Newly-appointed chief executive of KPMG South Africa, Nhlamu Dlomu (Pic: KPMG website)

Johannesburg - Newly-appointed chief executive of KPMG South Africa Nhlamu Dlomu has committed to restore the embattled audit firm's fundamental values of ethics and integrity in a bid to salvage the firm's credibility as she takes over the helm at a time of deepening crisis.

This comes as Trevor Hoole tendered his resignation on Friday as the chief executive KPMG SA, with chief operating officer and country risk management partner Steven Louw also stepping down following a storm created by the work the firm did for the South African Revenue Service (Sars) and on behalf of the Gupta family. 

Five other senior partners of KPMG SA also decided to leave the firm. 

KPMG SA would also be taking disciplinary action seeking the dismissal of Jacques Wessels, the lead partner on the audits of the non-listed Gupta entities.

KPMG received criticism regarding the "SARS Report" in which it was commissioned by the Sars to investigate allegations of a rogue unit allegedly set up by former finance minister, Pravin Gordhan, who was SARS commissioner at the time.

Dlomu, who was previously KPMG SA's head for people and change, is a highly experienced partner with extensive client experience, leading significant transformation in the financial services and other industry sectors in South Africa and overseas. 

She has over 17 years experience in management consulting and management roles gained mainly in organisational development and human resources across various industry sectors.

Dlomu said she was very proud to have been named the new chief executive of KPMG in South Africa.

"KPMG has a long and distinguished record of service in South Africa. Ethics and integrity are fundamental values of KPMG and these will be the guiding principles of my leadership," Dlomu said.

"To this end, my first order of business will be to build a management team committed to these principles. That team will be announced in the coming days. The skill, experience and energy of KPMG's new management team will ensure stability and high quality service to our clients."

Dlomu also said she would be appointing another partner from the KPMG International network to serve as the interim risk management partner, "to bring international expertise and best practice to improve risk management and quality control for KPMG South Africa".

KPMG said the findings of the investigation have reinforced the criticality of a leadership and governance model that sets the right tone from the top, and ensures appropriate accountability and responsibility at every level of leadership within the firm.

In addition to the leadership changes set out above, KPMG South Africa said it will enhance its corporate governance processes. 

In December 2014, KPMG SA was commissioned by the Sars to perform an extensive document investigative review which resulted in the "Report on Allegations of Irregularities and Misconduct".

Gordhan was investigated by the Directorate for Priority Crime Investigation (Hawks) over the alleged unit, but was eventually charged with an administrative issue over the rehiring of former deputy commissioner Ivan Pillay and his pension package.

KPMG said that the evidence in the documentation provided did not support the interpretation that Gordhan knew, or ought to have known, of the “rogue” nature of this unit.

KPMG said it recognised and regretted the impact its report has had, and that it had "no political motivation or intent to mislead".

KPMG then "offered to repay the R23 million fee" it received for the work performed for Sars, or "to make a donation for the same amount to charity".

KPMG was also criticised for having four of its partners attend the lavish Gupta wedding at Sun City in 2013 while it was auditing a Gupta-owned Linkway Trading, which was implicated in siphoning millions of rand from a Free State dairy farm project to fund the wedding.

With respect to the audits of the Gupta entities, KPMG said it was evident from the investigation that the audit work in certain instance fell well short of the quality expected, and that the audit teams failed to apply sufficient professional scepticism and to comply fully with auditing standards. 

The firm also accepted that the partners should not have attended the Gupta wedding.

KPMG said it would be making a donation of R40 million into education and anti-corruption not for profit organisations from the fees it had earned from Gupta related entities from 2002.

Dlomu said this had been a "painful period", also acknowledging that the firm had fallen short of the standards it set for itself. 

"I want to apologise to the public, our people and clients for the failings that have been identified by the investigation," Dlomu said.

"It is important to emphasise that these events do not represent KPMG, our people or the values we have adhered to over decades of committed client service. My pledge and promise to the country is that we can and will regain the public’s confidence."