VituVingiSana wrote:@accelriskconsult - The Botswana subsidiary is also listed so audited locally. I doubt the Kenyan auditors go to Botswana if there is a local firm that audits the subsidiary. I think the same DCDM does the Botswana audits.
I have no issues with the auditor. In a past AGM, the auditor (to the discomfort of B.U.R.E.K.A.B.I.S.A) read a speech that criticized the Corporate Governance of Olympia! You should have seen the faces of the Directors. I thought they were going to fire DCDM on the spot!
VVV-veni vidi vici - thanks for the comment on the performance of DCDM.
The auditors of OCL Botswana are BDO Spencer. I would not trust them too much though.
There is a Swaziland pensions manager that had a member of staff who was stashing cheques in the drawer instead of banking and reinvesting the proceeds. The company was still getting a clean opinion from the external auditors.
What I learnt from external audit is that due diligence should include independent checks. Auditors look at a very narrow scope and will for example not be concerned with repatriation of profits through inflated management/consulting fees and concentration risk. Debt covenants, sweetheart deals with 'supposed' suppliers etc. All these are risks that an investor should be worried about. For all I know, Plush Products and Kalahari Floors could be making more money that is reported to Olympia. Some manufacturing companies go as far as creating entities that pose as customers in order to obtain borrowing or more funding from investors. The external auditor and lenders are especially blind to this kind of risk.
If bank credit appraisers started understanding what an unqualified opinion on the financial statements meant, quite a number of borrowers would be turned away.