Earlier this week KPMG South Africa revealed two partners had resigned after disciplinary charges were brought against them, relating to failure to disclose relevant financial interests when working with a client, VBS Bank. 

Last autumn the firm brought in a new leadership team, following criticism of it work for the Gupta family, businessmen with close ties to former President Jacob Zuma, which it said ‘fell considerably short’ of its standards.

At the time auditor-general Kimi Makwetu said AGSA would continue to use KPMG South Africa for existing public sector audits which had already been allocated, while it await the outcome of the firm’s internal investigations.

In the latest development, Makwetu said recent media reports relating to the external audit of VBS Mutual Bank and the conduct of KPMG audit partners are some of the reasons that prompted the decision to withdraw all KPMG audit mandates with immediate effect.

Makwetu said the terminations ‘are not a judgment on the capabilities or integrity of the professionals that work in the firms, but are recognition of the significant reputational risks associated with matters that affect them at present.’

‘Our priority now is to closely work with all interested stakeholders in the quest to maintain and further improve the confidence that the public places on the external audit function in the public sector. We are also part of endeavours to help mend the image of the accounting/auditing profession, which has received some reputational dents – most of these self-inflicted – in the recent past,’ he said.

The AGSA statement is here.

Report by Pat Sweet