THE Zimbabwe Stock Exchange (ZSE) says it has considered the state of the macro-economy in relation to currency and exchange issues and will, therefore, not bring to book firms whose financial results have been hit by adverse opinions.
An adverse opinion is a professional opinion made by an auditor indicating that a company’s financial statements are misrepresented, misstated and do not accurately reflect its financial performance and health.
And normally when a company is hit by an adverse opinion, the ZSE’s listings committee is supposed to convene a special meeting to consider the effects of such opinions and the continued listing of the affected issuer as required by clause 3.26 in Section 3 in the ZSE’s Listings Requirements.
“Having observed the pervasiveness of the challenge across all reporting entities, the ZSE made a decision to waive the requirement for the special Listings Committee meeting(s) regarding the audit opinions issued on basis of non-compliance with IAS 21.
“However, the ZSE will still proceed to notify the Securities and Exchange Commission of Zimbabwe and provide it with the requisite supporting documentation with regards to all modified opinions,” said ZSE chief executive officer Mr Justin Bgoni.
“The ZSE’s resolution was informed by the understanding that it was not the Listed Companies’ volition not to comply with the financial reporting standards but rather a matter of complying with the obtaining laws of the country as prescribed by Statutory Instrument 33 of 2019.
“Going forward, issuers are expected to fully comply with International Accounting Standards as guided by the listing requirements unless the country’s statutes direct otherwise.”
The adverse opinions that have been assigned on most companies’ 2018 financial results have been a result of monetary and exchange policy developments in the country since last year.
When Zimbabwe dollarised in 2009, listed firms adopted the United States dollar as their book keeping currency.
However, there have been a lot of changes since then namely the introduction of bond notes in 2016, the separation of RTGS (real time gross settlement) bank accounts and US dollar Nostro accounts last year.
Mr Bgoni said they “will continue to engage the Public Accountants and Auditors Board on any new developments regarding financial reporting by issuers”.–chronile.co.zw