Wits latest to snub KPMG

AUDITOR ‘HAD NOT GONE FAR ENOUGH TO MITIGATE DAMAGE’ Positive actions had been firing CEO and senior executives after Gupta dealings, said vice-chancellor.

Embattled auditing firm KPMG suffered another blow when the University of the Witwatersrand yesterday announced that it would sever its ties with the firm at the end of the 2017 financial year. Wits Vice-Chancellor Professor Adam Habib said the university’s council believed the organisation had not gone far enough in mitigating the damage done to its reputation caused by its association with Gupta-linked companies and its complicity in the SA Revenue Service (Sars) rogue unit report – although it had taken some actions, including firing its CEO and other senior partners in SA.

“It was not sufficiently transparent and it’s hard to reconcile its conclusion that no one did anything illegal when senior individuals have been dismissed and the Sars report has been retracted. Given these considerations, we felt that the university cannot continue its relationship with KPMG,” Habib said.

“We would have preferred had it recognised and acknowledged its ethical and legal lapses and embarked on a programme to correct the wrongs that had been done to individuals and institutions.”

The university council resolved on September 29 not to renew contracts with KPMG for internal auditing and risk management services once the contracts lapsed at the end of the year.

The university said the decision followed a meeting with the current CEO of KPMG, international KPMG representatives and members of the university’s audit and council risk committees.

The council also believed that an independent investigation should have been initiated at the outset.

PWC will remain the university’s external auditors.

KPMG fired its South African leadership after it found work the auditing firm had for Gupta-owned companies “fell considerably short” by its standards.

Parliament last month said its medical scheme Parmed would cancel its contract with KPMG and said it was reviewing its other contracts with the auditing firm.

Companies such as financial investment firm Sasfin and international reinsurer Munich Re’s African unit have also cut ties with KPMG and the Democratic Alliance said it would review KMPG’s work in the 30 municipalities it governed.

The SA Reserve Bank has however cautioned South African firms not to cut ties with KPMG, which was one of only four major auditing companies in the country.

The Independent Regulatory Board for Auditors told parliament on Tuesday it would take 18 months to conclude its probe into KPMG, but would not be rushed by public interest. –