African Sun Limited and its subsidiaries have received a qualified audit report from independent auditors, Grant Thornton Chartered Accountants (Zimbabwe), highlighting concerns over the company’s financial statements.
The auditors drew attention to the restatement of investment property and property and equipment, noting that “the consolidated financial statements for the year ended 31 December 2023 are prepared after restating the opening balances of property and equipment, and investment property to present a fair view the respective balances as at 31 December 2022.”
The auditors also identified two key audit matters, namely revenue recognition and fair value measurement, which they considered to be significant risks.
Regarding revenue recognition, the auditors noted that “there is a presumed risk of inappropriate revenue recognition specifically identified in ISA 240 (R), ‘The auditor’s responsibility to consider fraud of financial statements.'”
The auditors also highlighted concerns over fair value measurement, stating that “property and equipment are measured using the revaluation model and investment property is measured using the fair value model which both requires determination of fair values in accordance with IFRS 13 – Fair Value Measurement.”
They noted that “the determination of fair values for assets is affected by the prevailing economic environment and involve significant judgements.”
The auditors also noted that “the Group’s ability to continue as a going concern” was a key audit matter, but concluded that “we have no reason to believe that the Group will not continue as a going concern.”
In their report, the auditors stated that “we have nothing to report” regarding the other information, which includes the directors’ report, corporate governance report, and chief executive officer’s report.
“In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements, or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
“If based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information. required to report that fact. We have nothing to report in this regard,” the report noted.
The audit report raises concerns over the company’s financial statements and highlights the need for improved internal controls and governance.
The report also notes that the company’s financial performance is affected by significant judgements and estimates, which may impact the accuracy of the financial statements.
