Zifa financials get adverse report from auditors

Sikhumbuzo Moyo, Senior Sports Reporter

Independent auditors have given an adverse opinion on the Zifa financial report after the association presented it at a rate of 1:1, which constitutes a departure from International Accounting Standards 21.

This means the financials do not conform to International Financial Reporting Standard.

The financials were prepared ahead of the annual general meeting now slated for December 31 after it was postponed from December 19.

The auditors, PNA Chartered Accountants, also blasted the association for presenting financials for Zifa ( Private) Limited, a company established to acquire by purchase, lease, exchange movable and immovable property, yet it failed to furnish auditors with the share certificates, share register book, minutes of the annual general meeting of the company and the company tax returns.

“Consequently, we could not satisfy ourselves concerning any changes in the ownership structure of Zifa (Private) Limited or any unrecorded liabilities of the company as at 31 December 2019″ wrote the auditors.

“Although the board members acknowledge that there was a functional currency change and that the rates of exchange rate between the USD and local currency was not 1:1, they have maintained their functional currency as ZWL and have presented the financial statements in ZWL using an exchange rate of 1:1.This constitutes a departure from the requirements of IAS 21, and therefore the financial statements have not been prepared in conformity with IFRS. Had the Association applied the requirements of IAS 21, many of the elements of the accompanying separate financial statements would have been materially impacted and therefore the departure from the requirements of IAS 21 is considered to be pervasive. The financial effects on the separate financial statements of this departure and need for adjustments under IAS 29 ‘Financial Reporting in Hyperinflationary Economies’ have not been determined,” said the auditors.

The executive committee member in charge of finance Philemon Machana will have to explain why the association failed to adhere to internationally acceptable accounting standards.

“By sticking to an exchange rate of 1:1 there is a high risk of securing USD say from Fifa, hold onto it and ofload what you only want for the purposes of payments at a rate higher than 1:1 in the process giving a distorted financial statement,” said a financial expert.