Raymond Doherty 24 Jul 2018 03:51pm

KPMG South Africa loses more audit clients

The embattled Big Four firm was dropped by mining company Gold Fields and by mutual savings bank Finbond

Finbond Group Limited announced this week that it has appointed Deloitte to replace KPMG as external auditor following its AGM. Meanwhile, Gold Fields revealed that PwC would takeover from its Big Four rival at the end of the 2018 financial year.

It is the latest blow for KPMG SA, which last month announced the closure of regional offices and hundreds of job cuts after a scandal-hit year.

The firm has been haemorrhaging clients and staff since its close links to the controversial Gupta family became clear. South Africa's auditor general, Kimi Makwetu, also terminated all its public sector contracts.

Five of its leadership team resigned in September after an internal report found the firm had missed warning signs in the audits of Gupta-controlled companies.

The newly appointed head of the South African firm, Nhlamulo Dlomu, was then forced to make a public apology, telling a committee of the South African Parliament that it was “important for us to acknowledge the mistakes we made in the course of doing our work”.

Since then, the firm has lost more partners over its audit of failed bank VBS Mutual, including prestigious clients such as Witwatersrand University in Johannesburg, South African mining group Rainbow Minerals, waste disposal company Interwaste and the African unit of insurance company Munich Re.

Last week, rival firm BDO announced a merger with Grant Thornton Johannesburg. It followed BDO’s purchase of Grant Thornton offices in Cape Town and Port Elizabeth in February.