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KPMG Gupta mistake gives impetus to regulating accountants

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The CIPC and IRBA are monitoring KPMG to ensure appropriate action is taken against any errant directors due to the Gupta fiasco.

According to Business Day, the CIPC and IRBA has been engaging with the KPMG board since the end of July, when leaked Gupta e-mails raised concerns about contraventions of the companies act and the auditing professions act.

According to the report “the e-mails indicated KPMG was aware that Gupta family firms were categorising the Gupta wedding costs as business expenses. The e-mails describe how the money flowed from the Free State government via an agricultural project, to bank accounts in the United Arab Emirates and back to Gupta business accounts in SA. It appears KPMG was aware of the payment flow, but did not raise any concerns”.

The email saga has already cost KPMG a major client. Sygnia fired KPMG last month on the back of KPMG’s admission that it should have stopped working for the Gupta family sooner.

In response the IRBA now wants to increase the level of regulation of auditors and introduce oversight for accountants. The IRBA told Business Day it was prepared to amend the Auditing Profession Act to incorporate broader powers over all accountants, whether in public practice or private placement. Board CEO Bernard Agulhas said the World Bank had recommended to the finance minister in 2013 that professional accounting organisations be governed in line with auditors.

Click here to read more and test whether you are ready of the regulation of the accounting profession.