Auditor General cancels KPMG, Nkonki contracts

The Auditor General of South Africa has terminated contracts with embattled audit firms KPMG and Nkonki with immediate effect.

They did work for the office of the Auditor General on public sector contracts, eNCA reports.

Auditor General Kimi Makwetu says issues around the two firms have been concerning and pose significant risk to the reputation of his office, while stressing the terminations are not a judgement of the capabilities of individuals at the firm.

Last year, he announced he would continue to secure the services of KPMG SA, limited to the audits that were already allocated to the firm at the time while waiting for investigations to conclude.

However, “Recent media reports relating to the external audit of VBS Mutual Bank and the conduct of KPMG audit partners are some of the reasons that prompted the decision to withdraw all KPMG audit mandates with immediate effect,” Makwetu said in a statement.

The contracted firms are obliged to “stringently follow” the AG’s auditing standards as well as the ethics that are the pillars of the accounting profession, the statement said.

“Once these have been fundamentally impacted, we are called upon to review and reassess our position.”

Also read: Two KPMG partners resign over VBS Mutual Bank ‘financial interests’

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