Embattled auditing firm KPMG has welcomed the recent move by the Independent Regulatory Board for Auditors (IRBA) to review the group’s turnaround strategy.
The group said that it has acknowledged that the recent failings at the firm have contributed to “adverse perceptions about the audit profession” in South Africa, and that it has accepted the responsibility to work towards redressing the situation.
“The controversy around the industry has undermined public confidence and this needs to be restored through thoughtful and constructive measures,” KPMG said.
“Against this backdrop, we are supportive of (IRBA)’s call for a ‘rational and measured response’ by all stakeholders, and of its resistance to allowing the industry’s reputation to be defined by the actions of a few bad individual auditors.”
Since last September KPMG has undertaken far-reaching reforms which seek to put Quality and Integrity at the heart of the firm.
“We have been in dialogue with the IRBA throughout this period, and we look forward to co-operating closely in this next phase as they, in line with their continuous process to monitor improvements to the operations of the firm, review the adequacy of the remedial actions we have committed to.”
KPMG has been hit hard by at least three major scandals, which have resulted in several big clients, including the Auditor General and Absa, dropping them – and many senior executives resigning.
The most recent scandal involved senior partners not disclosing personal loans with one of their clients, VBS Bank, which was forced into business rescue amid liquidity problems.