HARARE – Despite issuing a clean audit opinion on Morgan & Co “Made in Zimbabwe Exchange Traded Fund” (MIZ)’s statements for the year ended December 31, 2023, the auditors raised concerns about the fund’s ability to continue operating as a going concern.
The financial results mean the auditors found no material misstatements in the financial statements.
A going concern is a business entity that is assumed to be able to continue operating for the foreseeable future. The auditors noted that the fund’s management has concluded it is appropriate to prepare the financial statements on a going concern basis.
The report, however, also highlights that this is not a guarantee of the fund’s future viability.
The audit identified no “key audit matters,” suggesting no major issues were found during the review. The report, nonetheless, acknowledges the inherent uncertainty in predicting future events and conditions.
This casts some shadow over the fund’s ability to meet its financial obligations in the long term.
“Our review of the managements’ responsibility statement set on page 2, relating to going concern, we have nothing to report having performed our review.
“As noted within the Managements’ Responsibility statement on page 2, the management have concluded that it is appropriate to prepare financial statements using the going concern basis of accounting.
“The going concern basis presumes that the company has adequate resources to remain in operation and that the management intend it to do so, for at least one year from the date of financial statements were signed.
“As part of our audit, we have assessed that the managements’ use of a going concern basis is appropriate.
“However, because not all future events or conditions can be predicted, these statements are not guaranteed as to the fund’s ability to continue as a going concern,” read part of the audit report carried out by Kreston Zimbabwe Chartered Accountants.
The news comes amidst a challenging economic climate in Zimbabwe. The country has faced currency fluctuations and high inflation, which could potentially impact the performance of the underlying companies that the MIZ ETF invests in.
The government announced the introduction of a structured currency on Friday in an effort to resolve the monetary crisis.
While the fund’s financials appear to be in order for the past year, questions remain about its long-term sustainability.
Morgan & Co. was established in 2018 and is registered in Zimbabwe and licensed by the Securities and Exchange Commission of Zimbabwe (SECZ). They are also are members of FinSec and the Zimbabwe Stock Exchange (ZSE).
They provide access to and create investment opportunities for emerging markets investors looking to invest in Zimbabwe.
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