Fletcher & Evance denies it is a bogus firm that carried out RBM’s Export Development Fund forensic audit report

* Emphasises that it has the capacity, skills and procured tools to handle any type of forensic audit in Malawi and anywhere

* Fletcher & Evance is a limited company and the only specialized forensic accounting firm in Malawi

* It emerged as the preferred bidder for the EDF audit exercise out of three short-listed firms

* Restricted tendering is the recommended approach in forensic audit as it does not alert fraudsters

By Duncan Mlanjira

Fletcher & Evance, which was described as a bogus firm that was tasked to carry out a forensic audit report for Export Development Fund (EDF), has put the record straight that over the years it has developed the capacity, skills and procured tools to handle any type of forensic audit in Malawi and anywhere.

This follows reports that was fed in the media that the Board of Directors of EDF — a subsidiary of the Reserve Bank of Malawi (RBM) — hired a non-auditing and not-registered firm to conduct auditing at the institution, saying this was deliberately done to cover up some financial misappropriations.

In a press release on Wednesday, March 30, Fletcher & Evance said the reports mispresented facts on the special audit it conducted on EDF, one of which is the claim to it being bogus.

The firm said EDF Board of Directors requested the company to submit a proposal through restricted tendering to conduct a special audit on EDF’s Commodity Market Marketing (CMM) unit.

“Restricted tendering is the recommended approach in forensic audit as it does not alert fraudsters who can destroy the integrity of the evidence and conceal illicit matters,” says the press release.

“Fletcher & Evance emerged as the preferred bidder out of the three (3) short-listed firms, and Fletcher & Evance conducted the forensic audit and submitted its report with recommendations to the board of EDF.”

The firm further says it is a limited company and the only specialized forensic accounting firm in Malawi.

“Over the years at Fletcher & Evance, we have developed the capacity, skills and procured tools to handle any type of forensic audit in Malawi and anywhere.

“We use the most sophisticated analytics, including machine learning and complex algorithms, to detect and investigate fraud and all forms of malpractices.

“Forensic Audit is a rare specialization in the field of accounting, and only those who specialize in specifical areas of accounting, investigative techniques, law of evidence, and ability to recognize criminal activities are the ones who can do these audits.

“Forensic audit is not the same as financial audit which is regulated by the Public Accountants and Auditors Act No.5 of 2013, through the Malawi Accountants Board (MAB) and the Institute of Chartered Accountants in Malawi (ICAM).

“Neither an auditor nor a certified accountant can automatically become a forensic auditor.”

The firm further says that with its forensic auditors, “apart from being members of MAB and ICAM, are affiliated with worldwide specialized forensic audit institutions like the Association of Certified Fraud Examiners (ACFE) – USA and ACFE Malawi Chapter”.

It is also affiliated with the Institute of Certified Forensic Accountant (ICFA) – Canada, and the International Institute of Certified Forensic Investigation Professionals (IICFIP) — USA/Kenya among others.

It said the media report “does not refute nor deny its findings in the EDF report, nor does it provide any evidence to the contrary. In the absence of this, the article entirely agrees with our findings and recommendations.

The media article said the forensic audit report made serious accusations against EDF management of not following laid down procedures in processing lending transactions.

It has further faulted the EDF Directors for approving such transactions and showing gaps in corporate governance as well as oversight role during the review period.

The report has also condemned RBM Internal Auditors for failing to identify and report serious issues to the Board of EDF during the audit of EDF’s transactions.

When contacted, the faulted management of EDF claimed they were not aware of the content of the audit report, as the EDF Board of Directors did not share the report with them.

The EDF management also complained and expressed disappointed in the manner in which the report had been handled mainly as it had been deliberately released to the media houses and hence, public at large without being given any chance of looking at the audit queries and provide necessary responses, as should have been the case if the audit was conducted in good faith and with good intentions.

Management was also surprised to hear from the press that the purported report strangely contains specific recommendations bordering on administrative actions such as taking disciplinary action against management and staff of the Fund contrary to the professional format in which a meticulous and proficient Forensic Audit Report is written.

Fletcher & Evance say the formation of the Institute of Forensic Auditors in Malawi (IFAM) is currently underway, which will regulate forensic accounting in Malawi through the Institute of Forensic Accountants in Malawi Bill that is currently being drafted.

“We would like to assure the public that Fletcher & Evance will continue conducting forensic audits in its efforts to assist in the fight against fraud and corruption with objectivity, professionalism and will not compromise on its standards nor carry any prisoners.”