EY and Deloitte to replace KPMG as Nedbank's external auditors
KPMG chairman Wiseman Nkuhlu commends the dilligence and professionalism of the team who served Nedbank.
Nedbank Group Limited and Nedbank Limited announced this week that it will be rotating external auditors when KPMG’s contract ends on 31 December.
The banking group will be appointing EY and Deloitte as joint external auditors in May 2019 to replace KPMG. The appointment will be subject to approval from shareholders at annual general meetings in 2019.
The new appointment will be in line with the Independent Regulatory Board of Auditors’ rules on mandatory audit firm rotation, which stipulate that firms may not serve as an auditor of a public interest entity for more than 10 years in a row.
KPMG responded to the announcement saying that they were disappointed to lose Nedbank as a client, but that they understood the decision was part of the industry-wide move towards mandatory audit firm rotation, which seeks to ensure objectivity and robust auditing services are provided to all public interest entities.
KPMG Chairman, Professor Wiseman Nkuhlu, responded:
“It is always disappointing to lose a client, but we remain very proud of the work that we have performed for Nedbank over many years, and of the diligence and professionalism of the team who served them.”
The announcement came shortly after KPMG was implicated in a report released by advocate Terry Motau about the VBS Bank scandal and adds to the loss of the audit firm’s clients that resulted from their involvement with companies owned by the Gupta family.
Barclays Africa, Absa, Sasfin, the Auditor General of South Africa, Wits, Foschini, Munch Re, Hulisani, Sibanye Stillwater and Redefine Properties all dropped KPMG as their auditor.
Nkuhlu added that KPMG was a “very different business from a year ago” as major changes had been introduced, which have included a focus on governance and leadership, the client roster, quality as well as culture and ethics.
“I am confident we are taking the right steps and that this is being recognised by clients,” said Nkuhlu.
In September the Business Leadership SA lifted KPMG’s membership suspension, which Nkuhlu said was a welcome recognition of the changes they are making and has bolstered their determination to continue taking all measures to restore trust in the firm.