According to a national daily, the Pakistani government has forbidden a prominent audit firm called ‘KPMG Pakistan’ from performing audits of public interest corporations for one year and levied a penalty of Rs. 3.5 million for non-compliance with requirements.
Following an investigation of the audit firm’s records, the Audit Oversight Board advised KPMG Taseer Hadi and Co. Chartered Accountants “not to allow the concerned engagement partner to conduct audits of public interest companies for one year, with a requirement of 100 training hours competition.”
“An auditor’s responsibility is to conduct an audit in accordance with international auditing standards,” the statement continued. The inspection report concluded that the auditor failed to carry out its auditing responsibilities in accordance with applicable auditing standards. The order’s highlighted flaws violate applicable auditing standards, eroding investors’ confidence in a public interest company’s audited financial statements”.
The Audit Oversight Bureau’s decision comes as the government seeks forensic audits of five major loss-making state-owned firms. This is being done in preparation for the privatisation of enterprises such as Pakistan Railways and Pakistan International Airlines.
The bureau stated that in November and December of last year, it conducted a direct inspection of KPMG Taseer Hadi and Co. Chartered Accountants.
“The firm received a report on the findings in February of this year, and the firm responded in writing for the first time in March 2021. Following that, a conference between AOB officers and the firm was held to review the findings and responses,” it stated.
Since 1982, Peat Marwick has been a member of KPMG International and has audited numerous leading corporations in Pakistan.