Auditor again disagrees with Bank of Mozambique financial statements

Login

Register

http://www.clubofmozambique.com/

Auditor again disagrees with Bank of Mozambique financial statements

3:03 CAT | 10 Aug 2020

FILE - Central Bank governor Rogério Zandamela. [File photo: O País]

“The Bank of Mozambique has not consolidated the financial statements of subsidiary ‘Kuhanha Pension Fund Management Company’ as mandated by international standards,” says auditing firm PwC.

The independent auditor of Mozambique’s central bank disagrees with the 2018 financial statements published on the Internet on Friday, but the bank considers them correct.

“The Bank of Mozambique has not consolidated the financial statements of subsidiary Kuhanha – Pension Fund Management Company,” as mandated by international standards, the auditing firm says.

“The individual and consolidated financial statements do not adequately present the financial position of the bank and its subsidiaries,” the independent audit reports.

“The consolidation of Kuhanha would have material impacts on many elements of these financial statements,” it points out, adding that “the effects of this non-consolidation have not been determined”.

But central bank management considers “there is no relevant economic sense that justifies the consolidation” of Kuhanha.

“Only the subsidiary Sociedade Interbancária de Moçambique (Simo) was considered in the consolidation, since its sphere of activity [the country’s ATM network] is part of the central bank’s functions,” it says.

Kuhanha is classified as “a public interest entity … within a sector of activity regulated by the Institute of Insurance Supervision of Mozambique and, as such, subject to regular independent audits,” it adds.

This is the second consecutive time that the financial system regulator has received an adverse opinion from KPMG, who took the same position in relation to the 2017 accounts, when Kuhanha acquired a majority position in Moza Banco, one of the main commercial banks in Mozambique, in which the Bank of Mozambique had previously intervened.

“The accounting standards that we applied in 2017 were the same as in 2016 and 2015, and we are doing the same thing for 2018, because that is what our organic law requires,” central bank governor Rogério Zandamela said in October 2018 after the release of the KPMG report.

In its financial statements, the central bank emphasises that the position of its pension fund in Moza (59.4%) does not reach the two-thirds necessary to “make structural decisions”, so “the assumptions for not consolidating the accounts of its subsidiary [Kuhanha] prevail”.

According to the financial statements now published, the central bank posted a positive result of around 1.4 billion meticais (€18 million) in 2018, against about 5.6 billion meticais (€67 million) in 2017.

Source: Lusa