‘Financial results delay to persist’

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ZIMBABWE Stock Exchange (ZSE) chief executive Justin Bgoni says listed companies will continue seeking extensions to announce their financial results due to shortage of auditors and reporting complications associated with a hyperinflationary environment.
In an interview with The Financial Gazette, Bgoni said the situation will, in the “short-term get worse before it gets better” as companies are missing “normal deadlines”.

“The challenge (with results delay) is three-fold, the first being there is a shortage of auditors in Zimbabwe. So, what is happening is accounting firms are losing auditors to overseas firms, but they will still be based in Zimbabwe.

“There are companies in the UK and America who are recruiting Zimbabwean chartered accountants who work from home,” he said.
The past two years have seen a number of ZSE-listed firms delaying announcing their financial results citing extensive work required to comply with international accounting standard 29 – Financial Reporting in Hyperinflationary Economies.

In terms of ZSE requirements, listed companies are required to publish audited financial statements not more than three months after the end of every company’s financial year.
“… reporting in Zimbabwe is just complicated, not only do you produce normal accounting numbers, but you have to produce hyperinflation numbers as well. So, it means you will be ‘doing double work’ for lack of a better word.

“It is just complicated. And I think over time as more and more people leave there is also loss of skills in total in the whole financial sector including listed companies. The whole process is just getting more difficult,” Bgoni said.

Some firms cited the Covid-19 pandemic that inadvertently prolonged the external audit review process and as such impacted on the publication timetable. In some cases, internal processes and regulatory matters being attended to could not be finalised within the 30 extended days.
“We are expecting more people to trade and hopefully hyperinflation goes away,” Bgoni said.

Unifreight Africa Limited on Tuesday announced that it was not able to publish its audited financial statements for the year ended December 31, 2021 by the extended date of June 30, 2022.

“The delay is due to the extensive work necessary to conform to the requirement that financial statements are adjusted for hyper-inflation,” the company said.