LOSS OF STATE CONTRACTS
KHAYA SITHOLE: Auditors suffer adverse brand association
Nkonki’s demise is primarily linked to the fact that, based on CE Mitesh Patel’s buyout transaction backed by Trillian, the firm is now associated with the Guptas
The auditing profession’s descent into chaos took a much bleaker turn last week. The office of the auditor-general suspended its working relationship with KPMG and Nkonki. The suspension of such relationships in effect locks the firms out of a lucrative source of income — audits of state-owned entities. The auditor-general correctly cited the risk of being associated with the firms as the cause for concern. Both firms have recently found themselves associated with all that is antithetical to the fundamental pillars of the profession: integrity, due care and competence. KPMG’s audit report of VBS was withdrawn by the bank’s curator on the basis that the information contained in the financial statements audited by KPMG could no longer be relied upon. In addition, the audit partners in charge of the VBS audit were then discovered to have been granted loans from their client, which were not properly disclosed. While no law prohibits the extension of a loan to anyone who wants one, the n...
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