ICPAK Launches Investigation into Rogue Accountants Following Senate Criticism

The Institute of Certified Public Accountants of Kenya (ICPAK) has initiated an investigation into potential breaches of financial reporting standards by its members, following criticism from the Senate Public Accounts Committee regarding the performance of county assembly accountants. ICPAK chairman Philip Kakai stated that the regulator is committed to upholding the highest professional standards and will take disciplinary action against any members found to be engaging in misconduct.

According to ICPAK, a significant number of counties, ministries, departments, and agencies have received modified audit opinions, including qualified, adverse, or disclaimer opinions, over the past decade. In the 2022/23 financial year alone, out of 340 audited entities, 109 received qualified opinions, two had disclaimers, and one received an adverse opinion. These findings have raised concerns about the integrity and reliability of financial reporting in Kenya's public sector.

Why this matters: The investigation by ICPAK into potential misconduct by its members in the public sector is an essential step towards improving financial accountability and transparency in Kenya. Addressing issues of malicious reporting and strengthening oversight mechanisms can help restore investor confidence and promote better governance in the country.

To address these issues, ICPAK has recommended several measures, including the establishment of dedicated financial reporting units, the incorporation of technical expertise for the Senate Public Accounts Committee, and the strengthening of oversight through internal audit and audit committee reports. These steps aim to combat malicious reporting practices and enhance the overall quality of financial reporting in the public sector.

Chairman Kakai emphasized ICPAK's commitment to maintaining the highest standards of professionalism, stating, "We will not hesitate to take disciplinary action against any of our members found to be engaging in misconduct or breaching the code of financial reporting. It is our responsibility to ensure that the integrity of the accounting profession is upheld and that the public can trust in the financial information provided by our members."

The investigation launched by ICPAK is expected to review specific cases highlighted by the Senate Public Accounts Committee and determine if any ICPAK members have violated professional standards. The findings of the investigation and any resulting disciplinary actions will be closely watched by stakeholders in Kenya's public and private sectors, as they seek assurances of improved financial accountability and transparency.

Key Takeaways

• ICPAK investigating potential financial reporting breaches by members.
• Many public entities received modified audit opinions in 2022/23.
• ICPAK recommends measures to improve financial accountability and transparency.
• ICPAK committed to disciplining members found engaging in misconduct.
• Investigation aims to restore investor confidence and promote better governance.