JOHANNESBURG - KPMG yesterday denied claims by the Independent Regulatory Board for Auditors (IRBA) that the embattled firm had not fully co-operated with the probe into the 2014 audit of Linkway Trading, the Gupta company alleged to have laundered R30 million of government funds to fund a family wedding.
KPMG spokesman Nqubeko Sibiya said the firm was co-operating fully with the investigation. “KPMG is complying with all of IRBA’s requests for documents,” Sibiya said.
The rebuttals come after IRBA’s chief executive Bernard Agulhas told parliament in an update on its investigations into KPMG and other matters that KPMG had not been true to its earlier undertaking that it would fully co-operate with investigations against it.
Agulhas said the regulator met KPMG international chairperson-elect Bill Thomas and KPMG South Africa new chief executive Nhlamu Dlomu last month to discuss the investigation.
“On the same day, we also had a special board meeting so the board could instruct the secretariat on the process forward…after the board meeting, we issued another letter to the chief executive of the local unit of KPMG to remind them of the importance of submitting required information timeously and a list of documents we still required,” Agulhas said.
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Thomas who was appointed as KPMG’s international’s head earlier this year succeeded John Veihmeyer this month after the latter forced to publicly apologise over the scandal engulfing KPMG South Africa.
In June, the IRBA said that it had initiated an investigation into KPMG’s the 2014 audit of Linkway following media reports.
David Maynier, the Democratic Alliance Member of Parliament, on Tuesday said that the fact that KPMG South Africa had reportedly failed to fully cooperate with the investigation despite their promise was of concern.
Maynier said he has also formally requested the IRBA to extend the scope of the investigation to include the conduct of the auditor responsible for the forensic audit into the so-called SARS “Rogue Unit”.
On Monday Barclays Africa said it had put its relationship with KPMG on review and said it would reconsider its position as more information becomes available.
Agulhas said the IRBA had taken a decision to fast-track the investigation as it was in the public interest to conclude the matter expediently. Agulhas said the the probe into the spectacular collapse of African Bank in 2014 and the possible misconduct of auditors of the bank was nearing its conclusion.
“This month the IRBA’s investigation committee will make one of three recommendations to the disciplinary advisory committee which is to dismiss, enter into a consent order or to take to the disciplinary hearing the auditors involved,” Agulhas said.
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Last week, the World Economic Forum’s Competitiveness Report for 2017-2018 showed that South Africa had lost its number one ranking for auditing standards. The country had enjoyed the top spot for the past seven years.
KPMG is already under massive strain after several blue-chip companies indicated they were reviewing their relationship with the audit firm.
Former finance minister Pravin Gordhan, the South African Revenue Services have already said there are looking at launching legal proceeding on the firm over the fallout out over the Sars report KPMG has since said its recommendations can no longer be relied upon.
Additional reporting by Siyabonga Mkhwanazi