JOHANNESBURG - The South African Institute of Chartered Accountants (Saica) yesterday called on the Ntsebeza Inquiry to leave “no stone unturned” in alleged misconduct of Saica’s members who worked for KPMG in auditing the books of a Gupta-owned company.
Terence November, the chief executive of Saica, said on receipt of the Ntsebeza Inquiry report that Saica would, in the event of findings of improper and unprofessional conduct by individual members, institute disciplinary processes.
“It is fair to say that the events surrounding the well-publicised KPMG matters have resulted in significant criticism of individuals within the profession and caused a concurrent decline in the trust of the profession by both the market and the public at large,” Nombembe said.
Saica last year instituted the Dumisa Ntsebeza-led inquiry to investigate the alleged conduct of its members employed by KPMG to determine, among others, the extent of such member’s involvement in the alleged misconduct in auditing the books of Gupta-owned Linkway.
Ntsebeza has appointed advocate Pule Seleka and advocate Amaechi Olua as evidence and the inquiry began its hearings yesterday.
The inquiry would look at work done by the audit firm for the Guptas from January 2013 to September last year.
The audit firm came under heavy criticism last year for the role it played in the audit of Linkway Trading, which was allegedly used to channel taxpayers’ money to fund the Guptas’ 2013 lavish wedding. The money was meant to be used for the upliftment of indigent farmers in the Free State.
The Free State government pumped about R200million into the project, most of which was allegedly syphoned off to companies owned by the Guptas. The Hawks have already made arrests with regards to the ill-fated project.
KPMG last year said it was evident from its investigation that the audit work, including Linkway Trading, fell well short of the quality expected and that the audit teams failed to apply sufficient professional scepticism and to comply fully with auditing standards.
The Independent Regulatory Board of Auditors (Irba) is also investigating the matter.
Bernard Agulhas, the recently reappointed chief executive of Irba, said one of his first tasks would be to tackle the current confidence crisis in the auditing profession. He said that it was up to the regulator to restore confidence by taking appropriate action in the auditing and accounting profession.
“We can’t deny that in the current climate of corporate fraud and corruption - the audit opinion is not as trusted as it once was. To add to that, there is a growing expectation gap between what the public expects an auditor to do and what they are required to do,” he said.
The regulator is currently engaging with legislators to amend the Auditing Profession Act (APA) to implement harsher sanctions and greater powers for the regulator to discipline errant auditors.
Earlier this month, the standing committee on finance undertook to write to the National Treasury to request that the Amendment Bill for the APA must be tabled as soon as possible for the committee to deliberate with a view to passing the bill sooner rather than later.
Irba said there were more than 40000 accountants in the country, but that only 4500 held the registered auditor designation.
Agulhas said accountants in practice and commerce did not have the same level of oversight as registered auditors as it does not have jurisdiction over them.