KPMG shuffles top management in broad reform effort

After seven of its accountants received penalties from financial regulators, KPMG Certified Public Accountants (安侯建業) vowed to reform the organization by strengthening its internal corporate-governance efforts and risk management.

On Tuesday, the accounting firm reshuffled its top management by forming a seven-member board, chaired by Chang Wu-yee (張五益). KPMG also plans to invite one or two outside directors from the academic sector to its board.

Chang, who took over the accounting firm's leadership from former head Albert Lou (羅子強), said that the company's new organizational structure aims to separate its policy-making system from its executive body.

As part of his reform plan, Chang stressed the importance of audit integration, saying that KPMG will now differentiate between its clients as financial service sector and non-financial sector, so as to help upgrade its accounting services.

Thus far, financial-service clients have accounted for up to 80 percent of KPMG's total revenues a year, according to Chang.

In the past few months, the nation's financial watchdog, the Financial Supervisory Commission, imposed penalties on accountants from KPMG and its counterparts for their negligence in certifying listed companies' financial reports, following the emergence of several corporate scandals since June last year.

In December, the commission imposed penalties on 12 certified public accountants for negligence in certifying financial documents of such companies as Procomp Informatics Co (博達科技), Summit Computer Technology Co (皇統科技), Infodisc Technology Co (訊碟科技) and High Tech Computer (HTC, 宏達電).

These actions appeared to suggest that the commission now holds accountants more responsible for the accuracy of listed companies' financial reports they have certified.

Facing such escalating levels of business risk and responsibility, Ulyos Maa (馬國柱), KPMG's newly-appointed chief executive officer, said that the company will put more focus on future risk management by thoroughly executing its in-house policies.

The firm will also form a special review team to identify risk when certifying listed companies' financial documents, while strengthening the training of its junior partners.