HomeBusiness DigestListed firms fail to submit audited financial accounts

Listed firms fail to submit audited financial accounts

TAURAI MANGUDHLA

CAPITAL markets regulator, the Securities and Exchange Commission of Zimbabwe (Secz), has given stockbroking firms and other companies making up the capital markets community until June 30 to submit audited financial statements after failing to beat a March 31, 2021 deadline, citing Covid-19 restrictions, businessdigest can report.

The firms operate under tight frameworks that compel them to account for the public funds they handle.

But last year’s outbreak of Covid-19 affected auditing processes, as auditors were restricted to their homes by World Health Organisation protocols imposed to prevent contagion as the pandemic spread.

Firms whose financial year ended on December 31, 2020 were expected to publish financial statements at the end of last month, but they have approached the regulator requesting more time.

Secz said there would be no further extension after June 30 and appropriate fines would be imposed on those that fail to comply.

“The Securities and Exchange Commission of Zimbabwe hereby extends the deadline for submission of 2020 audited financial statements from 31 March to 30 June 2021, following the announcement of stricter lockdown measures effective 5 January 2021, which disrupted the audits of securities market intermediaries’ financial statements,” the Secz said.

“Please note that no further extension shall be provided and as such penalties shall apply for financial statements submitted after 30 June 2021 as per directive 01/2019,” the Secz added in a letter that was sent to stock brokers, asset managers, stock exchanges and the Central Securities Depository.

Secz head of licensing, supervision and surveillance Norman Maferefa told businessdigest this week that the extension was made prior to the deadline out of prudence.

He said corporates and market players need audited financials as part of compliance and accountability.

“The challenge is that when you take public funds or raise funds from the public, there is a need for a lot of accountability and that’s where auditors come in. It’s a governance issue and its global practice,” Maferefa said.

“Even when you are not listed, you are required by banks to submit audited accounts when you apply for a loan. They want to know how you have been doing and how money has been used.”

The second wave of the Covid-19 pandemic that snuck up on the country late December 2020 and forced tight restrictions on movement and business operations until the beginning of March has affected Zimbabwean corporates’ operations including audits.

This comes as listed companies on the Zimbabwe Stock Exchange (ZSE) also struggled to meet reporting deadlines due to the Covid-19 pandemic lockdowns that restricted movement and made it difficult to conduct audits timeously.

Industry operations were disrupted by the Covid-19 lockdowns, with land borders closed, making importation of raw materials difficult.

Over half of ZSE listed firms also failed to meet the March 31 deadline.

Some listed companies also bemoaned the high audit fees, which are pegged in US dollars as the local currency continues on a slippery slope, saying they have become untenable.

Recent Posts

Stories you will enjoy

Recommended reading