By Alec Hogg
Ian Fleming, the man who created James Bond, told us that in the spying game “Once is happenstance. Twice is coincidence. Three times is enemy action.” In business, I’m not sure how many times companies can afford to slip, but KPMG is surely coming to the point of no return.
The complicity of KPMG’s South African arm in the GuptaLeaks scandal must be worrying its global brand custodians. The biggest surprise thus far is that unlike McKinsey and SAP, the international headquarters of KPMG has allowed the outpost to shape some awfully poor responses.
Then again, maybe that’s because the firm is otherwise occupied. Another scandal hit yesterday involving KPMG’s 2011 “unqualified” thumbs up to the 2011 audit of Miller Energy. The since bankrupt oil and gas company told investors Alaskan wells bought for $5m were worth 100 times that much.
The US Securities and Exchanges Commission fined KPMG $6.2m for its blunder and demanded the firm repaid the full $4.7m it had received in audit fees. That’s a costly mistake. But chump change compared with the reputational damage.