Foreign funding case: Auditors who issued clean chits also come under question

ISLAMABAD: The scrutiny committee of the Election Commission of Pakistan, while unmasking the undeclared accounts of Pakistan Tehreek-e-Insaf, has also brought under spotlight the chartered accountant firms engaged by the PTI for audit purposes.

Two firms have come under sharp scrutiny, M/sAhsan and Ahsan and Muniff Ziauddin & Co. The former was engaged for carrying out the special audit of the party’s funds received between 2010 to 2012 after some party members raised complaints; they had proof that donations were received in the employees’ accounts instead of the PTI’s official accounts. The latter firm has been conducting a financial audit of the party’s accounts but could never spot the hidden accounts.

As far as M/s Ahsan and Ahsan is concerned, it completed the special audit keeping in view the “international standards” and the report was uploaded on the PTI website and it is still there. The party was credited for carrying out accountability from within. However, intriguingly the report was never signed by the auditor, Ahsan Jalal, one of the two partners of this small firm, M/s Ahsan and Ahsan, which is not registered with the Audit Oversight Body, the top oversight body of the audit firms.

Why the special audit report remains unsigned continues to be a mystery. The petitioner in the PTI foreign funding case, Akbar S Babar, raised this question and asked the scrutiny committee to seek an explanation from the auditor. It was not done; however, the role of the audit firm was made part of the report. The committee, after thorough examination, observed that this was not prepared "in accordance with the international auditing standards…. and the report cannot be entertained as a Special Audit Report."

The News contacted Jalal Ahsan to ask why he didn't sign it and how come it qualifies to be declared having been prepared as per international standard. He didn’t offer any response to this question. First, he said that he didn’t want to make any public statement and that he was only answerable to his clients. When pressed again, he said that he couldn't recall as to why he didn’t sign it because the assignment was performed eight years ago. Asked why his firm is not registered with the Audit Oversight Body, he said his is a small firm and mostly the big firms are registered with that body. Jalal and his father are the only two partners of M/s Ahsan and Ahsan.

Muniff Ziauddin & Co is yet another firm that featured in the scrutiny report. It audited PTI’s financials from 2009 to 2013, the period under review of the scrutiny committee. During each year, the auditor’s opinion was the same: “Statements of accounts referred to above present fairly, in all material aspects the cash receipts and payments.” Tariq Sultan Jadoon, a partner of the above-mentioned firm, conducted the audits. “PTI changed its chartered accountant firm in the last year and employed the same firm which had issued the certificate in the first year,” noted the scrutiny committee report.

In the last year under question, 2013, the audit firm didn’t even mention the date “which is material deviation from accounting standards," observed the scrutiny committee. As per opinions of the chartered accountant firm, “the statement of account fairly presents, in all material respects, the cash receipts of PTI for each year…. However, during the course of scrutiny, the committee observed deviation in figures as the same don’t reconcile with the bank statements.”

The report further notes: "It is evident from the above that the chartered accountant of PTI during the scope period didn’t reconcile PTI’s accounts with the bank statements and yet gave fairly kept account certificates as per their audit certificates/opinions given to the Central Executive Committee of PTI, which submitted the same to the Election Commission of Pakistan.” The News couldn’t reach Jadoon for comments.

Intriguingly, Prime Minister Imran Khan has engaged a top audit firm, A.F. Ferguson, for Shaukat Khanum Memorial Cancer Hospital and Research Center right from the beginning. It is considered among the big four audit firms in Pakistan. In contrast to this, Muniff Ziauddin & Co, the auditor of PTI accounts, is considered a mid-ranking firm.