KPMG

“KPMG rocked by South African corruption scandal”

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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 article here

 

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“KPMG US sacks five partners over insider leak”

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Source: economia.icaew.com, 12 April 2017

“Six individuals in total have been let go by KPMG after it discovered they had received advance warnings of what audits were to be inspected by US regulator the Public Company Accounting Oversight Board (PCAOB).

The leaks potentially undermined the integrity of the regulatory process and violated KPMG’s code of conduct.

The firm learned in late February from an internal source that an individual who had joined KPMG from the PCAOB subsequently received the confidential information from a then-employee at the regulator.

KPMG said that it immediately reported the situation to the PCAOB and the Securities and Exchange Commission (SEC).

Following an internal investigation, the firm found that the six KPMG individuals either had improper advance warnings of engagements to be inspected by the PCAOB, or were aware that others had received such advance warnings and had failed to properly report the situation in a timely manner.”

Source article here

 

UK is top for inbound acquisitions

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The UK was the number one major European economic target for inbound deals from the emerging markets during the second half of 2015, according to KPMG’s Cross-Border Deals Tracker.

Andrew Nicholson, head of M&A for KPMG in the UK, said: “Both the US and UK have been seen by many as being at the forefront of the economic recovery, so it is not surprising that both saw an influx of interest from emerging market suitors acquiring target companies.”

However, overseas investors are factoring in Brexit risk, so with the vote only ten weeks away they are not minded to progress transactions until the outcome is known.

KPMG press release here