The Sunday Mail
THE National Social Security Authority (NSSA), which is a controlling shareholder in Fidelity Life Assurance, is concerned over the “current extent of the cost” of the ongoing forensic audit taking place at the insurance group, which is understood to be attracting a $500 000 price tag.NSSA holds a 27,6 percent stake in Fidelity.
The Authority’s board chairman Mr Robin Vela told The Sunday Mail Business last week that the way KPMG Chartered Accountants Zimbabwe was “imposed” to undertake the forensic audit was worrying.
Insurance and Pensions Commission (IPEC) ordered the audit that is being conducted in terms of Section 67(2) of the Insurance Act Chapter 24:07.
Said Mr Vela: “We endorse the forensic audit imposed on the company by IPEC that is being undertaken by KPMG, though we have issue with the manner the mandate was granted and what we understand is the current extent of the cost of their engagement.”
Mr Vela could not be drawn into revealing how much KPMG has charged for the audit.
However, investigations indicated that the audit came with a $500 000 bill.
Speaking in confidence, a Fidelity Life board member confirmed that KPMG is demanding a mammoth $500 000 for the exercise.
“The board has not authorised any payment for the KPMG audit fees. We have also obtained legal opinion regarding the estimated audit fee of $500 000 due to KPMG which we believe is excessive and unaffordable.
“We continue to seek the commissioner’s audience for a meeting to discuss the same,” said a Fidelity Life board member.
It could not be established if the estimated $500 000 charge covers the April to August period of the audit or if it was for the initial April to May period.
The forensic audit started in April and was due to conclude in May but has since been extended to August.
Some audit experts say the longer an audit takes, the more detail the firm will be grappling with.
It is unclear in this case if the audit is taking longer because of the scale of contentious issues at Fidelity Life.
In Canada, the Federal Court of Canada recently admonished lawyers for KPGM and the Canada Revenue Agency (CRA) over delays in a slow-moving court action that started over three years ago.
It is said KPMG had been ordered to provide key documents by May 13 this year but failed to do so and CRA went along with it and no reason was proffered for the failure.
