The Role of the Auditor in the Corporate Governance of Zambian Premier Companies
Banking, Finance, Lafarge, Taj Pamodzi Hotels Plc

This year’s Zambia Institute of Chartered Accountants (ZICA) elections were the most exciting albeit much anticipated in the financial sector. The elections ushered in a seasoned bean counter in Jason Kazilimani as its new president, and we believe that he and his KPMG team will be an exemplar in the game “auditing and compliance” in Zambia. The role of this ZICA organization is vital in the execution of corporate governance of premier companies in Zambia. According to its website, the Institute registers all practicing accountants in Zambia as required by the Accountants Act of 2008. According to the act, an accountant means a person qualified in the theory and practice of accountancy, auditor, tax consultant and tax advisor and registered under this Act. It further states that, a person may however have read the theory and practice of accountancy but if such a person is not registered as provided for in the Accountants Act of 2008, such a person is not an accountant in the eyes of the law. The law is very clear on their role hence why premier companies that are going concerns continue to use their services.

Paying attention to the announcements out of LuSE, Lafarge in their SENS ANNOUNCEMENT on the LuSE website of 21 April 2017, announced the discontinuation of their partnership with Auditors Ernst & Young Chartered Accountants. Effective 2017, at the Annual General Meeting held on 5th April 2017 at the Taj Pamodzi Hotel, Lusaka, Shareholders of the Company approved the appointment of Messers Deloitte and Touche as the Company’s new auditors with effect from 5th April 2017. Interesting development non the less.

For the astute stakeholder, it is important that the role of the audit process is well understood in order for one to ascertain the performance of a company’s corporate governance structures. Chartered Accountant Sanjay Ruia in his linkedIn article on corporate governance: the role of the auditor and the auditing committee states that the audit committee’s composition should be independent, minimum in size and all members should be financial experts. Their responsibilities are classified into four categories that include fiduciary duties (these are issues involving trust, especially with regard to the relationship between a trustee and a beneficiary), duties of care, statutory and other duties (as governed by company law). The committee itself is responsible for oversight of the company’s financial reporting process as well as being responsible for recommending a statutory auditor to the Board. This is the process that preceded the change in auditors at Lafarge.

Sanjay further demystifies the specific statutory responsibilities of the auditor in duty to make certain inquiries, duty to make a report to the company on the accounts examined, duty to make a proclamation in terms of the provisions set, detection and Prevention of Fraud, duty to report fraud and duty as to substantial precision.

With the aforementioned in mind, when you hold the annual report, you must feel proud of the company’s decision to take the bold step of putting corporate governance at the helm of their leadership style. At the moment, Zambia is endowed with many players in this space with extant players such as Deloitte and KPMG with new entrants who are quickly making their mark in HLB led by the vibrant Shuko Ndhlovu. We look forward to seeing the latter in premier annual reports.

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