Credibility Is Everything

Credibility is everything to an auditing firm, and that is why KPMG cleaned house in South Africa as a result of a scandal. An auditing firm cannot afford to fight regulators or to work through one with headlines detailing progress or lack of it. Is it unfair to partners if they were not involved? Yes, it is. KPMG could have reassigned them pending the outcome of an investigation, but that might look like it was hiding something. It was good for the senior partner to take responsibility since he was in charge, but that doesn’t assuage the cost to reputation from the misdeeds themselves. There is no merciful way to handle a situation like this. Public perception demands action even if the blade cuts deeply.