The KPMG saga with SARS
and the Gupta companies boggles the mind! There is often a perception
that “international” audit and accounting firms operate on “above
reproach” standards and business values. The collapse of Anderson; the
misdemeanor of Bell Pottinger; and now the dodgy conduct of KPMG, should
educate us differently!
The decisions that executives make, to operate underhandedly, have a
huge impact on the lives of ordinary workers and scrupulous
professionals whose jobs and careers are ruined and tainted; sometimes
In like manner, the malpractice in one institution of public trust,
like an audit firm such as KPMG, brings the industry into disrepute, and
threatens to place the whole accounting and audit profession under the
dim light. This has led to much public consternation in South Africa
The SACC notes the extensive statement issued by KPMG last weekend.
We understand that the substance of the statement seeks to explain away a
number of the allegations against KPMG South Africa, and announces
extensive leadership changes, flowing out of the investigation by KPMG
International. Many questions remain unanswered; and these include:
With due respect, with so much that is left hanging, we do not
believe it is enough for KPMG to investigate itself. We welcome the
initiative of the Independent Regulatory Board for Auditors, promising a
“robust investigation into the KPMG performance. We are, however,
concerned that the IRBA parameters may limit their investigation within
the audit sphere of the KPMG business. This may not adequately address
any possible wrongdoing by professionals in the non-audit parts of the
company’s vast operations.
For this reason, and in the interests of drilling down on specific
individuals who dealt with specific non-audit projects, we appeal to the
South African Institute of Chartered Accountants, the premier
professional association of all accountants, to initiate a wider
investigation that looks into individual members in a much more focused
way. It must be an independent probe conducted by a judge or Senior
Counsel experienced in such public enquiries. Such an enquiry into the
whole saga and its context, will bring relief to the situation. It will
be able, we would hope, to separate the fingered individuals from the
rest of the ethical professionals, restore public confidence and save
the careers of innocent people.
The SACC has written to the SAICA, urging for this additional
comprehensive professional enquiry into KPMG. This is necessary for the
thousands of employees who otherwise will now always work under a cloud.
This is necessary for the SARS saga to also be able to reach its
clarifications in the interests of the lives and careers of affected
professionals, past and present.
This enquiry is necessary for this accounting industry of public
trust to survive this episode. The South African accounting industry has
been rated number one in the world for several years – a proud
tradition! Indeed such a thoroughgoing enquiry will clean up the place,
and empower the new CEO, Ms Nhlamu Dlomu, to deliver on her promise, to
“regain the public’s confidence”. This is necessary for the common good!