23 Feb 2014

Internal Auditors should be pro-active in organizations where they are professionally based, to ensure development of fraud response plans and the establishment of whistle blowing structures, The Vice President, Dr Ponatshego Kedikilwe.

Speaking during internal audit symposium in Gaborone on Friday, February 21, Dr Kedikilwe implored the Institute of Internal Auditors to rekindle the spirit of peer review to uphold the code of conduct and ethical standards as well as to instill pride in workmanship and quality production through a mechanism of self-regulation. He said such behavior and attributes gave noble professions the dignity and pride of place.

The symposium’s theme was: “Breaking barriers, building bridges.” He said the theme was fitting because it could mean building bridges between the profession and the community. “What is noble and admirable about the theme is the notion that the institute, or indeed the audit profession, cannot be isolationist, let alone elitist, because it does not exist in a vacuum,” he said.

Dr Kedikilwe said it was critical that the role of auditors should be well articulated, construed and given the space and recognition it deserves to promote, nurture and sustain the ideals of corporate governance. He said there was no doubt that auditors had a critical role to play in Botswana’s market economy, which sought to attract domestic and foreign investment.

He stated that in the annual “doing business report 2013” co-authored by the World Bank and the International Finance Corporation, one of the criteria, protecting investors, relates to among other things, “ strength of minority shareholder protections against directors’ misuse of corporate assets for personal gain.”

He highlighted that the task of monitoring the possible misuse or abuse of assets would be almost impossible to accomplish without internal auditors. The same report states that, “in economies with stronger investor protections, investment in firms is less sensitive to financial constraints and leads to greater growth in revenue and profitability”.

Dr Kedikilwe said it was gratifying to note that in the category of protecting investors, Botswana was ranked 49 out of 185 countries. This remarkable feat, he said, could be attributed to the critical role played by auditors.

He added that government was indebted to the role played by auditors as had been affirmed by President Lt Gen. Seretse Khama Ian Khama in the state-of-the-nation address that he delivered in November last year, quoting that, “the quality audit teams we have put in place to scrutinize claims have had substantial positive effect, audits carried out in from December 2010 to March 2013 uncovered 62 717 minor and major defects. It estimated that the first year of inspections saved government well over P100 million”.

Without auditing, Dr Kedikilwe said, it would have been resources gone down the drain. Therefore, he added, the government was committed to monitoring and improving compliance to auditing standards.

He emphasized that all parastatal organisations have critical role to play in the economic development of Botswana, and it was for this reason that parastatals were conscious of expectations as to what they ought to deliver in terms of revenue. Sometime the pressure to meet a certain level of revenue could be too much to bear for management in such state corporations as in some instances the job security might depend on the achievement of the targets.

Dr Kedikilwe said the pressure could be so exacting as to lead to the temptation by management, to doctor financial reporting to present the appearance of meeting such targets and goals. The need for accuracy, he said, was even more imperative in this instance because public institutions were owned by the nation at large and the nation had the right to truthful information.

The symposium seeks to equip participants with new trends of carrying out internal audits and create a platform for debate on the current best practices across the globe. ENDS