AG terminates contracts with audit firms KPMG, Nkonki Inc

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Auditor General, Kimi Makwetu says they took the decision to terminate contracts with audit firms KPMG and Nkonki Inc so at to protect the reputational damage the two can cause on the office of the AG South Africa.

He was briefing Parliament on the reasons he took such drastic steps.

The Office of the Auditor General announced last month that it was cutting ties with KPMG and Nkonki Inc.

AG Kimi Makwetu says the decision was taken after considering various factors that are key in the audit profession.

He says VBS Mutual Bank which has been placed under curatorship was audited by the KPMG, while Nkonki failed to provide its list of shareholders for more than a year, after they were requested to do so.

Makwetu says his office has lost trust in the two companies and that Nkonki’s independence could not be established.

Members of the Standing Committee on the Auditor General supported the move.

Scopa chairperson Themba Godi says: “I will say from the onset the reputation is everything defend it with your life so I think if you use that as a starting point it will assist.”

IFP Chief Whip Narend Singh said the public sector and all its entities must be audited by the office of the AG. He added that it must be capacitated in order to deal with the extra volume of work.

ANC MP Zephroma Dubazana criticised the role played by Independent Regulatory Body of Auditors accusing it of possible conflict of interest.

“How do you keep on saying you are investigating , how can you investigate when the law of this country says every service that are outsourced that entity has to declare to the state the ownership.”

Makwetu says they’re still working very close with these two audit firms to avoid compromising the audit quality of the remaining work.

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