• Register
Return to: Home > News > Advisory > KPMG South Africa admits firm’s failings

KPMG South Africa admits firm’s failings

KPMG South Africa has admitted failures which have led to the tarnishing of the profession’s reputation in South Africa, following South Africa’s Independent Regulatory Board for Auditors’ (IRBA) CEO Bernard Agulhas call for a line to be drawn in the sand so that the profession can start to rebuild trust and confidence.

The IRBA issued the statement to address the current ‘crisis’ of the audit profession, which has had its credibility questioned over the last 11 months due to a range of scandals.

Agulhas said: “An unprecedented crisis also calls for unprecedented measures. As a result, the IRBA has taken the unusual step of mobilising a specialised team specifically to do a review of KPMG’s turnaround strategy and the initiatives it is implementing internally to address any identified weaknesses in its operations.

“The independent review and assessment will commence during next week and form part of a continuous process to monitor improvements to the firm’s operations.”

KPMG South Africa issued a statement in response, which welcomed the comments and said that the firm will co-operate with the independent review.

The firm has been involved with a range of scandals over the last year which began with their involvement with the Gupta family who were accused of using government funding to pay for a family member’s wedding.

The firm was also scrutinised over their audit work for the collapsed VBS bank.

Most recently, Barclays Africa Group decided to cut ties with KPMG due to their faltering reputation.

In April, KPMG South Africa attempted to alleviate the scrutiny of the profession’s reputation by taking measures, including conducting background checks of all their partners.

Despite the reputational damage the profession has undergone, Agulhas noted that there are positives to be taken from the last year: “A crisis is necessary sometimes, to make everyone take a good a look at themselves. We believe that it has refocused the broader profession to look at ethics, policies, and quality so there would be positive changes emanating from the crisis.”

Top Content

    MSI joins AGN and DFK in Global Connect

    A year after AGN International and DFK International launched Global Connect, multi-disciplinary association MSI has joined the group.

    read more

    Views from the Eurozone

    With Brexit looming, populist governments gaining footholds in a number of countries and movements such as the Yellow Jacket protests in France, 2018 was anything but a quite year for the eurozone. Here leaders report to the IAB on their markets.

    read more

    Eastern promise and how to find it

    With China rising as a global power, Jonathan Minter spoke with ShineWing’s Zhang Ke and Marco Carlei at the World Congress of Accountants 2018 in Sydney, to discuss the cultural challenges that occur when Chinese networks look beyond their border, and the dividends available for those who overcome them.

    read more

    The UK: uncertain waves rule Britannia

    The UK’s accountancy profession is currently in a period of much uncertainty. The Competition and Markets Authority (CMA) has released its review into the listed audit market which could cause the biggest shake-up the profession has seen in years, the Kingman Review has described the Financial Reporting Council (FRC) as not being fit for purpose and called for it to be replaced. All the while the country remains in a deadlock on Brexit negotiations.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.