The troubled Mumias Sugar Company will for the first time be audited by the first ever Nairobi-bourse listed client, RSM Eastern Africa which has been proposed to take over from Deloitte. This will however be effected only after Mumias Sugar Company shareholders approve the proposal. This will be known after the annual general meeting that has been planned to take place on December 11th 2015.
There are four major auditing firms that often dominate the Nairobi Securities Exchange listed firms. They include Deloitte, PricewaterhouseCoopers, Ernst & Young and KPMG among other smaller auditing firms like PKF, BDO East Africa, Grant Thornton and Crowe Horwath.
In the financial year that ended the month of June, the troubled Mumias Suger Company, the once sugar giant in the region, paid 6.7 billion shillings to Deloitte as auditing fees. This came even after Deloitte & Touche is being accused of professional misconduct in the manner in which it handles books of accounts for four companies in Kenya including Mumias Sugar Company itself, CMC Holdings, and Tuskys Supermarket.
PKF on the other hand is currently being investigated by the Institute of Certified Public Accounts of Kenya on how the firm handled the financial statements of Imperial Bank which was placed under receivership by the Central Bank of Kenya in October this year with a total of 58 billion deposits from the customers.
An auditing firm has a sole responsibility of expressing an opinion on the financial statements of a company that has contracted it. At the moment, the Kenyan unit is inclined towards the London-based RSM International. This firm is at the moment ranked the world’s seventh largest auditing firm.
If RSM Eastern Africa will be approved to take over Mumias Sugar Company, then it will work under the condition where many auditing firms are under close monitor by shareholders on how they handles accounts books for companies.