Friday, June 02, 2006

Uchumi: What is the role of External Auditors

In the last Uchumi AGM, there was a heated discussion with some minority shareholders on one side and the board on the other regarding the continuation of Pricewaterhousecoopers as external auditors of the company. The shareholders argued that that PWC did not raise a red flag when Uchumi was going under. This issue was not clearly resolved with the board promising to take the views of the shareholders into consideration.

This question cannot be more relevant than today. The CMA should consult widely and seek to enact a law to define the roles of auditors and other parties on matters of corporate governance.

In the US, Arthur Anderson the former largest accounting firm is no longer in business after being convicted of obstructing justice in the Enron case

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