Accountants are up in arms over what they term as the unlawful profiling of audit firms in the country.
Through their regulator and professional lobby group, they said that some financial institutions were imposing discriminatory restrictions on accounting firms clients on the validity of their audited financial statements.
The institute termed this as further unlawful and an unacceptable attempt to usurp its mandate.
The Institute of Certified Public Accountants of Kenya (ICPAK) said various firms have complained that priority was given to statements audited by the ‘big four,’-PriceWaterhouseCoopers (PWC), Deloitte, KPMG and Ernst & Young as opposed to smaller audit firms.
“The institute has noted concerns from various stakeholders that some financial institutions only recognise financial statements that are audited by one of the ‘big four’ audit firms which, they deem, to be the only valid and acceptable audit reports,” the statement read in part.
ICPAK clarified that all auditors and accounting firms licensed by them have been thoroughly vetted.
Therefore, all licensed audit firms were fully suitable to offer the services under their respective license categories.
It said details of all licensed audit firms ware available on the Institute’s website and regularly published in national newspaper if further clarification is needed.
ICPAK said audit firms are categorised according to the number of partners.
This ranges from sole practitioners, two to five partner firms, six to ten partner firms and over ten partner firms to demonstrate their varying capacities.
“Any other profiling that attempts to designate some audit firms as ‘the big four’, or to determine that only financial statements audited by the said big four firms are valid or acceptable is discriminatory, biased, irregular and anti-competitive,” said ICPAK chairman Philip Kaikai.
ICPAK is the statutory body of accountants established under the Accountants Act 1978. It draws its mandate from the Accountants Act No.15 of 2008.
Audit firms and practitioners are licensed by the ICPAK, under four categories, Category C, A, M and T
Category ‘C’ (Composite License) are authorised to perform Audit and Assurance Services, Tax Services & Accounting, Controls and Consulting Services.
Additionally those licensed under Category ‘A’ License are authorised to perform only Audit and Assurance Services.
There are also category ‘M’ Licensees authorised to perform Accounting, Controls, and Consulting while Category ‘T’ Licensees are to be engaged in performing Tax practices.
