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06.09.2019 Business & Finance

PwC Backs Sanction Against Audit Firms Will Improve Quality

PwC Backs Sanction Against Audit Firms Will Improve Quality
LISTEN SEP 6, 2019

The accounting and auditing firm, PwC, says it supports the sanctions that the Institute of Chartered Accountants, Ghana (ICAG) imposed on four auditing firms for various breaches of auditing principles.

While describing the GH¢2.2 million fine that the ICAG imposed on the four auditing firms as a step in the right direction, the Country Manager of PwC, Mr Vish Ashiagbor, told the Daily Graphic in Accra yesterday that he was convinced that the fine would put the affected auditors and other firms in the country on their toes to properly execute their duties, going forward.

He added that that should lead to a marked improvement in the quality of auditing and accounting in the country.

Mr Ashiagbor was speaking in an interview on the recent imposition of fines on Pannell Kerr Forster (PKF) Chartered Accountants, J. Mills Lamptey & Co., Morrison & Associates and Deloitte & Touche by the ICAG, which regulates the accounting and auditing profession in the country.

He spoke after the PwC had launched its 2018 Banking Survey Report in Accra.

Proactive measures

The ICAG announced the sanctions in a press release last Monday, after a fact-finding committee had found the work of the affected auditing firms on six collapsed banks short of the ethics and the requirements of the International Standards on Auditing (ISA).

The four firms audited the accounts of The Royal Bank, uniBank, BEIGE Bank, Capital Bank, UT Bank and the Construction Bank at various times prior to their collapse in 2017 and 2018.

The fines were the first of their kind by the accounting and auditing watchdog since its establishment 56 years ago.

Good job done

Mr Ashiagbor said the action by the ICAG was appropriate and in line with the institute’s procedures.

“I think the ICAG has done a good job; it has taken proactive measures to understand where one or two auditors fell a bit short and taken the steps in line with our institute’s procedures. So I am quite satisfied that the process is working,” he said.

When asked how the sanctions would impact delivery in the audit industry, going forward, the PwC Country Manager said it would raise the quality of output of auditors.

“Obviously, when your regulator has found you wanting in one or two ways, you will actually respond to it. The fact that you have been fined is an additional punitive measure, but, ordinarily, every professional would want to raise the standards higher.

“So if your regulator comes to you and says: ‘I have looked at your work and you seem to have fallen short in these areas, naturally, there will be an effort to close those gaps, and that is my expectation,” Mr Ashiagbor said.

He added that in terms of impact on the firms and the profession as a whole, it could only lead to the raising of the quality, which was actually the intent of the whole thing.

Quality assurance programme

After the conclusion of the fact-finding initiative and the imposition of the fines, he said, he expected practitioners in the industry and other stakeholders to take the findings in good faith and be guided by them.

He, however, disagreed with assertions that the implication of the four auditing firms meant that the ICAG’s quality control programme was not delivering optimal results.

“When you talk about compliance, quality control and supervision, they can never be 100 per cent,” he said.

Mr Ashiagbor explained that those quality control measures were ongoing processes that would help improve delivery.

Banking survey results

Meanwhile, the PwC’s 2018 Banking Survey has found that top bank executives endorsed the Bank of Ghana’s (BoG’s) reform exercise which ended in August this year and resulted in nine banks being closed down.

The report, which was presented to the media by a Senior Manager at the firm, Mr Destiny Attatsitsey, found that 83 per cent of bank executives indicated that they would deploy the new minimum capital, resulting from the reforms, to new income -generating activities, particularly loans.

It said the executives were of the view that the additional capital, coupled with an increase in the single obligor limit, put banks on a good trajectory to explore lending opportunities.

Mr Attatsitsey said the survey covered 19 out of the 23 banks currently in operation.

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