Friday, February 25, 2011

ZICA to summon Mopani accountants

COMMENT - The Zambia Institute for Chartered Accountants is getting involved - this is an excellent development.

ZICA to summon Mopani accountants
By Mutale Kapekele
Fri 25 Feb. 2011, 04:01 CAT

Accountants and auditors at Mopani Copper Mines will be summoned to appear before the ZICA disciplinary committee for allegedly failing to report irregularities that were revealed in the company’s independent audit report which was conducted by Grant Thornton on government insistence.

The audit report revealed irregularities and inconsistency in production and revenue figures that Mopani submits to the Zambia Revenue Authority (ZRA). Mopani is owned by Glencore AG of Switzerland, a company that is headed by Marc Rich, who has been convicted of tax evasion before.

In an interview on Wednesday, Zambia Institute of Chartered Accountants (ZICA) president Chintu Mulendema said accountants and auditors at Mopani will soon appear before the institute’s disciplinary committee for alleged breach of the accountants Act of 2008.

Mulendema said ZICA practice review committee was compiling a report on the Mopani audit and should a prima facie case be established against accountants and auditors at Mopani, they would all be put on their defence and risk losing their practicing licences or suffer other punishments should they be proven guilty.

Mulendema urged all accountants to carry out their work diligently as professional misconduct raised suspicion and was not acceptable by ZICA standards.

He said accountants and auditors at Mopani were supposed to report any wrongdoing on the part of that company to ZICA and ZRA.

“Our duty to the profession and to the public is to do our work properly,” Mulendema said.

Basically, it's fraud to submit wrong information to ZRA and we expect our members to report to us for protection because at the end of the day it is our reputation that is at stake.”

Mulendema also said mines should be paying more tax compared to what they were currently contributing, considering that they had the best investment incentives from the government.

“The tax that is coming from the mines is dismal when they have the best incentives, their contribution is not adding value to the country’s revenue,” he said.

“They (mines) should not evade tax. That is not acceptable! They should comply with the laws and regulations of the country.”

According to ZICA submission to parliament’s estimates committee a few weeks ago, despite been the biggest economic sector (with gross copper export earnings of US$7.2 billion in 2010), the mines only contributed a pitiful 4.4 per cent to the country’s Gross Domestic Product.

ZICA reported that agriculture contributed the largest number to the country’s GDP at 19.8 per cent, while the struggling manufacturing sector contributed 9.8 per cent.

“How can the mining sector contribute less than the agricultural sector to GDP?” Mulendema wondered.

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