KPMG failures pose risks to the state

5 October 2017

Today’s SCOPA briefing by KPMG on the SARS Rogue report revealed a lack of transparency and audit integrity by KPMG with regards to reportable irregularity to the Independent Regulatory Board for Auditors (IRBA) , over a three year period, within the 33 state entities that it was providing audit services for.

The briefing provided clear evidence of poor oversight that exists over audit firms in South Africa. We are concerned that this poor oversight may have negatively affected the proper functioning of government departments and state entities.

Due to the compromised SARS rogue unit report prepared by KPMG, the DA will call for an independent inquiry that:

- will be transparent and composed of a member of Parliament, as per the DA's initial suggestion to the SCOPA chairman, Temba Godi;

- will review the documents of the briefing that SARS gave to KPMG, which KPMG has agreed to provide; and

- will review all documentation and reports of the Gupta related companies doing business with the State. SCOPA has requested these from KPMG.

It is unacceptable for auditors to claim to assist state departments and entities but fail to report irregularities, as required by law, to IRBA and SAICA for further investigation.

KPMG has entered into 1 301 projects with the state and constitutional institutions last year and 3 948 over the last three years. It is clear that the presence of systemic problems at KPMG could pose a great risk for the state.
The DA, therefore, calls for a review of all the contracts that government departments have entered into with KPMG including all the contracts that the firm has tendered for.

The DA will not tolerate corruption and poor oversight, whether in the private or public sector as this has consequences financial accountability.

Issued by David Ross, DA Spokesperson on SCOPA, 5 October 2017