Source: accountancyage.com, 27 September 2017
“KPMG’s South African branch has come under fire and suffered a severe reputational hit after becoming caught up in a growing corruption scandal surrounding one of the country’s most powerful families, the Guptas.”
“KPMG is accused of facilitating the family in tax evasion and corruption. The firm denies any wrongdoing but admits to missing several “red flags” in relation to the family’s accounts. At least eight senior KPMG South Africa officials have resigned in the wake of the scandal, including CEO Trevor Hoole.”
“KPMG conceded that audits of Gupta companies: “fell well short of the quality expected, and that the audit teams failed to apply sufficient professional scepticism and to comply fully with auditing standards”.”
“As a result of the scandal KPMG have lost several audit contracts in South Africa, with even more companies considering severing ties. The firm is under investigation by South African regulatory body IRBA and risks being removed from the country’s auditors’ register.”
Source: offshorenewsflash.com 23 August 2017
“The Federal Court of Canada has ruled that the Canadian Revenue Agency may not conduct further in-person interviews with representatives from a multinational corporation concerning its transfer pricing affairs, having already discussed earlier tax years.
Ruling in favor of Cameco Corporation, the Federal Court, in Minister of National Revenue v Cameco Corporation (2017 FC 763), noted that the Minister’s power “is not so wide to compel an indeterminate number of people for oral interviews.””
“Tax officials crafting plan to jointly identify large multinationals with low risk of tax avoidance”
Source: mnetax.com 7th June 2107
“Eight countries are working on a new program to jointly review large multinationals’ tax affairs and, if appropriate, provide assurances to the multinational that it will not likely be audited in those jurisdictions with respect to specific tax risks, officials said June 6 in Washington at a conference sponsored by the OECD, USCIB, and BIAC.
The program, which will be piloted by Italy, US, UK, Spain, Austria, Germany, Netherlands, and Canada, could eventually be offered by all 47 countries participating in the Forum on Tax Administration, namely, all OECD and G20 countries plus a few others.”
Source: bbc.co.uk 24 April 2017
Accountancy firm Grant Thornton (GT), has been fined £2.3m and severely reprimanded by the Financial Reporting Council (FRC) over failings in its audit of a company called AssetCo.
The regulator said GT, and its partner Robert Napper, had admitted a “lack of professional competence and due care”. This had allowed AssetCo to falsely inflate its value and its share price.
The FRC said that the auditors had been deceived by the management of AssetCo, a fire engine manufacturer once owned by British Gas. But the auditors had been at fault by failing to employ the required level of “professional scepticism”.
The FRC also said that the failings of GT, and the now-retired Mr Napper, in the audit of AssetCo’s accounts were not deliberate or reckless and did not amount to dishonesty. Even so, the AssetCo audits were so poor that the accountants’ behaviour “fell significantly short of the standards reasonable expected of them”, and showed a “widespread lack of professional competence and due care in the performance of the audits.”