EDITORIAL: KPMG pays the price for poor conduct
Market dishes out just deserts to a company that has done much to tarnish SA’s reputation as an investment destination
Job losses are painful. This is as true for the employees of upstanding corporate citizens as it is for those who have been axed from big four auditing firm KPMG, which was ruthlessly exposed in recent months for failing dismally on a number of ethical fronts.
On the face of it, there is little reason to rejoice in the demise of any company that pays tax, provides employment and training, and improves the communities it serves. But in the case of KPMG, the way it has so fundamentally botched the basics — not just once, but at least three times — has led to a sharply diminished pool of goodwill towards the auditing firm.
This is the context in which KPMG announced this week that it would cut its staff of 2,700 by 400 people. Unfortunately for them, this is the market at work, dishing out just deserts to a company that has done much to tarnish SA’s reputation as an investment destination.
Its well-chronicled failures — ethical problems at VBS Mutual Bank, its shoddy audit of the Gupta firms and work for the SA Revenue Service — have done much to advance the agenda of state capture in SA. Others of a similar bent, like Bell Pottinger, have already met an appropriate fate at the hand of the market.
Of course, most of KPMG’s innocent employees are highly skilled individuals. They will not want for work. But in the case of the KPMG brand, there will be few tears shed as it is forced to pay the price for its conduct.