Government cancels auditing contracts with KPMG and Nkonki Inc
The Auditor General, Kimi Makwetu, on Tuesday announced his office’s decision to terminate, with immediate effect, the auditing contracts with KPMG and Nkonki Inc with the government.
The two beleaguered companies had been doing public sector audits on behalf of the Auditor General of South Africa, the AG said in a statement.
Auditing firm KPMG has been experiencing a harrowing few days, following the resignation of two partners facing internal disciplinary charges and the announcement that it would review all the work done by its partners over the past 18 months in a bid to regain public trust.
"What we are doing is basically opening ourselves up to scrutiny," said its CEO Nhlamulo Dlomu in Johannesburg on Sunday.
Makwetu said in a media statement that recent media reports relating to the external audit of VBS Mutual Bank and the conduct of KPMG audit partners were among of the reasons that prompted the decision to withdraw all KPMG audit mandates with immediate effect.
On the termination of Nkonki Inc.’s contract, Makwetu said media reports on matters arising from the shareholder transactions involving the firm were of "grave concern and pose significant risk on the reputation of my office through the statutory audits contracted” to Nkonki Inc.
“As South Africa’s supreme audit institution, this country looks up to us to act and project an image of accountability, the same way we hold the entire public sector to account on how it uses taxpayers’ monies," he said.
This is one of the tenets that have anchored this organisation for over 100 years, and we encourage all our employees and contracted audit firms to conduct themselves in a manner that will not erode this long-standing legacy."
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