Read this article by Ms Lee Su Shyan “When auditors fail to measure up to mark” from some time back.
PricewatehouseCoopers (PwC), who had been the auditor for last few years before the debacle, was blamed for NOT raising the alarm on the various excesses and deficiencies within NKF.
KPMG, who was appointed to do a special audit, found costs and subsidies were inflated and manipulated.
What did Ms Lee say to mitigate PwC’s sad position?
There were supposed to be other people or entities within NKF who also have responsibilties to protect the stakeholders’ interests. These people or entities were:-
- independent directors,
- audit committee and;
- internal auditors.
All these people or entities did not challenge “the quiet acceptance that ran through the organisation”. So does it imply that PwC’s responsibility as an auditor, would be any lesser?
FYI – KPMG found errors totalling $2mio against an adjusted surplus of $29.2mio. Deemed not all that “material”. So in numerical terms, PwC’s performance is not that bad.
Ms Lee highlighted the blessings that we should count.
- NKF’s assets and reserves are largely intact.
- There were some but not crippling excesses by its ex-chief executive.
- NKF is still functioning and serving its patients today.
- PwC had been charging NKF a nominal annual audit fee of $35,000 as compared to hundreds of thousands dollars chargeable for similar audits.
- KPMG too charged NKF a nominal fee of only $100,000 for the special audit.
Since Humpty Dumpty (NKF) has had a great fall, all the King’s men and all the King’s horses are putting Humpty Dumpty back together again (for the sake of all the kidney patients).