The South African Reserve Bank (SARB) has expressed concerns over the potential fallout surrounding KPMG, as the company plays a key role in ensuring that the country’s banking sector runs smoothly.
According to a report by BusinessDay, representatives from South African banks will meet with the SARB on Thursday to discuss a way forward.
The meeting will reportedly focus on everything from potential job losses, perceived risks as well as auditing regulations.
Under current regulations, banks are required to have two auditing firms, and their ability to rotate auditors and to secure the auditing services required by large and complex institutions could be at risk should one of the big four auditing firms such as KPMG go out of business.
KPMG is the joint auditor of four of SA’s largest banks and currently employs over 3,500 people.
KPMG made wide-sweeping changes to its leadership on Friday (15 September) following an internal investigation that found that the group did not meet quality standards in its work for the Gupta family.
Eights executives, including CEO Trevor Hoole, resigned, with the company seeking the dismissal of one more.
The company is currently being investigated by regulatory bodies for allegedly turning a blind eye to possible money laundering practices by Gupta-linked companies. Its internal investigation found no wrongdoing or illegal activity on KPMG’s part, but found that the Gupta companies involved “misrepresented information”.
This week saw three more companies cut ties with the auditing firm while a number of JSE-listed companies indicated that they were considering doing the same.