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Sakala challenges ZICA to help address financial irregularities

Sakala challenges ZICA to help address financial irregularities
Written by Edwin Mbulo in Livingstone
Monday, April 20, 2009 4:45:45 AM

CHIEF Justice Ernest Sakala has challenged the Zambia Institute of Chartered Accountants (ZICA) to help address financial irregularities raised in the Auditor General's report. During the ZICA annual ball held last Saturday at the Zambezi Sun Hotel, Justice Sakala said the accountancy profession was key to the country's development.

"The annual Auditor General's report makes headlines each time it is published. The Auditor General's report highlights financial irregularities on how government and government-supported institutions are applying taxpayers' money. The reported irregularities generate a lot of concern among the citizenry and of course end up before the Public Accounts Committee of the National Assembly," he said.

Justice Sakala said accountants played a major role because they kept records but he wondered why there were reported cases of records missing.

"As an oversight body of accountants the issues raised by the Auditor General's report must be of concern to the integrity of your profession. I wish to challenge the Zambia Institute of Chartered Accountants to be part of the solution to addressing the financial irregularities raised by the Auditor General year in and year out," he said. "I strongly feel that as a country, this is a task which must be done, not at a cost, but at all costs. We may not manage to eliminate all the audit queries; but we must reduce them to tolerable levels."

Justice Sakala said all countries that had developed had managed to embrace transparency and accountability in their national development agenda.

He said the accountancy profession held various principals and concepts of prudence, consistency and conservatism among others and that these remained the cornerstone of the profession to date.

"When I look at these concepts I wonder how helpful they have continued to be in a world characterised by a global financial crisis and uncertainty. Yet, these are the very important concepts that have made an accountant respected to this modern time. One of the questions that beg an answer and that should exercise your minds is: 'Are these still relevant to this era of global economic melt down? I may not be qualified to answer this question; but you, the distinguished members of the accountancy profession, should reflect on it. Most recently fair value accounting has become the buzz word in the accountancy profession," he said.

Justice Sakala reminded accountants to be mindful of the presence of toxic assets, which could distort their financial statements.

He said Zambia was going through challenging times due to the global financial meltdown and that there was serious and unprecedented change caused by external forces.

However, Justice Sakala said the country needed to develop appropriate strategies to respond to the changing times.

"The major challenge many professionals face is the failure to avail themselves to government and offer advice on how various issues could be handled. When you criticise, though necessary, and offer no alternative view point, people in government are likely to develop defensive mechanisms and good advice is then ignored or gets clouded in confusion," Justice Sakala said.

And ZICA president Chintu Mulendema said high profile corporate failures had dented the image of the accountancy profession.

"As ZICA we are affected by these events since we are the regulator of the accountancy profession in the country," he said.

Mulendema, who went unopposed as ZICA president during the annual general meeting held in Livingstone on Friday, said ZICA had established a department to monitor the performance of all accountants in practice.

"As a starting point ZICA entered into a contract with the ACCA/ECSAFA to conduct the initial practice reviews while the practice review staff is undergoing intensive skill development. The vision and aspirations of ZICA are to enhance the development of the accountancy profession and to put in place a strong regulatory framework so that quality of the work by accountants meets the best practice and standards that are satisfactory to all stake holders," he said.

Mulendema said ZICA had experienced real growth with an institutional investment of K5 billion and a surplus of K1.5 billion as compared to K950 million last year.

Labels: ERNEST SAKALA, GOVERNANCE, ZICA

posted by MrK @ 3:44 AM