NATIONAL Board of Accountants and Auditors (NBAA) has deregistered two auditing companies from being practicing firms and suspended one, for breaching professional ethics, contrary to the requirements of the laws and International Federation of Accountants (IFAC) Code of Ethics for Professional Accountants.
NBAA's move follows concerns raised during a meeting on June 6 this year between President John Magufuli and representatives of the business community, that some of the auditing firms were preparing two different financial reports from the same company/client, hence, causing losses to the government in terms of revenue collection.
NBAA Chairman, Prof Isaya Jairo (pictured) stated after the meeting, that the Board in collaboration with Tanzania Revenue Authority (TRA) investigated the matter and found the three firms guilty.
The firms are TEG Consultancy, MATSAB & Co and Y.H. Malundo & Company whose clients were Mek One General traders Limited and Mek One Industries Limited.
Citing the frauds, he said that in 2013 , the Financial Statement of sales issued by Y.H. Malundo & Company from Mek One General Traders Limited was 3 1.46bn/- while that of TEG Consultancy showed 13.02bn/-.
In 2014 the financial statement of sales issued by MATSAB & CO from Mek One Industries Limited was 142.4bn/-, TEG Consultancy issued 8 0.7bn/-, 21.6bn/- and 18.1bn/- and 21.6bn/- by Y.H. Malundo & Company.
The punishment for TEG Consultancy was to be deleted from the register of practicing firms (de-registration) after being found guilty of gross professional misconduct -signing of three parallel sets of unaudited financial statements for different purposes.
"Managing Director of TEG Consultancy, Mr Mazengo Kasilati, has also transferred to a lower classification in a register (of Graduate Accountant) after being found guilty of gross professional misconduct- intentionally signing the unaudited financial statements and issuing opinion on the three parallel sets of financial statements for different purposes," the Chairman noted.
MATSAB & CO also faced the same judgment of being deleted from the register of practising firms after being found guilty of gross professional misconduct -signing the unaudited financial statements, according to Prof Jairo.
The Board also decided that the Managing Partner of the Firm (MATSAB & Co), Mathew Marapachi be deleted from the register of ACPA and himself be prosecuted subject to obtaining the consent of the Director of Public Prosecutions (DPP).
He was found guilty of gross professional misconduct - calling himself the "Managing Partner" knowing that he is not a Certified Public Accountant in Public Practice. Moreover, the Board decided an employee of MATSAB & Co.
Mathew Kumalija should be prosecuted after being found guilty of intentionally signing the unaudited financial statements and issuing opinion.