TOO CLOSE FOR COMFORT
ROB ROSE: Why auditors are hopping mad over KPMG scandal
KPMG, the joke goes, is no longer just an auditor; it’s now a wedding planner, too. But it’s no laughing matter for auditors fighting new rules
Revelations that KPMG apparently checked its dignity at the front door and fawned over the Guptas could hardly be any more embarrassing for the auditing firm. It’s also a scandal that couldn’t have come at a worse time for the wider profession, which has argued fiercely in recent months that there’s no need for new rules stipulating that companies must change their auditors every 10 years. These rules, imposed by the Independent Regulatory Board for Auditors (IRBA) and set to take effect in 2023, are necessary because of a drop in auditing standards, says the regulator. The IRBA says steps must be taken to bolster auditors’ "independence" from their clients to ensure greater public trust in financial accounts.As luck would have it, one firm that fought the IRBA’s plan was KPMG. In January, KPMG’s Michael Oddy said "no empirical evidence has been produced to support the suggestion of a perceived lack of independence". No informed audience would "believe that auditors in SA are not in...