Islamabad June 06 2021: Audit Oversight Board (AOB) has imposed a penalty of PKR3.5 million to KPMG Taseer Hadi & Co. as it failed to discharged its responsibilities, under auditing standards, during audit of JDW sugar mill accounts. Irregularities related to reporting of Sales tax, differed tax assets, sugar cane capacity, dealing with farmers, classification of receivables from farmers and trade debts related to agri-inputs were found by AOB.
As per regulatory body. the auditing firm failed to perform the audit to obtain reasonable assurance as to whether the financial statements of JDW for the year 2019 were free from material misstatement. Moreover, the auditor report failed to bring out material facts about affairs of the PIC and thereby the auditors therein was not modify to conform with the auditing standards.
As per the auditing standards, engagement partner is responsible for the audit engagement and its performance for the auditor's report that is issued on behalf of the Firm. Further EQC reviewers is responsible to review the financial statements, proposed auditor's report and selected audited documents.
Therefore, the AOB concluded that the failures noted in the observation are violation by the Firm of the requirements of the auditing standards, the requirement of Quality Control Review (QCR) framework and the conditions of the registration with AOB.
Besides imposing fine the regulatory body directs the Firm not to assign any audit engagement of any Public Interest Company (PIC) to its partner Mr. Kamran Iqbal Yousafi for a period of one year.
JDW sugar comprises of three sugar mills Units, JDW Unit-I , JDW Unit-II and JDW Unit-III in the districts of Rahim Yar Khan, Punjab and Ghotki, Sindh.
The Company has been successful in completing and commissioning its two high-pressure Co-Generation plants at Unit-II (Sadiqabad) and Unit-III (Ghoki). The first 26.6 MW plant at Unit-II achieved commercial operations in June 2014 after clearing all testing, certification and trial run requirements. The second 26.8 MW project at Unit-III achieved commercial operations in October 2014 after similarly completing all pre-commissioning formalities.
JDW is also managing Sugarcane Corporate Farms over the area of 24,000 Acres in the Provinces of Punjab & Sindh. By using knowledge, experience together with modern tools and machinery and distinctive agronomic strategies, JDW has been able to built highly efficient and eco-friendly farms with higher yields. Company’s unique farming techniques have also led to the capacity building of existing farmers thereby resulting in improved and reliable cane supply to JDW.