Markets

FiRe Award judges flag up failure to comply with new companies law

mwatu

Julius Mwatu, the ICPAK vice chairman. PHOTO | WACHIRA MWANGI

Several firms that submitted their annual reports and financial statements for this year’s Financial Reporting Award (FiRe Award) have not complied with the new Companies Act.

The Institute of Certified Public Accountants of Kenya (ICPAK), the promoters of the awards, Thursday said non-compliance with the new law was among the issues flagged by the panel of judges that evaluated the entries.

Under section 148 of the Companies Act, Cap 486, a company is required to present the balance sheet and profit and loss account as well as a statement of compliance.

“Management should ensure that they include a statement of compliance with the Companies Act,” said Julius Mwatu, the ICPAK vice chairman, during a one-day conference held in Nairobi ahead of Friday’s gala dinner and award ceremony.

The new Act, which came into force last year, defines the duties of company directors more clearly and imposes stringent fines or a jail term on wayward directors, among others.

The Fire Awards, which is in its 15th year, is an initiative of the ICPAK, the Capital Markets Authority (CMA), the Nairobi Securities Exchange (NSE) and Public Sector Accounting Standards Board (PSASB).

Its promoters said a total of 399 entries were received — 303 from the public sector and 96 from the private sector.

The panel of judges cited failure to include the name and signature of the accounting officer who signed the annual report and audited financial statements as being among the compliance issues.

They also noted that disclosure of assets and liabilities require significant improvement to facilitate inventory of assets.

“It was noted that a number of entities are yet to incorporate some of the changes introduced and the evaluators hope that by next year there should be significant improvements in the reporting and practices of governance,” said Mr Mwatu.