revelations about VBS have unsettled clients and we recognise they require reassurance that KPMG remains a good firm to be associated with. We have already taken many steps ourselves, and we welcome the independent scrutiny of the IRBA,” the company promised.