KPMG is reviewing its entire portfolio of client relationships to determine if any are no longer appropriate, with a particular focus on entities which are considered high risk.
KPMG says it is fully aware that its mistakes have had an immense impact on the standing of the profession.
“As such, we believe that we need to take the initiative in supporting the reform of our profession as a whole and, to this end, we will work with all relevant organisations,” said newly appointed CEO, Nhlamu Dlomu, in a letter to clients.
She says as KMPG as stated publicly, all KPMG professionals are committed to the fight against corruption, to setting new standards for the profession and to the transformation of the country.
“Based on the findings of KPMG International’s investigation, KPMG South Africa (working together with KPMG International), took a number of decisive actions to address the concerns that had been identified. These actions included a series of KPMG South Africa leadership changes and a number of commitments to enhance the firm’s corporate governance, an overhaul of the firm’s public reporting practices and strengthening of our quality processes and controls,” wrote Dlomu.
Apart from having appointed a new leadership team, KPMG is currently also:
- Searching for independent non-executive directors to be appointed to the Board of KPMG SA or an Advisory Board
- Planning to overhaul its governance structure.
- Evaluating best practices in implementing the King IV Report on Corporate Governance.
- Reviewing its portfolio of especially high risk client relationships. KPMG has also decided that no new client will be accepted by the firm without the approval of a specialist team composed of diverse and highly experienced partners.
- Reviewing the full set of skills and competencies in the firm.
- Committed to overhaul the firm’s public reporting and will be publishing an annual Transparency Report, setting out clearly how KPMG is meeting the new standards it has set for itself.
- Planning to donate R40 million to education and anti-corruption not for profit organisations. This sum represents the total fees earned from Gupta-related entities to which KPMG South Africa provided services from 2002.
With effect from 23 October 2017, a new IT system for “Client Engagement Acceptance and Continuance” will be implemented, which “will enhance the evaluation and approval processes of the entire KPMG South Africa client portfolio”.