KPMG offices 
Picture: Nokuthula Mbatha/AfricanNewsAgency
KPMG offices Picture: Nokuthula Mbatha/AfricanNewsAgency

University urged to dump troubled KPMG

By LOYISO SIDIMBA Time of article published Dec 28, 2018

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The Mangosuthu University of Technology (MUT) has been asked to dump the troubled audit and professional services firm KPMG after advice from Auditor-General Kimi Makwetu.

A report on an investigation into the affairs of the institution showed that as far back as 2009 issues had been raised about the professional integrity of the firm's work as MUT’s external auditors.

“We have no record as to what action, if any, was taken to correct the breach in confidence that resulted from there,” read the report by former Unisa vice-chancellor Professor Barney Pityana.

The report stated that it was even worse that MUT had continued to find reason to commit to KPMG even though advised differently by Makwetu.

KPMG has come under fire after it emerged that it had done business with a number of companies owned by the controversial Gupta family.

Last month, the embattled audit firm announced it would distribute R47million in fees paid for auditing the books of Gupta-owned companies to 52 civil society organisations and NPOs in the education sector.

Last year, KPMG committed to donating fees earned from Gupta-related entities to education and anti-corruption NGOs amounting to R20m each.

The company has also seen an exodus of staff from its South African operations, including its former chief executive and senior partner Moses Kgosana, who admitted that he had attended the notorious Gupta wedding in Sun City in May 2013.

Some of its senior employees have been reported to the Independent Regulatory Board for Auditors (IRBA) for investigation.

KPMG was also implicated in advocate Terry Motau’s Great Bank Heist report on the VBS Mutual Bank after the firm had allegedly “turned a blind eye to irregularities and corruption at the bank”.

The company has acknowledged that failings at the firm have contributed to adverse perceptions about the audit profession and accepted responsibility to work towards redressing the situation.

“The controversy around the industry has undermined public confidence and this needs to be restored through thoughtful and constructive measures,” it said earlier this year.

Since September last year, KPMG had undertaken far-reaching reforms in a bid to put quality and Integrity at its heart and has been in dialogue with the IRBA throughout that period and would co-operate closely with the regulator.

“Revelations about VBS unsettled clients and we recognise they require reassurance that KPMG remains a good firm We have already taken many steps and welcome the independent scrutiny of the IRBA,” it said.

Political Bureau

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