Money

Barclays Africa says it will not reappoint KPMG as external auditor

May 04, 2018 15:38·
KPMG came under fire in South Africa after a local bank that the firm had given a clear audit in 2017 collapsed last month

KPMG came under fire in South Africa after a local bank that the firm had given a clear audit in 2017 collapsed last month

Barclays Africa has ditched KPMG SA as its external auditor‚ citing the recent developments around the embattled auditing firm.

"We have engaged proactively with KPMG South Africa and KPMG International to ensure that both the required audit capacity and quality assurance are underwritten by KPMG International to ensure full completion of the 2018 Nedbank Group audit", the bank said in an emailed statement.

KPMG released a statement in which it noted Barclays' decision.

"Decisions on issues that emerged at different times but the risks are enormous to us. We are very proud of the work that we have performed for Barclays Africa Group over many years, and of the diligence and professionalism of the team who served them", read the statement.

Barclays is yet another in the list of major corporations that have cut ties with the "captured" multinational.

Barclays Africa's board initially proposed that KPMG be re-appointed as one of its external auditors for the 2018 financial year, but that it would "continue to monitor developments" relating to the auditor.

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South Africa's central bank has said there was no requirement for a bank to use one of the "Big Four" auditors, EY, KPMG, Deloitte and PwC, but they should use any independent and competent firm.

KPMG's own investigations found flaws in work it did for the national tax agency and the Gupta family.

Southern African Fraud Prevention Service's head, Manie van Schalkwyk, said the exposure of wrongdoing that had been uncovered in previously reputable companies such as "Bell Pottinger, McKinsey, KPMG and more recently Steinhoff" indicated that "high level economic crime had become more common in the corporate arena".

Makwetu said that audit work of the auditor-general's office was outsourced on the basis of two strict principles - the independence of the audit firm, and that the work would be carried out with professional competence and in accordance with the auditing standards and methodology employed by the auditor-general's office.

Makwetu says that KPMG was given seven months' grace to internally investigate its practices but management could not say when the probe will be finalised.

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