Air Zimbabwe (Private) Limited’s financial statements for 2020 and 2021 have raised significant concerns, with the auditor issuing an adverse opinion for 2020 and an unmodified opinion for 2021.
The acting Auditor-General, Rheah Kujinga’s latest report highlights several key issues, including discrepancies in opening balances, inventory valuation, and going concern uncertainties.
In 2020, the auditor found that opening balances did not agree with prior year financial statements, with variances amounting to USD$4.89 million.
“As at the beginning of the year ended December 31, 2020, Air Zimbabwe’s opening balances. were not agreeing to the prior year financial statement balances.
“Management could not provide a justification or correction for the variances in the opening balances amounting to USD$4.89 million.
“As such, I could not satisfy myself on the accuracy of the opening balances and determine if any adjustments were necessary to the statement of financial position.
“Therefore, for all balance sheet balances, valuation and accuracy of them could not be determined. The prior year financial statements were modified in respect of this matter,” the auditor noted.
Additionally, an inventory count was not performed, casting doubt on the existence, completeness, and valuation of inventories.
“During the year ended December 31, 2020, inventory amounting to USD$14.4 million was recognised in the financial statements. An inventory count was not performed as at December 31, 2020.
“As a result, I was unable to determine whether any adjustments might be necessary in respect of the recorded or unrecorded inventories. I was thus unable to satisfy myself as to the existence, completeness and valuation of the inventories.
“The prior year financial statements were modified in respect of this matter,” the report noted.
The auditor also noted that the company’s current liabilities exceeded its total assets by USD$358.2 million, raising concerns about its ability to continue as a going concern.
In response, management acknowledged the issues and committed to addressing them, including finalising policy documents and aligning accounting processes with the reporting framework.
Despite progress in addressing some audit findings, the auditor noted that one finding from the 2021 report remained outstanding.
“The Commission made progress in addressing audit findings raised in my 2021 and 2022 annual reports. I raised three (3) findings in my 2022 annual report and followed up on one (1) finding which was outstanding from my 2021 annual report. Three (3) findings,” the auditor noted.
