KPMG said in a statement yesterday that it remained proud of the work as well as the diligence and professionalism that its team performed for the bank.
“We have implemented far-reaching changes over the past seven months to all aspects of the firm, including governance, quality and risk management. Work to further underpin the quality of our services and integrity of our professionals continues,” KPMG said.
Barclays’ decision comes in the wake of the firm’s failure to pick up irregularities in VBS Mutual Bank. VBS is currently under curatorship and forensic investigation after the curator failed to trace R900million of the R2.9 billion held with the bank.
In a slap in the face of KPMG, the curator has since withdrawn the bank’s audited financial statements for the year ended March 31, 2017, “as they contain material misstatements and are no longer considered to be reliable”.
KPMG has already lost the Foschini, Interwaste, Sygnia and Wits University accounts. Last month Auditor-General Kimi Makwetu also terminated the firm’s public sector contracts with immediate effect.
Aeon Investment Management chief investment officer Asief Mohamed said he did not believe that KPMG was too big to fail in South Africa.
“What I think is likely to happen is that the South African partners will leave in numbers to join smaller audit firms or start a new firm under a new brand name,” Mohamed said
Barclays initially stuck with KPMG, following the Gupta-owned Linkway Trading and the ill-fated Sars “rogue” unit report, with the board recommending that the firm be reappointed for 2018 at its upcoming annual general meeting later this month.
Barclays spokesperson Phumza Macanda said the appointment of KPMG as external auditors would effectively come to end this month. “The board has carefully evaluated the on-going and more recent developments and decided that it is no longer able to support the reappointment of KPMG.
Dr. Iraj Abedian, the chief executive of Pan-African Resources Investment and Research Services, said KPMG’s demise was nigh.
He said many clients who had decided to stick with the firm were probably asking themselves whether they should continue the relationship.
"The question that would now face the clients who have decided to stick with it will be: if KPMG is not good enough to do work for the Auditor-General and Absa, why is it good enough to look after the books of say Standard Bank or Nedbank?” charged Abedian.
“The brand is too corrupted to recover. Now is the opportunity for smaller firms to bulk up and step up their game so we can see real transformation in the sector.”
KPMG also looks after the books of Standard Bank, Nedbank and Investec. Standard Bank and Investec have both said their relationship with the firm remains under review.
- BUSINESS REPORT ONLINE