The Independent Regulatory Board for Auditors (Irba) welcomes the audit reform measures announced by KPMG South Africa. The challenges faced by the auditing profession globally calls for candid conversations in South Africa on the much-needed audit reforms.
In its statement released earlier today, KPMG confirmed that it will cease performing any non-audit work for its JSE-listed clients from 31 March 2021.
“We are encouraged by the bold move taken by KPMG, which the IRBA sees as progressive towards rebuilding trust in the profession, with potential benefits to the wider audit firm community.” says Irba CEO Jenitha John.
“As we note in the UK, the Financial Reporting Council’s ‘radical’ new guidelines set out a shorter list of permitted non-audit services for auditors. This requires audit firms and audit committees to exercise greater scrutiny over safeguards and potential threats. The move by KPMG certainly warrants robust dialogue on public perceptions around non audit services and this will help chart the way forward to initiate interventions by the Regulator and all stakeholders in the profession.”
The Irba called for firms to consider audit reforms to improve audit quality; it did this by introducing the rule on Mandatory Audit Firm Rotation, measuring audit quality indicators and seeking the approval of the Audit Profession Act Amendments.
We appreciate audit firms taking the necessary initiatives to strengthen independence and once again applaud KPMG for their tenacity. Shortly, we will engage in roundtable discussions and glean collective wisdom on certain initiatives of the audit reform proposals which will go a long way in rebuilding public trust.”