JOHANNESBURG - The Independent Regulatory Board for Auditors (IRBA) has hit out at reports that the South African Institute of Chartered Accountants (SAICA) intends to launch an independent inquiry into embattled auditing firm KPMG’s conduct, saying it has no legal mandate to do so.
In a statement on Thursday, the IRBA said it had noted the announcement by SAICA on Wednesday that intends to launch an independent inquiry into KPMG’s conduct, following the events which transpired over the last few months regarding the firm’s involvement in the audit of Linkway Trading and the South African Revenue Service (SARS) report.
IRBA CEO Bernard Agulhas said Parliament had previously publicly announced that the IRBA is performing an investigation into KPMG regarding the above matters, in terms of the Auditing Profession Act, Act 26 of 2005, the IRBA’s governing legislation.
The IRBA will be reporting back to Parliament on progress with its investigation Agulhas added.
"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.
"We call on the market to respect the IRBA’s due process, as required by its legislation, and allow it to run its proper course."
Agulhas said the IRBA’s mandate is to protect the financial interests of the public, and "it will diligently deliver on this mandate in a manner that is independent and fair to all parties".
Last week KPMG announced that it had withdrawn its report on the work the audit firm did for Sars and on behalf of the Gupta family.
On Friday, KPMG South Africa appointed Nhlamu Dlomu as its new chief executive. Dlomu said that she was committed to restore the embattled audit firm’s fundamental values of ethics and integrity in a bid to salvage the firm’s credibility as she takes over the helm at a time of deepening crisis.
This came as Trevor Hoole tendered his resignation on Friday as the chief executive KPMG SA, with chief operating officer and country risk management partner Steven Louw also stepping down. Five other senior partners of KPMG SA also decided to leave the firm.
KPMG SA would also be taking disciplinary action seeking the dismissal of Jacques Wessels, the lead partner on the audits of the non-listed Gupta entities.
KPMG received criticism regarding the “Sars Report” in which it was commissioned by the Sars to investigate allegations of a rogue unit allegedly set up by Pravin Gordhan, who was Sars commissioner at the time.