Securities and Exchange Commission
The Securities and Exchange Commission (SEC) has issued guidelines on the registrations of auditors of public companies and SEC licence as well as the registration of accountants reporting for public companies.
The move is part of efforts to sanitise the securities and investment industry which in recent times have been hit by liquidity challenges and investments losses largely due to poor management of investment firms, characterised by questionable characters managing affairs of these firms.
The requirements for the auditors are: “An auditor of auditee firm shall be a member of the Institute of Chartered Accountants, (Ghana) under the Chartered Accountants Act, 1963 (Act 170) and also hold a practice certificate issued under Act 170.”
On the independence of the auditor, the new guideline said the auditor shall comply with the code of ethics for professional accountants of International Federation of Accountants (IFAC) as well as be independent of the auditee firm.
For the auditor’s report, it shall conform to the provisions of the Companies Act, 2019 (Act 992), auditing standards adopted by the Institute of Chartered Accountants (Ghana) and any additional requirements of the SEC necessary to protect the interests of shareholders and other investors.
With regard to accountants’ report, the scope of work includes reviewing the audited financial statements or audited statements of the public company and issue a report and review prospective financial information to be included in the prospectus and issue a report.
On failure to report discrepancies, the reporting Accountant may be liable for any loss occasioned thereby and may be reported to the relevant professional body for disciplinary action. In addition, the reporting Accountant may be barred from performing any further work in the securities market.
Where there is a breach of any provision stipulated in these guidelines by a reporting Accountant, SEC may take any action(s) specified under section 209 or any other relevant provision applicable under the Securities Industry Act 2016.
The regulator also reserves the right to cancel the registration of the reporting Accountant from its register.
The SEC on 8 November 2019 revoked the licences of 53 Fund Management Companies. This is pursuant to Section 122 (2) of the Securities Industry Act, 2016 (Act 929).
