BLANTYRE-(MaraviPost)-The institute of chartered accountants Malawi has fined BDO ( Malawi) a sum of MK3,800,000 for various accounting misconducts in the way the firm handled the May 21, 2019 Elections as auditors.
Following the allegations of professional misconduct that the Institute received from Malawi Congress Party (MCP)and a concerned citizen, the firmed has found BDO ( Malawi) guilty on four charges out of the five presented charges against it.
Using the evidence/facts in light of the rules, regulations and standards applicable to the Accounting and Auditing profession, Council found BDO Chartered Accountants (Malawi) guilty on the charge of negligence and reprimanded the firm with a fine of MK1, 000,000.
The verdict has been reached following Section 2.4 of the ICAM
Disciplinary Guidelines together with Section 113.1 A3 of the IFAC Handbook of Code of Ethics which stipulates that;
“Without reasonable cause or excuse, and subject to the proviso to Section 20 (7) of the Public Accountants and Auditors Act, fails to perform any work or duties commonly performed by a registered accountant and auditor with such degree of care and skill as in the opinion of the disciplinary committee may reasonably be expected”.
The board has also found the firm guilty on the charge of lack of professional competence and due care following failure of the firm to obtain reference for the junior auditors recruited for the assignment during the 21 May Elections.
This has also attracted a penalty of severe reprimand and a fine of MK1, 000,000.
The ICAM Council also observed that the firm supplied insufficiency number of staff to carry out the given task which demanded more staff based on its nature.
This was contrary to Section 2.21 of ICAM’s Disciplinary Guidelines as read together with Section R113.3 of the IFAC Handbook of Code of Ethics 2018. Section 2.21 of the ICAM’s Disciplinary Guidelines in respect of a misconduct and has attracted severe reprimand with a fine of MK800, 000.
During the 21st May Elections, BDO Chartered Accountants aided a foreign firm, BDO Jordan to carry out a professional assignment without a special clearance from the Malawi Accountants Board (MAB) and without paying prescribed fees to the Board.
This was contrary to Section 2.29 of ICAM’s Disciplinary Guidelines as read with Section R115.1 of the IFAC Handbook of Code of Ethics 2018.
BDO has therefore been severe reprimanded and fined a sum of MK1, 000,000.
The Investigations Committee and Disciplinary Committee that organized a hearing at ICAM Office, Stansfield House, Haile Selassie Road in Blantyre, on 24 September 2019 has cleared BDO of the final charge of negligence following the complaint that the firm did not report on observed irregularities to the Malawi Accountants Board (MAB) during the exercise.
The council has discovered that the firm took the all the necessary steps to inform both Malawi Electoral Commission and United Nations Development Programme (UNDP) about the irregularities the firm had found.
In view of the verdicts delivered, BDO has been requested to pay the penalties to the Institute by 31 March 2020.
In case of dissatisfaction with the verdicts, the BDO firm has also been granted the opportunity to appeal against the decision of the Council to MAB within 30 days from the day of the delivery of the verdicts.
