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Institute of Chartered Accountants Ghana sanctions 4 auditing firms involved in the collapse of banks

The Institute of Chartered Accountants (ICAG) has sanctioned four auditing firms that audited the seven banks that collapsed in 2017 and 2018.

ICAG

According to ICAG, the four firms have been sanctioned for non-compliance with auditing standards.

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ICAG sets up committee 

The ICAG formed a committee to look into the roles played by audit firms in the collapse of commercial banks in Ghana.

This was to formalize the procedure to handle complaints against its members. The Professional Standards and Ethics Committee of the Institute, in line with its mandate, initiated the necessary enquiries on the matter and that appropriate action will be taken if merit to the complaint is established.

The committee was also to determine:

i) Why couldn’t the external auditors of these banks pick up the going concern difficulty signals during the audit process?

ii) Does it amount to inefficiency or negligence?

iii) Is there any disciplinary action the Institute can apply to these auditing firms?

According to Accra-based Joy FM, the ICAG Council has endorsed the recommendations of the Disciplinary Committee to sanction the affected audit firms.

The Institute has indicated that it will at the right time issue a statement particularizing the sanctions meted out to the respective firms.

However, ICAG has insisted that the said infractions did not lead to the seven banks being placed under receivership.

The collapse of seven banks

In August 2017, the Bank of Ghana (BoG) approved GCB Bank Limited’s acquisition of the good assets of UT Bank and Capital Bank, through a Purchase and Assumption Agreement.

In August 2018, the BoG announced the formation of Consolidated Bank Ghana Limited (CBG) to take over the good assets and the operations of Five (5) local Banks that were placed under receivership by Bank of Ghana.

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