What KPMG’s crisis means for auditing in SA
As the nightmare haunting KPMG deepens, more than 400 of its staff have fled, while clients paying more than R330m in audit fees a year have given the firm the bullet. But this obscures the fact that it is not just KPMG in trouble — the entire auditing profession in SA and elsewhere is in crisis, as much due to shoddy work as it is to unethical behaviour. What is behind this reckoning?
Nhlamu Dlomu wears a brave smile as she greets the FM, hurrying to her next meeting. Self-assured and bright-eyed, she does not look like someone trying to save a 120-year-old audit firm from ruin. Yet this is the task Dlomu (42), a trained clinical psychologist, assumed in September when she was appointed CEO of a tainted KPMG in SA. Dlomu, the first black woman and the first nonauditor to lead the business, was previously KPMG’s head of people and change. She was thrust into the role following astonishing revelations regarding KPMG’s audit work for the Gupta family as well as its consulting work for the SA Revenue Service (Sars), which led to the resignation of eight partners, including then CEO Trevor Hoole and chair Ahmed Jaffer. Then, last month, the third strike: two of its partners, Sipho Malaba and Dumi Tshuma, resigned with immediate effect when it emerged they had secretly held personal loans with the bank they were auditing, the controversial Limpopo-based VBS Mutual Bank...
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