Spat erupts over right to audit KPMG

SACC caught in middle as rival accounting bodies square off

ACCOUNTING bodies are at each other’s throats over the investigations into KPMG with each claiming territorial authority over the matter. The fight between the Independent Regulatory Board for Auditors (IRBA) and the South African Institute of Chartered of Accountants (Saica) came as a church body asked the latter to intervene.

The IRBA has come out guns blazing, saying Saica has no legal authority to investigate KPMG.

It said it had the legal mandate to do the job and would soon be reporting to Parliament. The standing committee on finance also announced this week it would get a briefing from the IRBA on its KPMG probe.

The IRBA launched the investigation in June when the scandal broke but will report back to Parliament on October 3.

However, Saica announced on Wednesday it would conduct an inquiry into the auditing firm.

“We confirm that Saica, as the member body, does not have the legal mandate to lead independent inquiries into the conduct of audit firms, and further confirm that the IRBA will follow its due process in terms of its founding legislation to draw the investigation to its rightful conclusion as quickly as possible,” said the IRBA.

“We call on the market to respect the IRBA’s due process, as required by its legislation, and to allow it to run its course,” it said.

But the SA Council of Churches (SACC) yesterday called on Saica to probe KPMG.

New KPMG chief executive Nhlamu Dlomu announced a few days ago that they would launch an independent investigation into the company. However, the SACC insisted it wanted Saica to get involved in the matter.

“The SACC has written to the Saica, urging for this additional comprehensive professional inquiry. This is necessary for the thousands of employees who otherwise will now always work under a cloud. This is necessary for the SA Revenue Service saga to also be able to reach its clarifications in the interests of the lives and careers of affected professionals, past and present,” said the SACC.

“The inquiry is necessary for this accounting industry of public trust to survive this episode. The South African accounting industry has been rated number one in the world for several years, a proud tradition. Indeed such a thoroughgoing inquiry will clean up the place, and empower the new chief executive, Nhlamu Dlomu, to deliver on her promise, to ‘regain the public’s confidence’. This is necessary for the common good,” it said.

KPMG has lost clients such as Sasfin and energy investment firm Hulisani, which cut their ties this week.

Other companies, such as Barclays, Nedbank, Investec and Old Mutual, said they were reviewing their relationship with the firm.

Sars has said it would meet the banks to discuss the matter.

The SA Reserve Bank has expressed its concern over the implications of KPMG collapsing.

The auditing firm is one of the big four auditors in the country and in the world.

CHURCH BODY WADES INTO BATTLE SAYING IT CALLED ON SAICA TO CONDUCT AN INVESTIGATION