- Parastatals to employ hyperinflationar economies standards
- Fluctuating foreign currency rates a cause for concern
- Three-tier pricing system being abused by accountng officers
THE economic instability, fluctuating foreign currency rates and the three-tier pricing system have dealt a major blow to the ongoing government audits of parastatals amid reports that the auditors will not get correct findings, the Zim Morning Post has learnt.
Sources told this publication that the findings will not reflect the true state of affairs in the government entities because prices are changing on the spur of the moment.
“Suppose an accounting officer inflates prices today, after two to three months the inflated prices would have matched with the prices of the day. This is a great cause for concern,” said the source.
“We are also running into problems with quotations which are now valid for 24 hours. It becomes very difficult to investigate any foul play.”
The source also told this publication that the three-tier-pricing system makes it difficult to carry out audit.
With the skyrocketing foreign currency rates suppliers have employed the three-tier pricing system with different values for the RTGs transaction, foreign currency payments as well as the mobile money payments system.
“This has created so much confusion such that the auditing process will be tough.”
In an interview with this publication the auditor general Mildred Chiri said the only problem she is anticipating is the use of the hyperinflationary economies standard (IAS).
The IAS 29 lists factors that indicate an economy is in a hyperinflationary cycle. One of the indicators of hyperinflation arises when cumulative inflation over a three-year period approaches, or is in excess of 100%.
“We are not sure whether officers are well versed with this the IAS. It was used around 2008 and later abandoned. Some entities have new officers who may not have the technical knowhow on how to implement the system,” Chiri said.
Chiri also added that Zimbabwe’s listed companies will start presenting their financial statements using the IAS following the approval by the Public Accountants and Auditors Board (PAAB).
This is not the first time Zimbabwe has adopted hyperinflation reporting standard. In 2008 it resorted to the same before abandoning it after the adoption of the multi-currency system.