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Johannesburg - When Wiseman Nkuhlu signed on the dotted line to become audit firm KPMG’s new chair, the pen would have been a heavy instrument in his hand because the position comes loaded with additional baggage and challenges that would daunt mos
But in an interview with Fin24, Nkuhlu resolved to put ethics first in his new role and open up the company to the highest scrutiny. He believes that with the necessary action and cooperation, KPMG could be turned around in a year and a half.
In his current role as chancellor of the University of Pretoria, Nkuhlu would have had some experience in handling difficult issues. He was at the coalface of the free higher education protests and attempts to find solutions to difficult questions.
Before that, he served as an economic adviser to former president Thabo Mbeki from 2000 to 2004 and chaired the Development Bank of Southern Africa Transformation team from January to May 1995.
He was also South Africa’s first black chartered accountant, which seems to suggest that Nkhuhlu has the grit and skill to tackle KPMG and all its challenges.
The audit firm has faced criticism, and lost a number of clients, for its previous business relationship with companies linked to the Gupta family. In mid-September last year it cleared out its South African executive leadership team.
His first priority, Nkuhlu told Fin24, is to hold KPMG to high ethical standards and work on governance issues and risk management, ensuring that the embattled organisation adheres to the highest standards.
“It is worrying,” he said, when asked about the clients leaving KPMG. “But I want to make sure that KPMG South Africa is open. KPMG will cooperate with investigators so that South Africa can get a full picture of what happened.”
The firm is also being investigated by the Independent Regulatory Board for Auditors (IRBA) after withdrawing the findings of its controversial South African Revenue Service "rogue unit" report, and for its conduct in auditing Gupta companies.
On Friday IRBA said its probe into KPMG has now extended beyond its initial scope. The initial investigation focused solely on the Gupta companies and the South African Revenue Service.
Nkuhlu said the openness and commitment of KPMG’s new leadership will go a long way towards helping to restore confidence in the company.
“We must convince the market that there has been change,” he said. “Ethical behaviour guides us in our decisions.”
Nkuhlu said KPMG will cooperate fully with investigators, and act on their findings.
“We will follow due process,” he said. “We will place the public concerns first and deal with this to restore confidence.”
The university chancellor said all stakeholder concerns, including those of the public, have to be taken seriously.
“There was a lot of anger when all of this came out. I myself was angry that this could have happened,” he said. And that means opening up KPMG to outside scrutiny, he said.
He believes his own past experience will assist greatly in turning KPMG around. But at the same, Nkuhlu admitted that talk can be cheap and that definite action is needed.
He believes KPMG could be turned around in 18 months.
“A lot can happen in 18 months,” he said. “Let's wait and see if this is not only talk, but also action. It will take time, but we can do it.”
He believes an accountant stands for ethical conduct, transparency and higher values. “As chair of KPMG I want to make sure that behaviour is restored and that auditors again conduct themselves with the highest ethics.”
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