WISEMAN NKUHLU: Auditors and accountants have been given an integrity wake-up call
Qualified, unbiased professionals are vital for building, defending and maintaining strong national institutions
I have always believed that strong institutions can help to build strong states. And it is driven by this belief that I have dedicated a significant amount of my life to working with South African companies, associations, nongovernment organisations and universities. As we know only too well, many of our institutions have become so weak that our country is now at a defining moment. The world is watching how we respond.
Not so long ago, we were excited and galvanised by the conviction, both as a nation and as a continent, that Africa’s time had come. All of us had good reason to believe that if we worked hard the story of the 21st century would be an African one. Today we are painfully far from achieving that vision.
Corruption, poor administration and consistently weak service delivery have engulfed SA. On the ground, poor financial management and loose accountability cripple the very communities that most need effective local government. At the national level, we have suffered from the weakening of institutions that are vital to ensuring that our democracy is safe and our economy is strong. Our country’s failures can be seen in almost every part of our society.
It is deeply disappointing that 27% of children in SA who have attended school for six years are unable to read with understanding. In Tanzania, this figure is only 4%. GDP per capita is almost 50% higher in Gabon than it is in SA. The average citizen of Senegal can expect to live for almost four more years than the average South African.
As chancellor of the University of Pretoria, it breaks my heart whenever I meet highly talented graduates who intend to leave our country and not return. Sadly, I meet such young people all too often. The reasons that South Africans do worse than so many others who live elsewhere on the continent are varied and complex, but solving this will not be helped if many of our cleverest young people see a better future for themselves only outside of SA.
All leaders have the responsibility for making sure the right environment is created so that future generations can thrive in our country. Sure, this will take much-improved political leadership, but having the right environment extends beyond the government into almost all areas of society, especially in the institutions and organisations on whose probity, expertise and independence we all depend.
The chartered accountant qualification is such an institution. It is only awarded to people who have successfully studied and trained for years and many who have the qualification go on to have careers in which they advise or run businesses and public sector organisations. It is internationally recognised because it is carefully regulated and its standards are strictly enforced.
I qualified as a chartered accountant in 1976 because I wanted to play a part in equipping SA with the financial knowledge and skills it needed to become a prosperous democracy. I felt the weight of responsibility from holding the qualification and have spent the past 40 years promoting the benefits that SA derives from having a pool of chartered accountants.
The auditing profession is another vital institution. It is only with properly audited information that financial markets can function, companies can access financing and governments can make confident policy decisions. It is no exaggeration to say that our economy would seize up if we did not have corporate and public accounts independently verified by people who are qualified, lack bias and show professional scepticism. In exchange for the respect that an auditor’s official opinion should command, auditors must never forget their obligation to the public, particularly in a transforming country like SA. Because here, beyond their statutory role, auditors represent a vital line of defence against misrepresentation, deception and fraud.
Although it is painful for those of us who have dedicated decades to building the profession, recent events serve as a timely wake-up call to the responsibility the profession carries in the public’s eye
The country cannot afford to lose confidence in the audit profession but, sadly, that is exactly what has started to happen.
KPMG’s recent challenges have been well documented, as have those of other large audit firms, companies and advisory firms. Many of those in positions of trust should have known better and the subsequent loss of confidence and breakdown in trust have been deeply damaging for the whole country.
As a young accountant in the 1970s, I saw how the profession was crucial to the efforts being made to build a fairer and more prosperous country. Given recent events, I am not so sure my young self would make the same career choice. This saddens me profoundly, especially as the profession also instils a culture of public service that benefits charities and the wider community. It cannot do these things if it is not strong and is not seen as an attractive career path for talented individuals, particularly the young.
Although it is painful for those of us who have dedicated decades to building the profession, recent events serve as a timely wake-up call to the responsibility the profession carries in the public’s eye.
That’s why I have agreed to become the first nonexecutive chairman of KPMG SA with effect from March 1.
I believe passionately in the role that accountants, auditors and professional advisers play in making our economy efficient and productive and am determined to do what it takes to ensure that KPMG will deliver what the public rightly expects. I want KPMG to be looked up to by all as a place with the strongest governance, ethics and values, which can be seen in everything the firm does.
I am joining KPMG because I believe it is critical that we have a strong profession in SA and that there is competition and choice for clients. Through the thorough examination of what went wrong, we will rebuild a stronger firm that helps to inspire confidence and empower change for the whole country. KPMG’s transformation will take time, but I am determined that it will happen.
I want to set an example to South African professionals everywhere of the obligation people with statutory qualifications have to society. In talking to my friends who are trained in other professions such as engineering, education, medicine and law, I feel all of us need reminding of the constant need to uphold the principles and values that our qualifications embody.
As South Africans, all of us face a critical test. Too many in leadership positions have failed to stand up for the values underpinning our young democracy. The world has been patient with us, but it will not be forever.
In tackling the problems facing our country, all of us have a role to play. Whether it is by using the trust that comes with a particular qualification or simply by calling out injustice and corruption every time and wherever we see it.
I welcome the chance to enter the arena and help ensure the audit profession and KPMG meet the expectations that the country rightly sets for us. I have faith in my fellow chartered accountants, just as I have faith in my fellow South Africans.
• Nkuhlu starts as the chairman of KPMG SA on March 1.