KPMG chairperson Wiseman Nkuhlu on Sunday announced that the beleaguered auditor will launch an “unprecedented” review of all its work done by partners in the last 18 months in a bid to regain public trust.
“This is being done in an effort to ensure that nothing comes back to bite us following the challenges of integrity we have experienced in the past,” Nkuhlu told a media briefing in Johannesburg.
“We have undertaken to review all files done by partners in the last 18 months. This is unprecedented, and I understand that some partners are going to be angry. There will be some resistance.”
He said the review is part of reforms instituted by the firm to help regain public trust and improve quality of its work.
The company is looking at reviewing at least 200 files.
“What we are doing is basically opening ourselves up to scrutiny,” said CEO Nhlamulo Dlomu.
This follows the company’s announcement on Saturday that two partners, Sipho Malaba and Dumi Tshuma who were facing disciplinary charges related to work done for VBS Mutual Bank, had resigned with immediate effect.
Malaba was the head of the group’s financial services auditing unit, and the person responsible for signing off on the VBS Mutual Bank financial statements.
The SA Reserve Bank, which placed the Limpopo province-based VBS bank under curatorship, has now also commissioned a forensic investigation into the bank’s business affairs.
The embattled audit firm has suffered severe reputation damage since allegations of misconduct emerged regarding the work it did for Gupta-linked companies and its role in the controversial SARS “rogue unit” report.
KPMG faces at least two separate investigations and there has been an exodus of clients and senior executive staff since revelations last year.
It kicked out CEO Trevor Hoole, chief operating officer Steven Louw and chair Ahmed Jaffer.
In September last year, KPMG apologised for the SARS rogue unit report and offered to repay R23m to SARS – and to donate R40m in fees from Gupta-owned clients to charities.
In October, the Independent Regulatory Board for Auditors (IRBA) launched its investigation after SARS laid a complaint, and the SA Institute of Chartered Accountants (Saica) is currently holding an inquiry on the conducts of its members employed by the company.
The commission is headed by advocate Dumisa Ntsebeza.
In October, KPMG officials appeared before the parliament’s standing committee of public finances to explain the firm’s conduct.
The company revealed it had started doing work for Gupta-linked firms in 2002, which amounted to 35 different entities.
Nkuhlu said on Sunday KPMG can be redirected to regain its former glory. He said the firm’s past reputation was an indication that “it might have been doing something good for some time”.
Another check to be instituted by the troubled firm includes the launch of a hotline where partners could report cases where they may have been made to “approve work that was not up to standard”.
Partners at the firm will also be subjected to background checks, including their spouses.
The process will be overseen by KPMG International and the findings reported to the firm’s risk committee.
“We have a responsibility and a duty to rebuild the firm, and the leaders of the firm will stand together to achieve this,” said Nkuhlu. – Fin24