Read the case study below and answer ALL questions that follow KPMG: Rebuilding Trust in South Africa By September 2019, six months had passed since KPMG South Africa had released its integrated annual report titled Rebuilding Trust, Redefining Professionalism. Since 2017, the firm had lost R3 billion ($204 million)1 in revenue and suffered significant reputational damage, after being caught up in a number of scandals involving corruption and unethical conduct. The report detailed the progress it had made in rebuilding itself, enhancing the quality of its work and restoring good governance. Had the company done enough to acknowledge and rectify its legal and ethical lapses, and restore trust? KPMG Company Background In everything KPMG professionals do, there is an obligation to perform all their work in a way that earns and builds public trust: in KPMG, in business and the capital markets they serve Larry Leva, KPMG global head of quality, risk and regulatory, 2017 One of the Big Four global auditing companies, KPMG operated as a worldwide network of independent member firms affiliated with KPMG International, based in Switzerland. KPMG International served as the coordinating entity providing governance and oversight support for locally- owned and managed firms. Collectively employing over 219 000 people in 152 countries, member firms committed to an agreed set of values and quality standards that governed how the firms operated and provided services to clients. Each member firm took responsibility for its own management and the quality of its own work, with partners and professionals expected to act with integrity at all times. KPMG member firms received international recognition for the quality of their workplace culture and the services provided to clients, and the firm consistently featured in the worlds top 100 companies to work for. KPMG firms primarily offered audit, tax and advisory services. The companys advisory services focused on three areas: management consulting deal advice, including corporate finance and restructuring and risk consulting, including financial risk management. KPMG operated in a range of industries, including energy and natural resources, financial services, government and the public sector, healthcare, and infrastructure and technology. Clients included business corporations, governments, public sector agencies and not-for-profit organisations. In Africa, KPMG operated 30 firms in 54 countries. KPMG South Africa (KPMG SA) had been in existence for over 120 years. The firm operated from four regional business hubs with offices in Cape Town in the Western Cape, Port Elizabeth in the Eastern Cape, Umhlanga in KwaZulu-Natal and Parktown in Johannesburg, Gauteng. The Scandals The role of a professional service firm such as KPMG is ultimately to serve the public interest and to stand for ethical conduct, transparency and respected values Professor Wiseman Nkhulu, KPMG SA non-executive chairman elect In line with its values, KPMG International had an extensive anti-bribery and corruption programme as part of its global code of conduct. The code required all KPMG professionals to act lawfully and ethically, and prohibited bribery and corruption, including illegal or unethical behaviour by clients, suppliers or public officials. It also stipulated that staff members undergo training in ethical behaviour on a regular basis. KPMG SAs governance scandals arose from work that the company did for organisations and individuals linked to the attempt by South Africas President at the time, Jacob Zuma, to deflect attention from corruption investigations into himself and his allies, and from members of the Gupta family, a wealthy and politically influential family, whose business empire spanned computer equipment, media and mining. The Guptas had close personal and business ties to Zuma, and over the course of a few years, evidence emerged that they were exerting undue influence over government policies and dictating high-level government appointments in exchange for commercial opportunities a project that came to be known as state capture. KPMG SA and the SARS Rogue Unit Report In December 2014, Tom Moyane, newly-appointed by Zuma to the position of commissioner of the South African Revenue Service (SARS), despite the fact that he had no previous tax experience, asked KPMG SA to conduct a forensic investigation into the SARS Special Projects Unit. This unit conducted high-risk tax, customs and counterfeit goods investigations. Between 2010 and 2014, the unit had been conducting multiple investigations into high-profile tax offenders, including prominent politicians and politically-connected businesspeople with links to the illegal tobacco industry and crimes such as tax evasion and money laundering. Under the leadership of KPMG SA forensic auditor Johan van der Walt (CA) (SA), a team of 30 KPMG SA employees conducted an extensive document investigative review which resulted in the compilation of a 139-page report called the Report on Allegations of Irregularities and Misconduct, covering the period 2003 to 2015. Van der Walt maintained that his team reviewed over 850 000 emails 23 computer hard drives and considered in excess of 1.36-million documents including hard copy documents located onsite at SARS during a search operation performed by us [KPMG]. In its report, KPMG SA claimed that the Special Projects Unit was in fact a rogue spy unit conducting covert intelligence operations while operating within SARS. The report detailed a number of allegations, including that members of the unit had broken into and planted listening devices in Zumas house, had broken into taxpayers homes and illegally intercepted telecommunications and emails, had spied on top cops and prominent politicians, had been involved in the deaths of former SARS officials, and were involved in trying to swing elections after having infiltrated the African National Congress (ANC) using bodyguards. Furthermore, the report alleged that the unit had access to a secret fund of over R560 million and operated using front companies, including charities and a brothel. A draft version of the report was leaked to the Sunday Times newspaper on 4 October 2015. The mainstream media bought into the narrative, which resulted in a series of sensationalistic articles about the unit. According to political commentator Max du Preez, the false stories about the unit were part of a project to discredit and undermine several state agencies that tried to investigate Zuma and some of his wealthy friends and to replace their leadership structures with Zuma loyalists Extract from: Dr Grant Sieff and Dr Amanda Bowen (2020). KPMG: REBUILDING TRUST IN SOUTH AFRICA. Wits Business School Case Studies Collection. QUESTION 1 (5 Marks) If you were to investigate the matter presented in the case study, indicate how you would go about it. Formulate a problem statement, the main aim of your study, and TWO (2) objectives. Substantiate these elements with evidence from the case. QUESTION 2 (20 Marks) Based on your response to Question 1, explain in full, the methodological steps that you would implement to investigate the situation that you have highlighted. Remember to justify your response. QUESTION 3 (10 Marks) In doing data collection, describe at least five (5) important issues that you would consider to ensure that you do not violate the participants in any way. QUESTION 4 (5 Marks) Based on the scenario given in the case study above, what advice or recommendations would you give to the management of KPMG to restore the preferred situation? Substantiate your reasoning