Auditors condemn Bosso books

Sikhumbuzo Moyo Senior Sports Reporter
FOR the second year running, Highlanders Football Club’s financial statements have been described as qualified by the auditors who have gone on to refuse to append their signature to the report.According to an auditing and finance expert, qualified financial statements mean a serious material misstatement such that it will be suicidal for auditors to be associated with such statements, hence their refusal to append their signatures.

Presenting their audit report to members during Highlanders’ annual general meeting at the club house on Sunday, Grant Thornton audit firm, through Phillip Ndlovu, said Highlanders’ accounts did not reflect the amounts they received from their principal sponsors BancABC for the period ending December 31, 2013.

Highlanders treasurer Jerry Sibanda presented the club’s financial position.
“The basis for qualified opinion is that the total amount sponsored by BancABC as at December 31, 2013 could not be ascertained as the detailed information could not be obtained to ascertain the completeness of total amounts sponsored. The entity does not have an effective accrual system to ensure completeness of creditors,” said the auditors in their report.

An accounting expert, who asked not to be named for professional reasons, said branding of an organisation’s accounts as qualified should be disturbing to any finance person.

“No finance person or auditor would like to have qualified statements, in layman’s terms it means  the statements would have been disqualified, not worthy.

“Failure to account for revenue has mainly been the major cause for accounts to be qualified, but various audit firms have their threshold of qualifying statements but the basis is that it’s usually huge sums of income,” said the expert.

In their preamble the auditors said it was the Highlanders executive committee’s responsibility to prepare for a fair presentation of financial statements in accordance with the Generally Recognised Accounting Practices (GRAP).

“This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies and making accounting estimates that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances,” said the auditors.

The auditors said their responsibility was to express an opinion on the financial statements based on their audit. They said they conducted the audit in accordance with the International Standards on Auditing, which require that they comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatements.

“We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion,” said the auditors.
A Highlanders member, Donald Ndebele raised the concern soon after the report and said as members they were getting concerned about the external auditors’ opinion.

“This is the second year in a row that we have had qualified opinion on our financial statements and it’s worrying us as members,” said Ndebele.

The auditors also informed members that the financial statements presented fairly, in all material respects the financial position of Highlanders as at December 31, 2013 and its financial performance and its cash flows from the year then ended in accordance with International Reporting Standards and in the manner required by the Premier Soccer League Constitution.

“Without further qualifying our opinion, we draw your attention to the fact that Highlanders Football Club incurred a net loss of $113,276 resulting in a cumulative loss of $586,244.

“This cumulative loss, along with the other matters, indicate the existence of a material uncertainty that may cast significant doubt about the club’s ability to continue as a going concern. However, the club has secured a $700,000 sponsorship from BancABC for the 2014 year and this is likely to alleviate the impact of the going concern issues,” concluded the auditors in their unsigned report.