The appointment of Nkonki as joint auditor of Telkom is "a major step towards transforming the South African auditing profession", says managing partner Mitesh Patel in an exclusive interview with CFO South Africa. Last week Telkom shareholders approved Nkonki's appointment as external auditors with EY.
"It also proves that shareholders recognise the ability for local black home grown firms to take on large audits and deliver quality and add value."
Communications services provider Telkom has a consolidated operating revenue of R31.7 billion and listed profit after tax from continuing operations of R2.9 billion for the year ended 31 March 2015. It is ranked in 70th position in the Top 100 of listed companies on the JSE. Its CFO Deon Fredericks was nominated for the 2016 CFO Awards, recognising his guidance throughout the firm's turnaround and the Business Connexion acquisition.
What does the appointment mean for Nkonki and for yourself as a managing partner?
"The appointment as joint auditors of Telkom, shows that the company and its shareholders have confidence in our capability and skills set to audit a large market cap company listed on the JSE. It also proves that shareholders recognise the ability for local black home grown firms to take on large audits and deliver quality and add value. As managing partner I am proud of my team as the market recognises our local professionals as capable to audit an entity of such size and stature."
What will the collaboration with EY look like?
"The audit will be a joint audit with both signatories appearing on the opinion. The collaboration will one of a seamless nature; Telkom will not feel that it has two sets of auditors. Risks and methodology will be covered upfront to ensure that Telkom gets the best possible approach out there with respect to providing assurance on its annual financial statements."
What does the appointment mean for the profession?
"This is a big step for the profession as it shows the market confidence that large market cap companies can rely on the quality and capability of local black firms. It allows firms such as Nkonki to further invest and develop its staff through intellectual property and thought leadership it gains as result of clients such Telkom. It creates better opportunities for our staffing complement, either through retention or opportunities to be placed in significant positions in the market place."