No overnight change yet for audit industry
UK and EU introduced mandatory rotation of firms but in SA it is still many years away
Are the winds of change finally blowing over the audit profession as regulators globally step up the ante on mandatory audit firm rotation? Failures in the financial services sector, such as the global financial crisis of 2008, an increase in allegations of collusion, corruption and hefty fines levied against audit firms, have not only shone an uncomfortable spotlight on the work of audit firms but have also forced audit regulators to step in to mitigate the damage to the industry. The latest blow to the audit profession has come from the work done by KPMG South Africa, which its parent company, KPMG International, said "fell considerably short" of its ethical standards, as it unravelled the South African unit's dealings with Gupta-linked companies since 2002. Sole oversight The 14-year-long relationship that KPMG South Africa had with Gupta-linked companies is a reflection of the modus operandi of the rest of the audit industry, where firms keep the same client for decades. The big...
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