Kiereini is being accused of amassing wealth in Jersey with the help of one Foster who was the CEO of CMC for 20yrs. Finally we can see how our old men are not as clean as we thought.

TWO former directors of Cooper Motors have "illegal offshore accounts" containing hundreds of millions of shillings in Jersey, according to new Group CEO Bill Lay.

"Details of these accounts were kept secret from other directors. One of the accounts has a balance of over Sh240 million. Management is also investigating two additional offshore accounts with substantial transaction activity. Management continues to work on ways to repatriate these funds for the benefit of CMC shareholders," Lay told a press conference yesterday.

the same corruption cycle like kplc...

kenya gvt ====>wants land rovers for military and passats for civil servants=====>CMC supplier (kitu kidogo changes hands)======> land rover manufacturer (Britain, now tata motors)(kitu kikubwa changes hands)======>kenya gvt gets the vehicles at inflated prices======>tax payer foots the bill...NKT!!!!

When the tax man comes into the scene, CMC might as well be history. They will have to pay for taxes on those millions if not billions they have stolen. Bill Lay was a godsend. Finally, we can now see how the britons have been doing business with us. Corruption starts in Britain and has been going on and on.

Delloite & Touche

But now read this standard statement of responsibility...

AUDITORS RESPONSIBILITY
“Our responsibility is to express an independent opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal controls relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.”

Following the defense above, have we ever heard of any audit company in kenya, that had the "the luck to uncover fraud" from any of the listed companies and reported it? I can't remember any....... CMC had issues, audit passed over years, remember AK issues audit passed etc... is it that they are not lucky or do they turn a blind eye and use the defense above to argue that they relied on management representations..... so why do we pay them? if all they do is rely on management representation which is cooked

Jamani, the role of auditors is not to detect fraud but rather to express an opinion on whether a company/organizations financial statements are materially misstated and on whether the organization will remain a going concern in the foreseeable future (which is approximately 1 year).

Auditors usually rely on information provided by the executive management and directors of a company. If the information is withheld as happened in the case of CMC, an external auditor cannot be held liable. Audit standards require that the auditor design their tests in such a manner that if fraud exists, it will be detected. In designing those tests, auditors rely upon the general ledger, financial statements, agreements with suppliers and other contractors, minutes of meetings, company policies etc. Audit tests are therefore only as good as the information provided.

I do not know whether you have read the CMC story about how the fraud was perpetrated but in summary, the money that was allegedly diverted never got into the company's bank accounts and books. Existence of the 3 accounts through which the swindling occurred was never revealed to the company's auditors. Bank balances are usually audited by sending confirmation requests to the counterparties to confirm balances as well as reconciliations. As these bank accounts were not in the company's books, the auditors could not sent confirmation requests.

As I have argued previously on Wazua, shareholders rely on auditors opinions at their own peril. The board of directors remains the most important organ that shareholders can use to check the excesses of management. If the board is crooked, the Wanjiku shareholder is a sitting quacking duck!

Those focussing on Kiereni alone need to be asking themselves where Nd'ung'u and Kibe came thru...