BDO Chartered Accountants (Malawi) has appealed a verdict the Institute of Chartered Accountants in Malawi (Icam) imposed on it in relation to its handling of the May 21 2019 Tripartite Elections.
Last month, Icam fined BDO Chartered Accountants K4.8 million after finding the firm guilty on four charges relating to how they handled the elections.
The firm was hired by the embattled Malawi Electoral Commission (MEC) through the United Nations Development Programme (UNDP) to verify results to ascertain if they were mathematically a true reflection of the elections.
A notice the firm published on Tuesday indicated that the appeal has been made to the accountants’ body with respect to the Public Accountants and Auditors Act of 2019.
However, BDO Chartered Accountants’ notice on Tuesday did not clearly indicate whether the firm is disputing the whole verdict or if they are seeking a reduction in the fines that were imposed on them.
Reads the notice in part: “Further to two recent press articles in connection with procedures carried out during the May 2019 Tripartite Elections in Malawi, we confirm that we have appealed to the Malawi accountancy profession regulator as provided for under the Public Accountants and Auditors Act [No. 5 of 2013].”
But despite the perception created by the scenario and Icam’s action, the notice stated that the matter has never affected operations of the firm in providing services to clients.
When contacted, Icam chief executive officer Francis Chinjoka Gondwe said they were yet to be served with the appeal.
He said: “We have been informed that BDO [Chartered Accountants Malawi] have appealed against our determination, [but] we have not been served with the grounds of the appeal.”
In a letter dated February 17 2020 to BDO Chartered Accountants Malawi, Icam president Bwighane Mwenelupembe said Malawi Congress Party (MCP) and a concerned citizen reported the auditors to Icam on allegations of professional misconduct.
The complaint was in relation to the irregularities that marred the May 21 2019 Tripartite Elections.
Reads the letter in part: “Following the hearing and examination of evidence and facts in line with rules, regulations and standards applicable to the accounting and auditing profession, the body [Icam] came up with the determination that was applicable within 30 days.”
Therefore, Icam fined the firm after finding them guilty of failure to carry out a risk assessment of the assignment they were engaged to undertake despite being aware of the sensitivity with significant public interest.
BDO Chartered Accountants was also found guilty of lack of professional competence and due care contrary to Section 2.4 of Icam’s Disciplinary Guidelines as read with Section 113.1 A3 of the International Federation of Accountants Handbook of Code of Ethics 2018.
In the third charge, the auditors were found guilty of not having the capacity to carry out the assignment.
The firm was also charged with aiding a foreign firm, BDO Chartered Accountants Jordan, to carry out a professional assignment without a special clearance from the Malawi Accountants Board. n