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Recovering from an ethical scandal

Tom Fox | October 11, 2017

How does a company restore its reputation after an ethical failure? Name the recent corporate scandal, from Volkswagen to Wells Fargo to Equifax, all involving different issues and you can begin to see the challenges a company will face. Yet, what if the scandal is based on the failure of technical competence, as was recently seen with KPMG in South Africa? The international accounting firm found itself in hot water for its faulty audits of the embattled Gupta family. It will be interesting to see how KPMG can restore its reputation and if this model will work for other companies that might find themselves in similar situations going forward.

The company has admitted that it made serious errors in both the technical audits and areas of judgement. The company dismissed eight senior executives from KPMG’s division in the country and brought in Nhlamu Dlomu to head the South African operations for the company. KPMG also announced that it would retain a senior South African...

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