PAAB investigates PwC

Andrew Kathindi

The Public Accounts and Auditor’s Board (PAAB) has confirmed that it has instituted an investigation into allegations raised against auditing firm PwC by Affirmative Repositioning (AR) leader and Windhoek mayor, Job Amupanda.

Amupanda accused August 26, a holding company owned by the Ministry of Defense, of transferring N$200 million from the Defence Ministry account, an action which he alleges to be unlawful but was not flagged by PwC which conducted its audit.

“Where such an investigation is complete and finds the registered auditor guilty, the PAAB may take disciplinary action against the guilty auditor. The disciplinary actions range from a warning, suspension from practicing, a fine, and even de-registration from practicing as a registered auditor. Of note is that the disciplinary actions vary depending on the severity of the offence,” PAAB Head of Secretariat, Zaa Nashindia, told Windhoek Observer.

Nashandi said that investigations, which have commenced, will include a request of the financial report by the professional services firm into PwC.

“Our investigations by nature do take time as we have to follow due process to ensure we arrive at the correct conclusion of any case. Without going into the nitty-gritties of our internal investigations processes we can only say the investigations are in progress.”

PwC’s audit report comes into light after Stier Vente Associates, an external audit firm for state-owned Fishcor, through which billions are believed to have been illegally laundered, is reported to have only reported suspicious transactions to the PAAB months after the Fishrot scandal became public knowledge.

Nashandi, however, argued that there is an expectation gap between what the public perceives as the role of the auditor when it comes to issues like fraud and non-compliance with regulations versus what the role of the auditor is as per the International Standards on Auditing (ISA’s).

“The primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management,” Nashandi said.

“It is important that management, with the oversight of those charged with governance, place a strong emphasis on fraud prevention, which may reduce opportunities for fraud to take place, and fraud deterrence, which could persuade individuals not to commit fraud because of the likelihood of detection and punishment.”

In an email exchange with Amupanda, PwC’s Audit Partner, Samuel Ndahangwapo, said that the company would await PAAB’s investigation, however adding that a statement by the Defense ministry, denying the N$200 million claim was made without their consultation.

“You have referred our audit of August 26 to the Public Accountants and Auditors’ Board (“the PAAB”) for investigation in respect of this question and hence we respectfully request that you respect the PAAB’s process and allow due process to take its course.”

“Given that the matter is before the PAAB and due to client’s confidentiality, we are not in position to make any statement in the matter.”

Related Posts