According to reports, the Botswana Accountancy Oversight Authority (BAOA) has allegedly not met the standards outlined in a performance audit conducted by the Auditor General.
The mandate of BAOA includes issuing, adopting, establishing, monitoring, and enforcing financial reporting, accounting, and auditing standards within the country.
The Auditor General’s office conducted a performance audit on the operations of the Botswana Accountancy Oversight Authority (BAOA). A comprehensive report detailing the findings has been presented separately to the National Assembly for review. The Public Accounts Committee is scheduled to scrutinize the report during its regular session.
According to the Auditor General, the main objective of the audit was to assess the extent to which BAOA efficiently manages its key operations to ensure effective oversight on the accounting and auditing profession in Botswana.
As per the Auditor General’s assessment, the primary objective of the audit was to evaluate BAOA’s effectiveness in managing its core operations to provide robust oversight of the accounting and auditing profession in Botswana.
The Auditor General uncovered several deficiencies in the maintenance of registers, hindering effective oversight by BAOA. During the audit, it was found that BAOA lacked an internal audit function. Instead, the technical department of the Authority was tasked with internal audit responsibilities, contrary to international standards.
“Management in response indicated that the Board of the Authority assessed the risk of not having a fully functional internal audit department and resolved that the size of the Authority and the associated risk at that point in time did not warrant an independent internal audit function,” the report says.
The report says BAOA entirely relied on eligible entities to take an initiative on their own to register as Public interest Entities (PIE).
“This created a possibility for some entities eligible for registration as PIEs to be excluded in the BAOA register. Management indicated that partnerships have been formed with local audit firms to ensure that all eligible Public Interest Entities are registered with the Authority,” the report says.
According to the report, the majority of Public Interest Entities did not renew their registration within the stipulated time. “However, the Authority neither enforced penalties for non-compliance as the Regulations required no provided evidence of any other remedial efforts it made to curb the non-compliance; in response, management indicated that process will be put in place to ensure that registration certificates are issued on time,” the report says.
The report indicates that although the turnaround time for the renewal process was not specified, significant inconsistencies were observed in the time taken for registration renewal at each stage annually. The longest total average application time of 116 days was recorded in 2020, while the shortest average time of 40 days was recorded in 2018.
However, the report highlights that in the adoption of the King III Code, measures were not taken to prevent contradictions between the Code and the already existing legislation concerning Public Interest Entities, particularly State-Owned Enterprises (SOEs).
In response, the Authority notified the parent Ministries and the Parliamentary Committee of this misalignment. The Auditor General also found that “There was inadequate engagement of relevant stakeholders by the Authority which could negatively impact on operational excellence.”
