Reuters<\/a><\/strong>, sources said the bank told top lenders on Friday that it could not fire KPMG as its auditor, as it could undermine financial stability.<\/p>\nKPMG is one of only four auditors with enough depth to jointly audit the four largest banks, and no bank may drop or hire an auditor without the central bank\u2019s approval, the report said.<\/p>\n
In effect, the Reserve Bank is saying KPMG is “too big to fail”, the sources said, and this is the message that it is taking to the banks in its discussions with them.<\/p>\n
The banks and SARB declined to comment.<\/p>\n
Of South Africa’s so-called ‘big four’ banks, FirstRand is the only one not to make use of KPMG’s services. The other banks – Absa, Nedbank and Standard Bank – have all previously indicated that they are either actively reviewing their relationship with the auditor, or are waiting for all investigations to play out.<\/p>\n
KPMG International announced last week (22 September) that it was conducting a full and independent investigation into the local operations.<\/p>\n
Meanwhile, the\u00a0Independent Regulatory Body for Auditors (IRBA) and the Companies and Intellectual Properties Commission (CIPC) also have ongoing investigations.<\/p>\n
Several companies and government departments have already dropped the firm, including Sasfin, Sygnia, the\u00a0Institute of Directors in Southern Africa, Hulisani, and parliament’s medical aid scheme.<\/p>\n
The firm has been accused of turning a blind eye to alleged money laundering taking place between Gupta-linked companies, which allowed the family to pay for a R30 million family wedding in 2013.<\/p>\n
It has also been criticised by SARS for “illegal and immoral” acts relating to the withdrawal of a report into the “rogue SARS unit”, which was used to hound former SARS officials, including former finance minister Pravin Gordhan.<\/p>\n
KPMG said the report did not pass internal quality standards and could not be relied on, while SARS said that the report was its intellectual property and was accurate.<\/p>\n
The auditing firm has since apologised to those implicated in its report.<\/p>\n
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