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Zim’s accounting systems of ‘high integrity’

MURRAY & Roberts Zimbabwe CEO Canada Malunga (CM) was elected the new Institute of Chartered Accountants of Zimbabwe (Icaz) president at the institute’s Annual General Meeting (AGM) held in Victoria Falls three weeks ago.

The Zimbabwe Independent chief business reporter Paul Nyakazeya (PN) this week caught up with Malunga on his vision for the country’s largest accounting institute, the construction industry in Zimbabwe and his recent election.

PN: What are your short term objectives as far as enhancing the stature of chartered accountants in Zimbabwe?
CM: The Institute of Chartered Accountants of Zimbabwe is the premier accounting body in the country and our intention is to ensure that our members continue to provide quality services as enshrined in our charter and unique training methodology.
I will be emphasising during my tenure on continuous professional development (CPD), return to full International Financial Reporting Standards (IFRS) and aggressively pushing for regional integration of professional bodies. 
The chartered accountant profession is held in very high esteem by members of the public and we will ensure that the trust of leadership, honesty, integrity and discipline is enforced.
PN: How active is Icaz in developing guidance for preparers of financial statements and do you think they are being effectively followed?
CM: Icaz, through the Accounting Procedures Committee (APC) and the Auditing & Professional Standards (APSC) subcommittees, is mandated with developing guidance for auditors and preparers of financial statements. 
This is done in so many ways including, but not limited to, CPD seminars and issuance of relevant guidelines. These subcommittees are composed of members in public practice and preparers of financial statements. The guidance so provided has been very useful in the past and I have no doubt that it shall continue to be such.
PN: In this regard, as Icaz do you or have you seen loop-holes in listed companies’ financial results? What steps have you taken or are supposed to take if you detect any?
CM: Our APC subcommittee reviews listed companies’ financial statements on an annual basis as part of our commitment to provide quality service to the public.  Any areas requiring improvement are directed towards both the statutory auditors and the preparers of such financial statements for remedial action. We also liaise closely with the ZSE through the ZSE Monitoring Panel where financial statements of listed companies are concerned.
PN: What do you think has been the major short comings in the country’s accounting system and how do you intend to address such issues?
CM: Our accounting systems are of high integrity, but have in the past been tainted by the unique hyperinflationary conditions and consequences thereof that prevailed in the country up until January 2009. 
This unique hyperinflationary condition not only made interpretation of financial statements difficult, but the various modes of settlements with no agreeable and verifiable values made it extremely difficult to implement any accounting system. 
Our APC and APSC, however, worked on these issues and contributed towards the restoration of accounting sanity.
As Zimbabwe works towards joining the global community of nations, Icaz will be leading and profession of first choice in ensuring that the country returns to full IFRS and continued International Federation of Automatic Control (IFAC) compliance. 
Icaz, in partnership with various global players, has been and will continue to work on the design and implementation of sound public sector financial accounting and reporting standards.
PN: On a different note, how is Murray  & Roberts’s Zimbabwe’s contribution to the parent group?
CM: Murray & Roberts (Zimbabwe) Ltd is listed on the Zimbabwe Stock Exchange and the single biggest shareholder is Murray & Roberts Ltd of South Africa with 47% equity interest. 
Murray & Roberts Ltd is a global business with an annual turnover in excess of 4 billion Rand.
While Murray & Roberts Zimbabwe represents a tiny portion of Murray & Roberts Ltd, it is perhaps seated on some of the greatest and exciting infrastructure related opportunities going into the future and is key to the global Murray & Roberts Ltd’s strategy into Africa north of the Limpopo.
PN: Is it expensive to build a house in the low, medium and high density or to buy a similar property that is complete?
CM: The debate on building costs versus open market realisable values is distorted by the lack of long term finance facilities in the country. 
Whilst it may be true that at the moment it may be cheaper to buy than build, this should reverse in the medium to long term as finance facilities become much more competitive. The demand supply curve is distorted by lack of depressed aggregate demand and general lack of finance.
PN: Compared to the region, are building materials and rentals more expensive in Zimbabwe?
CM: Building materials are fairly competitive although certain specialised works may still be out of line. These are expected to become more competitive as the market continues to open up.
The rental yields in Zimbabwe are distorted with various factors and it may be dangerous to come up with generalised conclusions.
PN: How would you describe the construction industry in Zimbabwe? What has been the major stumbling factor(s)?
CM: The industry is generally robust, but has been let down by the poor economic climate and inconsistent government policies on investments. When you consider the state of our infrastructure and that more than 18 months into the new government and economic regime little work has been started to rebuild our infrastructure, then clearly the industry will continue to be strained. The good news is that this could change very quickly!
While the industry may appear to be under-capitalised, this can be corrected as soon as the investment climate improves and projects of a long-term nature get implemented whereupon the necessary structures may be put in place.


Paul Nyakazeya

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