Government must review their KPMG audits‚ says Gigaba
In the wake of allegations of state capture ensnarling auditing firm KPMG‚ Finance Minister Malusi Gigaba has called on government entities to review audits conducted by the company.
"In the immediate term‚ and as a measure to restore confidence in audits‚ all of government and its entities must consider reviewing their work programmes with KPMG‚ to ensure that their audit processes have not been compromised in any way‚ and to take appropriate steps if it has been compromised‚" Gigaba said in a statement on Friday.
This follows the conclusion of KPMG’s international investigation into the company's handling of all its Gupta-linked accounts and its withdrawal of its report's findings and recommendations on the so-called "rogue unit" at the South African Revenue Service (SARS).
The report by the firm resulted in the axing of senior investigative executives and was used to oust the finance minister‚ Pravin Gordhan‚ which resulted in huge losses to South Africa.
Gigaba said the KPMG scandal had repercussions not only for the company but also for governance.
" These developments further threaten to undermine our efforts in reinforcing confidence and enhancing a climate for investments‚ both domestic and international‚" he said.
He added that the scandal should motivate government to rotate audit firms.
"Government should explore possible regulations for both the public and private sector in an effort to ensure and preserve the integrity and good governance in the audit fraternity.
This move will not only ensure that companies diversify their audit options‚ but also build in a peer review oversight mechanism."
He said this was an opportunity to root out bad elements‚ which threatened the growth of the economy.
"It is therefore‚ warranted and critical that the relevant law enforcements and bodies such as the Independent Regulatory Board for Auditors (IRBA) look into this matter to identify and sanction those responsible for any wrong-doing‚" Gigaba said.