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SAICA welcomes KPMG’s move to stop offering non-audit related services
Earlier this week, KPMG announced that it would be ceasing all of its non-audit related services to its listed audit clients with effect from the 31st of March. The international audit firm said that the move is aimed at improving the perception of auditor independence and protecting the interests of the public. The South African Institute for Chartered Accountants (SAICA) welcomed this decision, saying this is an important step in the journey to the restoration of trust in the profession. SAICA CEO, Freeman Nomvalo joins CNBC Africa for more.
Wed, 17 Feb 2021 11:02:52 GMT
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AI Generated Summary
- The significance of KPMG's decision to halt non-audit related services to improve auditor independence and public trust
- The impact on audit firms and the need for evolving business models to accommodate the shift in focus
- The importance of a strong and independent regulator in restoring integrity in the audit profession and addressing corporate scandals
South African Institute for Chartered Accountants (SAICA) has welcomed KPMG's recent announcement to halt all non-audit related services for its listed audit clients starting from the 31st of March. The move by KPMG is seen as a step towards improving the perception of auditor independence and safeguarding the public's interest. SAICA CEO Freeman Nomvalo expressed support for this decision, stating that it will address the conflict of interest concerns in audit work for listed entities. While SAICA is not mandating other members to follow suit, the institute encourages all members to prioritize audit quality and independence to enhance trust in the profession. The interview with CNBC Africa shed light on the implications of this strategic shift by KPMG and its potential impact on the industry. Nomvalo emphasized that auditing firms will still require consulting skills to enhance their assurance activities despite the shift in focus, suggesting that job losses may not necessarily result from this transition. He highlighted the need for evolving business models that can accommodate the changing landscape and foster innovation. The discussion also touched on recent developments at the regulatory body URBA, including the resignation of the CEO and the reconstitution of the board. Nomvalo stressed the importance of a strong and independent regulator to bolster trust and integrity in the audit profession. While SAICA will not directly participate in the appointment of the new board at URBA to maintain regulatory independence, the institute remains committed to supporting initiatives aimed at strengthening the regulatory framework. Lastly, the conversation turned to the Steinhoff scandal and the role of audit firms in corporate governance failures. Deloitte's decision to compensate shareholders impacted by the scandal was noted, with Nomvalo emphasizing the importance of ethical conduct and upholding the public interest for all members. SAICA refrained from speculating on the actions of individual firms involved in similar scandals but reiterated the importance of maintaining ethical standards in the profession.
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