The Institute of Chartered Accountants in Malawi (ICAM) has fined BDO Chartered Accountants (Malawi) for misconduct and negligence during the 2019 elections.
The institute found the auditing firm guilty of four of five charges against it and fined the company K3.8 million.
In a letter dated 17th February, ICAM president Joel Mwenelupembe said a disciplinary hearing was held in September last year following a complaint from Malawi Congress Party and a concerned Malawian.
ICAM found that BDO failed to carry out a risk assessment of the assignment the firm was engaged to undertake despite being aware that the assignment was sensitive, of significant public interest and that the stakes were very high.
“Furthermore, the terms of reference had a serious and significant limitation on the scope of the work that threatened the independence of BDO: The firm was not allowed to stop the transmission and processing of the results if they noticed any irregularities,” ICAM said in its letter.
The institute then fined BDO K1 million saying the absence of the power to stop the transmission and processing of the results where any irregularities are noticed is a serious hinderance in the conduct and compromised the outcome of the exercise.
BDO was also fined K1 million for recruiting junior auditors without references and thereby reducing the quality of work.
BDO was further found in the wrong for allocating one engangement partner and 16 supervisors against 197 constituencies.
The institute said BDO should have employed sufficient numbers of staff commensurate with the workload and also bearing in mind the sensitivity of the exercise.
Forthe misconduct, BDO was fined MK800, 000.
On the fourth charge, BDO was fined K1 million for aiding a foreign firm, BDO Jordan, to carry out a professional assignment without a special clearance from the Malawi Accountants Board (MAB) and without paying prescribed fees to the Board.
Onaccusations that BDO failed to report the electoral irregularities to MAB, the company was not found guilty because the irregularities were reported to the Malawi Electoral Commission.
The company has been told to pay the fines by 31 March but can also appeal against the decision of the council within 30 days.
