‘KPMG needs mir­a­cle for it to sur­vive’

Weekend Argus (Sunday Edition) - - NEWS - SIYABONGA MKHWANAZI

KPMG’s woes wors­ened yes­ter­day af­ter the South African In­sti­tute for Char­tered Ac­coun­tants (Saica) sup­ported calls for a com­mis­sion of in­quiry into the au­dit­ing firm.

The calls came af­ter Fi­nance Min­is­ter Malusi Gi­gaba an­nounced that the gov­ern­ment would re­view all work done by the firm.

The DA has also said it would do the same in 30 mu­nic­i­pal­i­ties it gov­erns across the coun­try.

Econ­o­mist Iraj Abe­dian, of Pan African Cap­i­tal, warned yes­ter­day the gov­ern­ment re­view would ruin the com­pany.

“Ba­si­cally, KPMG needs a mir­a­cle to sur­vive. It’s al­most un­ten­able for it to con­tinue,” said Abe­dian.

Gi­gaba said: “In the im­me­di­ate term, and as a mea­sure to re­store con­fi­dence in au­dits, all of gov­ern­ment and its en­ti­ties must con­sider re­view­ing their work pro­grammes with KPMG, to en­sure that their au­dit pro­cesses have not been com­pro­mised in any way,” said Gi­gaba.

Saica said it wanted the com­mis­sion of in­quiry to be headed by a judge.

Saica chief ex­ec­u­tive Ter­ence Nombe­mbe, who is the for­mer Au­di­tor-Gen­eral, said they did not down­play the work done by the In­de­pen­dent Reg­u­la­tory Board for Au­di­tors to probe KPMG.

“Saica has re­ceived wide­spread re­quests from its stake­hold­ers in­clud­ing Saica mem­bers, sig­nif­i­cant play­ers in the busi­ness and civil so­ci­ety as well as the gen­eral pub­lic to take a strong stand against un­eth­i­cal be­hav­iour by its mem­bers,” said Nombe­mbe.

Busi­ness Lead­er­ship South Africa (BLSA) also an­nounced that it has sus­pended KPMG pend­ing an in­ves­ti­ga­tion into the com­pany.

This fol­lowed the en­gage­ment be­tween the or­gan­i­sa­tion and the firm.

BLSA said: “We are deeply con­cerned by the un­eth­i­cal and un­pro­fes­sional con­duct that KPMG en­gaged in in South Africa. The firm be­came party to the pro­ject of ‘state cap­ture’, which has harmed our coun­try, vic­timised cer­tain in­di­vid­u­als and dam­aged the rep­u­ta­tion of busi­ness.” BLSA chief ex­ec­u­tive Bo­nang Mohlale said those who vi­o­lated the law must be pros­e­cuted.

For­mer fi­nance min­is­ter Pravin Gord­han and his ex-deputy Mce­bisi Jonas also met the KPMG del­e­ga­tion. Gord­han called on KPMG to be open about what has gone on there.

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