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ICPAK members were on duty when banks collapsed and must justify Kenyans

By Joe Musyoki | April 16th 2016

Listening to Institute of Certified Public Accountants of Kenya (ICPAK) defend auditors over the banking crisis made me question whether their services are required at all.

ICPAK said: “External auditors are just that - external, we don‘t prepare accounts, we are not forensic auditors. It is the board to blame internal auditors.“ They went ahead to quote their international auditing standards and disclaimer.

The problem Kenyans have with ICPAK is the timing and insensitivity of the those denials coming at a time billions of shillings of customer deposits are locked in banks placed in receivership and thousands rendered jobless. Kenyans expect answers from ICPAK and not a string of excuses and scapegoats.

To tell Kenyans “It wasn‘t me” is being callous to say the least. The big question is - did external audit firms carry out their work diligently in the failed banks?

External auditors have a moral responsibility to employ watertight audit methodology, apply technology to generate trend analysis and exceptions, query variances and obtain credible management responses. Where in doubt external auditors can conduct secondary checks, call in banking industry experts, increase audit sample and extend stay at their cost.

Contrary to what ICPAK would have us believe, in my view, when faced with the slightest clue of a potential disastrous or infinite risk (that can lead to a bank collapse), the audit approaches and options external audit firms can employ, to mitigate such a risk, are unlimited!

It is also reckless for external audit firms to hurriedly vacate bank audit sites before infinite risks have been fully mitigated by management. Nothing should stop them from making confidential reports to regulators and relevant authorities if that‘s what it takes to protect public property and trust.

The fact remains that ICPAK members were on duty when the three banks collapsed and must justify the hefty fees Kenyans pay for their services. Kenyans want assurance that their hard earned money in banks is safe.

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