KPMG South Africa faces ex­is­ten­tial threats

Financial Nigeria Magazine - - Development -

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.

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