THE Public Accountants and Auditors Board (PAAB) has pledged to work with the Securities Commission of Zimbabwe (SECZ) to enforce full compliance with international standards in financial reporting, a move aimed at restoring sanity in the audit accounting profession and in the process protecting investors.
Report by Staff Writer
At the Association of Chartered Certified Accountants (ACCA) conference held in Victoria Falls recently, PAAB chairman Wesley Sibanda said as of January this year, his organisation had resolved to suspend practising certificates for members who breached international standards of financial reporting, especially on non-disclosure of share price-sensitive information, to manipulate the market.
Sibanda blamed non-disclosure of critical information on financial results of listed companies on accountants and auditors who are reluctant to comply with standard practice.
“Some of the auditors and accountants are not thorough with their work and that is why there is this non-disclosure of critical information in financial statements,” said Sibanda.
“As the regulating board, we resolved this year to suspend practice licences for members breaching standard practice and this is being done to restore sanity in the profession.”
SECZ CEO Tafadzwa Chinamo said his organisation would work with PAAB and the Zimbabwe Stock Exchange in reviewing all financial statements of listed companies for completeness and also enforce set standards for practising auditors and accountants.
Listed companies continue to breach standard practice in reporting financial results as critical information sensitive to share price is undisclosed, which Chinamo said compromises the share price discovery mechanism.
Chinamo said most listed companies were now owner-managed and this reduced board effectiveness as iinformation could be ‘managed’ to retain control while the interests of minority shareholders were overlooked, exposing the company to a greater risk of collapse.
“Companies just do not collapse. It takes a series of events which if properly disclosed, can enable investors intervene to save the company,” said Chinamo.
He said listed companies were neglected to include an auditor’s opinion in their financial results and this raised more doubts on the authenticity of the information.
The Securities Act, ZSE listing rules and the Companies Act have been blamed for having too many loopholes and being outdated.
Chinamo, however, said amendments to the Securities Act would address these problems.
He added the new law would not limit SEC only to licences but would also set national standards on corporate governance for listed companies.
This, he said, would go a long way towards protecting investors, promoting market integrity and preventing market manipulation.