Business In The News South Africa

Wits University decides not to renew KPMG contracts

JOHANNESBURG, October 4 – The University of the Witwatersrand (Wits) said on Wednesday that its Council has resolved not to renew contracts with KPMG South Africa for internal auditing and risk management services.

The contracts lapse at the end of the 2017 financial year.

The Wits move is a fresh blow against the embattled audit firm, which continues to lose clients over its controversial report on a “rogue spy unit” within the South African Revenue Service (Sars), and also being implicated in covering money laundering in Gupta-owned businesses.

When the scandal surfaced KPMG SA fired its senior partners, including former Chief Executive Trevor Hoole, Chairman Ahmed Jaffer, Chief Operating Oficer Steven Louw, and appointed Nhlamu Dlomu as its new chief executive.

In a statement, Wits said the decision was taken following a meeting with the new chief executive of KPMG and the company’s international representatives and members of the university council’s audit and council risk committees

Wits said the committees acknowledged that KPMG did take some actions, including releasing the CEO, COO and a number of senior partners to mitigate  against reputation damage suffered as a result of its relationship with Gupta associated companies and its complicity in the Sars report, but felt that it had not gone far enough.

“Further, it was agreed that KPMG had not been sufficiently transparent and that it is hard to reconcile KPMG’s conclusion that no one did anything illegal, when senior individuals have been dismissed and the Sars report has been retracted,” Wits spokesperson, Erna van Wyk, said.

“In these circumstances, the Council believes that it would have been prudent to acknowledge the ethical and legal lapses of KPMG’s senior management team.

“Further, the company should have embarked on programmes to correct the wrongs that have been done to individuals and institutions. The Council also believes that an independent investigation should have been initiated at the outset.”

Van Wyk said audit firm PWC will remain the university’s external auditors.

ANA

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