Tuesday, 23 July

Feasibility of KPMG-Ghana accepting an engagement to conduct a special audit of a contentious contract between Ghana Revenue Authority-Ministry of Finance and SML

Feature Article
Prof Samuel Antwi


Globally renowned for its professionalism and integrity, KPMG is a world class auditing firm, which is also one of the top four accounting firms. Nonetheless, there are a number of issues with the firm’s decision to accept an engagement to conduct a special audit of a supposedly contentious contract between SML and the Ghana Revenue Authority (GRA). Some of the criticisms have come from IMANI-Ghana, ACEP, and the Fourth Estate (supported by MFWA). Some of the main arguments against KPMG’s decision to accept the Government of Ghana’s request to conduct the special audit include:

a.       the difficulty to complete the assignment within the stipulated time period,

b.      the independence of KPMG considering the fact that it has accepted multiple public sector engagements, and

c.       the inadequate terms of reference in the contract or narrow scope of assignment.


Audit assignment completion deadlines

It has been argued that the deadlines established for finishing the audit present additional challenges to KPMG for the special audit assignment. Thus, with the complexity of the contract and the need for close examination, the two weeks allotted to KPMG are not sufficient to conduct a comprehensive audit. However, we find this argument untenable because KPMG is a globally recognised audit firm with a large pool of the crème de la crème audit professionals ready to execute the assignment within the allotted time period, timeously and professionally. Again, if after the expiration of the time period and the assignment has not been completed, KPMG could negotiate with government for an extension of time to enable KPMG to carry out an exhaustive audit without sacrificing the content of their output.


Independence challenges

In Ghana, think tanks such as IMANI-Ghana and ACEP have expressed concerns about the possible impact on KPMG’s independence with their acceptance of this special audit engagement. They maintain that the Ghanaian government has given KPMG multiple public sector contracts, which might lead to a conflict of interest. Therefore, accepting this special audit engagement might make it more difficult for KPMG to evaluate the GRA-SML contract objectively.

Again, we find this argument weak. Professionally, in order to preserve their independence in accepting this special audit engagement, KPMG needs to make sure that sufficient safeguards are in place. This entails assigning an independent team to carry out the special audit that is unrelated to their other agreements with the Ghanaian government. When these safeguards are in place, then KPMG is absolved from arguments of independence.


Terms of reference for the special audit engagement

Another area of concern levelled against KPMG’s acceptance of the special audit engagement is the contract’s terms of reference. The argument continues that crucial topics like the procurement procedure, which are necessary to assess the contract’s validity, are left out of the contract. Hence, KPMG might not be able to carry out an exhaustive audit that covers all pertinent facets of the GRA-SML contract without a comprehensive scope. When this happens, it could result in erroneous or incomplete conclusions drawn by KPMG, which would damage the audit’s credibility.

The crux of the matter regarding terms of reference for an audit engagement lies with the assignor of the contract. KPMG has the right to accept the special audit engagement. However, in order to incorporate important aspects and expand the audit scope like the procurement process in the audit’s terms of reference, KPMG and the assignor of the contract should collaborate. Again, KPMG could propose to the assignor/President to expand the scope of the special audit based on the preliminary audit findings. This would make it possible for KPMG to carry out a more thorough audit that covers every pertinent facet of the contract.



In conclusion, KPMG in Ghana has legally and professionally accept the special audit engagement considering its tract record of public sector audit engagements. The potential impact on their independence, the inadequacy of the contract’s terms of reference, and the challenging two week timelines set for completion are all significant concerns that were taken into consideration before the acceptance of the engagement. In this case KPMG prioritised once again integrity and professionalism in their decision-making process to uphold their reputation as a trusted audit firm.



Written by Prof Samuel Antwi

Dean  of School of Graduate Studies

University of Professional Studies, Accra (UPSA)


Source: Prof Samuel Antwi