Parliament supports auditor-general’s decision to cancel KPMG, Nkonki contracts

The decision by the auditor-general (AG) of South Africa to terminate contracts with embattled audit firms KPMG and Nkonki has been supported by the parliamentary standing committee on the AG.

Last month, AG Kimi Makwetu terminated the contracts with the auditing firms – which did work for the office of the AG on public sector contracts – with immediate effect.

Makwetu said at the time the concern was the issues around the two firms that posed a significant risk to the office of the AG.

“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 parliamentary committee said it was today briefed by the AG about the decision, which, including the risk posed on the reputation of the AG’s office, include also protecting the reputation of state entities.

“It [AG] further said that the decision was in the best interests of the international standard on quality control,” the standing committee said in a statement.

Co-chairperson of the committee Themba Godi said that although the AG was a chapter 9 institution that is only accountable to parliament, the committee still appreciated its prerogative to take independent decisions, adding that the AG had taken the right decision.

The committee said that until Nkonki declares its shareholdings, it should not conduct any business with state entities.

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