The initial inquiry on state capture in South Africa claimed the scalp of an unlikely suspect-KPMG! So as the nation reviews the damning audit reports by the Auditor General, one of the questions we should be asking is ‘Who audited NSSA? What role did they play in the plunder of public resources? We fully appreciate the critical role of auditors and the limitations on fraud detection and reporting. But how far are they liable in cases where rampant corruption would have been unearthed and yet their opinions could be at variance with what would be on the ground?
Looking at NSSA, the public may be interested in knowing the composition of the audit committees at the institution. What was their role? Who were the internal audit members? Were they getting salaries? How was the corporate governance culture at the institution?
Zeroing in on the finance department-who are or were the finance directors? What are their qualifications and experience? Which accounting and auditing bodies do they belong to? Did they follow their professional ethical standards? Are professional accounting and auditing bodies going to sanction their members implicated in various fraud cases perpetrated at various entities across the country?
Around this time last year, 3 local NGOs had their funding cut by a leading humanitarian organisation. One of the directors of the organisation publicly defended her organisation saying they had recently conducted an external audit where their books were determined to be clean or unqualified. Who were the auditors of these organisations? Critically, who were managing the finances?
Are audit clerks remunerated enough? How are auditing firms handling the undue pressure on their staff to be corrupt? Do they have reporting mechanisms for stakeholders to report and bring evidence of corruption?
The Institute of Chartered Accountants in Zimbabwe is responsible for the training of local auditors, they also register auditing firms. How far is the institute going in terms of professional development and protecting the integrity of the profession?
Are they aware of the challenges and limitations in the profession? How are they responding to some of their members implicated in corruption? Do they ever solicit for input from members of the public?
The same applies to all finance professional bodies such as the Institute of Internal Auditors, ACCA, CIMA and CIS. Are they following developments in the country? Are they aware that some of their members could be facilitating fraud? Are they taking disciplinary action?
The accounting profession is well known for integrity..it is responsible for the stewardship of resources for shareholders, the government and tax payers. To what extend should the public rely on their work? How genuine are audit reports from Zimbabwe?
We expect all finance professionals to self introspect and review ethical guidelines. We hope to see action from all auditing firms reviewing how they conduct business and protecting the image of the profession.
We look forward to seeing ICAZ being hauled before the parliamentary committee and answering various questions pertaining to their members and audit firms. If the auditors of NSSA issued clean audits despite the rot at the organisation, then they too are liable. They should be penalised and forced to return back all audit fees plus a hefty fine. Some may need to be deregistered in order to send a clear warning!
A discussion within our forum on the issue showed that the rot in the auditing profession has reached alarming levels. Auditors in the country are easy to bribe with some offered free air tickets or jobs for sweeping corruption under the carpet and issuing clean audit reports. One wonders what would have happened had the Auditor General Office not carried out second audits?
How many have mechanisms to review -audits? Just how reliable are audited statements from Zimbabwe? As the country fights corruption, we need all those found guilty caged plus restoration of integrity of the accounting and auditing profession.
This is a sensitive area but South Africa did it and all audit firms are now wary of the risks associated with unprofessional behaviour. We need to start talking loudly about the rot in the sector in order to restore confidence.
We go back to our initial question-who signed off the financial statements at NSSA? Which accounting or auditing professional bodies do they belong to? Who audited them? Is the audit firm fit to remain operational? What steps is ICAZ going to take?
Food for thought.
