MEDIA CIRCUS
HILARY JOFFE: SARS doth protest too much over KPMG
The most puzzling thing about the florid and lengthy media conference held by the South African Revenue Service (SARS) on Tuesday to respond to KPMG’s abject announcement earlier in the week is why the tax authority felt the need to respond at all. The findings of the investigation conducted by KPMG International into the local firm’s work for the Gupta family and SARS are, after all, hugely embarrassing. While it has taken far-reaching action, the repercussions will surely be enormous. For an audit firm to say, as KPMG did, that its quality controls failed, that it exercised poor judgment and that it didn’t properly grasp risks or react when red flags went up, is devastating. Audit firms are hired precisely for their probity and judgment, so these findings will cause many clients to review their relationships with KPMG — as some are already doing — and it is hard to believe this will not dent its global reputation.A measured response from SARS might have been simply to step away an...
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