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The accountants’ lobby is also pushing for stiffer penalties for offences in the book-keeping and audit professions.
These include minimum fines of Sh5 million for individuals and five per cent of
revenue for audit firms found culpable of gross negligence.
Currently penalties for both firms and individuals are capped at Sh100,000.
The proposed accountants’ tribunal will be independently constituted — with powers similar to that of a High Court — and will replace ICPAK’s disciplinary committee, which is usually dominated by State appointees.
The proposals have been introduced by ICPAK as amendments to the current Accountants Act as a strategy to tame and punish rogue auditors.
“The proposed new laws… seek to regulate the entire accountancy value chain, which runs through from book keeping, preparation of financial statements to auditing,” said ICPAK chairman Benson Okundi yesterday.
The proposals come as a number of audit firms come under fire for allegedly being involved in or covering up manipulation of accounts at Kenyan firms.
ICPAK said its disciplinary team has dealt with over of 20 cases in the last two years and currently has six active cases under investigation.
“Where appropriate, disciplinary measures were taken as prescribed by the Accountants Act,” said Mr Okundi, while refusing to name any offenders.
Deloitte & Touche has been on the spot over accounting irregularities at sugar miller Mumias, car dealer CMC Holdings, Dubai Bank and Tuskys supermarkets.
Ernst & Young, who were appointed auditors of East African Portland Cement (EAPCC) in the year to June 2013, have been accused of covering up financial irregularities at the Athi River-based firm.
PricewaterhouseCoopers (PwC) was investigated in the wake of Uchumi Supermarkets’ near-collapse in 2006 to see whether its auditor’s opinions were in step with professional standards.
The proposed revisions to the accounting law will see convicted accountants and audit partners who sign off cooked financial statements have their practicing licences revoked for a ten-year period.
ICPAK said fixing fines at five per cent of audit firms’ turnover is targeted at reining in the Big Four – Deloitte, Ernst & Young, PwC and KPMG – as the current penalty capped at Sh100,000 is deemed too lenient.
