Audit Foundations 1

Ethics
 Greed and Ethics in the Workplace

2015 KPMG Services (Pty) Ltd, a South African entity and a member firm of KPMG International, a Swiss cooperative. All rights reserved. 2
Agenda

Ethics Auction
Scenario Questions
Wrap Up

3
Agenda

Ethics Auction
Scenario Questions
Wrap Up

4
 Create the perfect KPMG employee

respectful
confident
caring
healthy


excellent varsity education
has lots of friends in the industry
Total of 15


honest values
family ties to the government
team player
good researcher after the facts
spends money wisely choose
has integrity
physically attractive wisely!
good leader
multitasker

2015 KPMG Services (Pty) Ltd, a South African entity and a member firm of KPMG International, a Swiss cooperative. All rights reserved. 5
 Create the perfect KPMG employee

respectful
confident
caring
healthy


excellent varsity education
has lots of friends in the industry
Total of 15


honest values
family ties to the government
team player
good researcher after the facts
spends money wisely choose
has integrity
physically attractive wisely!
good leader
multitasker

2015 KPMG Services (Pty) Ltd, a South African entity and a member firm of KPMG International, a Swiss cooperative. All rights reserved. 6
 KPMG Values

We lead by example
We work together
We respect the individual
We seek the facts and provide insight
We are open and honest in our communication
We are committed to our communities
Above all, we act with integrity

2015 KPMG Services (Pty) Ltd, a South African entity and a member firm of KPMG International, a Swiss cooperative. All rights reserved. 7
Agenda

Ethics Auction
Scenario Questions
Wrap Up

8
 Scenario 1

A good family friend is an audit manager in your

department. She is the editor of the local churchs
newsletter.

You have noticed that she often uses the offices

photo copier to make the over 200 copies of the
newsletter. She always uses the copier after hours
when there are few people in the general office area.

What do you do?

2015 KPMG Services (Pty) Ltd, a South African entity and a member firm of KPMG International, a Swiss cooperative. All rights reserved. 9
 Scenario 2

You are currently on one of your favourite audits. You have been allocated
the responsibility of the Inventory section, amongst others.

During the year, the previous inventory manager resigned and was
replaced by an old school friend of yours who you have not seen for years.
As the audit progresses, you rekindle your friendship.

As you begin auditing the inventory balance, you discover some unusual
transactions which occurred while your friend has been the inventory
manager. You approach him with some questions on these transactions
and he breaks down and tells you how he is struggling financially and
needs to provide for his sick mother. He begs you not to say anything about
these transactions as he will then be fired.

What do you do?

2015 KPMG Services (Pty) Ltd, a South African entity and a member firm of KPMG International, a Swiss cooperative. All rights reserved. 10
 Scenario 3

There is mandatory training scheduled for your year group in a

weeks time.

A colleague friend, in your department, is on a very tight

deadline next week and her manager has said she may not
attend the training.

You are not planned on an audit next week and will be

attending the training.

She has asked you to sign the register for her and take
handouts and notes so you can take her through the training at
a later stage.

What do you do?

2015 KPMG Services (Pty) Ltd, a South African entity and a member firm of KPMG International, a Swiss cooperative. All rights reserved. 11
 Scenario 4

You are part of the audit team currently auditing a JSE listed
client.

In the clients canteen, you overheard that they will be making

a public announcement in three days, that they have won a
mega-order worth millions.

At a family braai on Sunday, your Dad mentioned that he is

about to invest a large amount of money in that company.

What do you do?

2015 KPMG Services (Pty) Ltd, a South African entity and a member firm of KPMG International, a Swiss cooperative. All rights reserved. 12
 Scenario 5

You were the AIC on a new audit client which is a luxury game
farm in the Eastern Cape. The audit went extremely well and
all the deliverables were issued within the deadline.

A week after the AFS were signed, you received a call from the
FD of the game farm. He thanks you again for the hard work
during the audit and offers you and a friend a free weekend at
the lodge, including all meals and game drives, as a thank you
gift. No one else on the audit team was offered this gift.

You know, from auditing the revenue section, that the cost per
person per night is R2400, excluding the game drives.

What do you do?

2015 KPMG Services (Pty) Ltd, a South African entity and a member firm of KPMG International, a Swiss cooperative. All rights reserved. 13
 Scenario 6

You are very excited that you and your best friend in the department are
being sent on secondment to Kenya for two months.

At the airport, you each buy two magazines, to read on the aeroplane, and
a slab of imported Belgian chocolate. While you are in Kenya, you take
turns in paying for meals. You also buy gifts for your family and some
toiletries, as you ran out after the first 2 weeks. Your friend jokingly says
that he needed to use more deodorant in Kenya as it was so hot!

Two weeks after you arrive back to the South African office, you are both
called into the partners office. He has print-outs of all your expense claims.
You can see that your claim is R3000 less than your friends. The partner
asks you to explain. You realise that your friend has claimed all the
purchases he made while in Kenya, including gifts and toiletries.

What do you do?

2015 KPMG Services (Pty) Ltd, a South African entity and a member firm of KPMG International, a Swiss cooperative. All rights reserved. 14
Agenda

Ethics Auction
Scenario Questions
Wrap Up

15
 Ethics Checklist

When making a decision or following a directive, ask

yourself:
Is my behaviour consistent with KPMGs core
values and its ethical and professional standards?
Does my action comply with the spirit and letter of
KPMG policy and applicable law?
Is my decision being driven by responsible
professional judgement?
Would I feel confident that I could explain my decision
if it were made public?

2015 KPMG Services (Pty) Ltd, a South African entity and a member firm of KPMG International, a Swiss cooperative. All rights reserved. 16
 What Questions Do You Have?

2015 KPMG Services (Pty) Ltd, a South African entity and a member firm of KPMG International, a Swiss cooperative. All rights reserved. 17
17
Thank you

2015 KPMG Services (Pty) Ltd, a South African entity.

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affiliated with KPMG International. KPMG International
provides no client services. No member firm has any authority
to obligate or bind KPMG International or any other member
firm vis--vis third parties, nor does KPMG International have
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rights reserved.