4 auditing firms who failed to do due diligence on collapsed banks sanctioned

4 auditing firms who failed to do due diligence on collapsed banks sanctioned

- The Institute of Chartered Accountants (ICAG) has sanctioned four auditing firms that audited the seven banks that collapsed in 2017 and 2018

- The four firms, according to the ICAG, have been sanctioned for non-compliance with auditing standards

- The BoG announced the formation of Consolidated Bank Ghana Limited (CBG) to take over the good assets and the operations of local banks that were placed under receivership

The Institute of Chartered Accountants, Ghana (ICAG) has sanctioned four auditors involved in the collapse of some local banks in the last two years.

The banking sector has been hit very hard in recent years, with so many financial institutions being affected.

The last two and half years have seen several banks, investment companies and microfinance companies closed down.

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First the UT and Capital Banks were consolidated after the Central Bank deemed both institutions insolvent.

Then five more banks – Beige Bank, Sovereign Bank, Royal Bank, Construction Bank and UniBank – were also dissolved to form the Consolidated Bank of Ghana.

During investigations, the Bank of Ghana discovered that three of the banks falsified their capital positions to obtain licences.

The Graphic Online reports that the ICAG began an enquiry into the role of the auditors in the collapse of the seven banks in 2017 and 2018.

The investigation by ICAG was handled by the Professional Standards and Ethics Committee of the Institute, which is a body of professional accountants and auditors in Ghana.

The auditors were found by the ICAG to have been non-compliant with auditing standards in the country.

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The Ghana Association of Bankers (GAB) has also previously been critical of the auditors and the roles they played in the collapse of the banks.

GAB said the auditors let everyone down by failing to detect the irregularities and flag same in the audited accounts.

Meanwhile, the ICAG Council has endorsed the recommendations of the Disciplinary Committee to sanction the affected Audit Firms.

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Source: YEN.com.gh

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