African bank and Deloitte clash over accounts
Auditor forced to qualify opinion at African Development Bank
Deloitte is in dispute with its audit client, the African Development Bank,
after the firm refused to approve its accounts unconditionally for the first
time in the bank’s history.
The firm had to qualify its opinion on the ADB’s accounts because the bank
refused to apply an accounting rule that has come in under new international
accounting standards.
The bank claimed the rule would misrepresent its financial position, the
FT reported.
One standard in particular -IAS 32 – would transform the capital on the bank’s
balance sheet into a liability.
The bank was set up in 1964 and provides loans to 77 countries.
Charles Boamah, director and controller at the bank, said implementing the
rule would ‘seriously misrepresent the true nature and substance of the
relationship between the member countries and the bank’.
Deloitte declined to comment on the disagreement, citing client
confidentiality.