The Independent Regulatory Board for Auditors (IRBA) has confirmed that it will initiate a mero motu investigation into the 2014 audit of Linkway Trading (Pty) Ltd, the company alleged to be involved in the Gupta wedding scandal.
The audit watchdog has the power to initiate such investigations without having to receive a formal complaint, it said in a press release.
Bernard Agulhas, CEO of the IRBA said while they have not received a formal complaint, they have nevertheless initiated their own probe into the audit of Linkway Trading by KPMG for its audit in 2014. “It is important that we take seriously allegations in the public domain, which are in the public interest.”
The investigation may be initiated despite the fact that KPMG terminated its 15-year relationship with the affected companies in 2015. Notices have been issued to the auditors and the audit firm has also been informed.
Concludes Agulhas: “The IRBA has since December 2015 been rolling out measures to increase transparency, improve independence and enhance audit quality. Among these were the mandatory disclosure of audit tenure in the independent auditor’s report to enable shareholders to consider the length of relationship between auditor and company in light of the need for independence, as well as the new requirements to disclose key audit matters and how these were resolved. The most recent measure to strengthen independence is the requirement for mandatory audit firm rotation every ten years, which is effective in April 2023.”