AUDITING
HILARY JOFFE: Red flag for regulator and directors, too
If the audit profession is in trouble, it should be a wake-up call as much for their regulators and for the clients (directors) who hire them as it is for the audit firms themselves. The profession certainly looks like it’s in trouble. It has lost one of the few black audit firms, Nkonki, which went under immediately after the auditor-general responded to revelations of the firm’s Gupta link by terminating the public-sector contracts that accounted for 80% of Nkonki’s business. Big-four audit firms such as Deloitte and PwC have come under fire too for their roles in auditing the likes of Steinhoff and South African Airways. But it is KPMG that has been at the centre of the storm for its work for the Guptas and the South African Revenue Service as well as — more recently — the dodgy role its lead financial services audit partner played at the failed VBS Mutual Bank. KPMG was already losing clients, including the auditor-general, as well as partners, despite the far-reaching clean-up ...
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