The Government of Pakistan has barred KPMG Pakistan’s Partner from conducting an audit of public interest companies for one year and also imposed a penalty of Rs. 3.5 million due to non-compliance with the standards, reported a national daily.
The Audit Oversight Board after doing an inspection of the records of the audit firm directed KPMG Taseer Hadi and Co. Chartered Accountants “not to allow the concerned engagement partner to conduct an audit of public interest companies for one year with a requirement of a competition of 100 training hours.
The statement added, “The responsibility of an auditor is to conduct an audit in accordance with the international auditing standards. The findings of the inspection report pointed out that the auditor failed to discharge its responsibilities under the applicable auditing standards. The issues highlighted in the order are in violation of the applicable auditing standards, which limit investors’ confidence in the audited financial statements of a public interest company”.
The decision by the Audit Oversight Bureau has come while the government is trying to get the forensic audits of five top loss-making state-run enterprises. This is being done for the privatization process and includes entities like Pakistan Railways and Pakistan International Airlines.
The bureau said that it had conducted a direct inspection of KPMG Taseer Hadi and Co. Chartered Accountants in November and December last year.
“A report on the findings was shared with the firm in February this year and the firm provided its first written response in March 2021. Thereafter, a meeting was held between the officers of AOB and the firm to discuss the findings and responses,” it said.
A member of KPMG International got a full member firm status of Peat Marwick, and is engaged in the auditing of various top companies in Pakistan since it was founded in 1982.