Pravin Gordhan: KPMG Should Face The Music

"When public interest is ignored, it has serious consequences for the poor."
Former finance minister Pravin Gordhan.
Former finance minister Pravin Gordhan.
Siphiwe Sibeko / Reuters

Former finance minister Pravin Gordhan says audit firms like KPMG should face the repercussions of their actions in line with the offence they committed.

"One could argue that when you live in an economic system which says you have to provide the highest levels of profits at any cost, then surely one of the consequences must be the kind of collusion that we see between professional firms and businesses," he said.

"Like in any justice system, repercussions should be lined with the crime or the offence."

Gordhan was speaking alongside economics expert Iraj Abedian and accounting magnate Nonkululeko Gobodo during a public debate on the role of auditing firms at the University of the Witwatersrand on Wednesday night.

The debate came after global auditing firm KPMG withdrew its findings and recommendations on its SA Revenue Service (Sars) "rogue unit" report that delved into the legality of an elite investigative unit within the organisation in 2007. The findings cost senior members, including Gordhan –- who was at the helm of Sars at the time –- their jobs.

It then emerged that KPMG allegedly colluded with the Guptas to pass off wedding expenses –- where R30 million in taxpayers money was allegedly laundered off via a shell company to pay for the family's extravagant wedding in Sun City in 2013 –- as business costs.

Gordhan did not mince his words. "The question that arises is whether we have auditor rotation or not? It is the question of overfamiliarity. The phenomena we are looking at currently is that instead of providing assurance, it appears some firms become associates of businesses," he said.

"Are we able to say that firms are able to command the kind of leadership required to change the culture within large companies and what does it take to change that culture?"

He said when public interest is ignored, it has serious consequences for the poor.

"We often as human beings focus on the immediate and the event-related matters. Sometimes you can remove the symptom temporarily, but the system remains in place. We need to revolutionise the system," Gordhan said.

Abedian also slammed auditing firms and their role in unethical business practices.

"It's about national resource capture... We are focusing on auditors as we should, but joined at their hip are the chartered accountants. Nobody in the private or public sector could have abused resources if there isn't a CA involved," Abedian said.

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