As global companies implicated in a graft scandal in South Africa scramble to contain the damage to their reputations, politicians and law enforcement agencies are prevaricating and stalling official investigations.
The South African Revenue Service is considering instituting legal proceedings against KPMG LLP’s local unit for reputational damage after the auditing firm withdrew the conclusions of a report that was used in a police probe against former Finance Minister Pravin Gordhan and led to the removal of senior staff at the agency.
KPMG LLP said the head of its South African office and seven other senior executives quit after an internal investigation found that work done for the politically connected Gupta family fell “considerably short” of the auditing firm’s standards.
A little-known Republican Senate aide is in line to lead the accounting industry’s watchdog, setting up an official who lacks experience in the auditing profession for one of the highest-paying jobs in financial regulation.
More than three-quarters of directors at public companies polled by BDO USA expect a tax overhaul to be achieved before the end of Trump’s term in office, but only 22 percent anticipate it will happen before the end of this year.
A recent academic study lends support to the Public Company Accounting Oversight Board’s regulatory oversight of auditing firms, suggesting it gives investors greater confidence in companies, in turn leading to more capital available to businesses.