INTERNAL AUDITOR
African Rainbow Minerals opts to cut KPMG
The move was spurred by concern over KPMG’s governance and ethics compliance as well as allegations regarding the lawfulness of its conduct
The KPMG outlook became even bleaker on Monday as African Rainbow Minerals (ARM) announced it was terminating its services as an internal auditor. The move by ARM is potentially more damaging than those of other firms that terminated KPMG’s services as an external auditor. “An internal auditor is much more embedded in a company’s operations than an external auditor. They usually have offices on site,” said one corporate accountant. Internal auditors are expected to pick up fraud and check on the security of a company’s financial and accounting systems. ARM’s most recent annual report states that KPMG performs a number of reviews to assess the adequacy and effectiveness of systems of internal control and risk management. KPMG, ARM’s internal auditor since 2004, also plays a critical role in overseeing the company’s risk management strategy and provides the board with independent assurance. In addition, KPMG is involved in auditing the incentives in ARM’s short-and long-term executive...
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