The four audit firms that were sanctioned for roles played in the collapsed of some banks could have lost their licenses, sources at the Institute of Chartered Accountants Ghana (ICAG) have said.

JoyBusiness understands the audit firms that were sanctioned should have had their licenses revoked and even, in some instances suspended for a year or fined. Based on the Chartered Accountants Act, all the firms that were found to have breached the law, should have had their licenses revoked and even, in some instances suspended for a year or fined.

What was recommended for each audit firm in terms of sanctions?

In the case of J Mills Lamptey, the committee recommended that the firms’ license should be withdrawn, based on the Chartered Accountants’ Act, as well as the engagement partner should be suspended as a member of the Institute for one year.

There was a second proposal, that is; fine them GH¢100 000, while the engagement partner also pays GH¢50 000.

The Council of ICAG accepted fined instead of the withdrawal of licenses.

In the case of PKF, it was also proposed that its license should be withdrawn, suspension for engagement partner for a year or a fined. The engagement partner; that is the person who directly worked on Construction Bank was also fined separately.

Morrison and Association which worked on Beige Bank, the committee also recommended that its license should be withdrawn, while the engagement Partner should also be suspended as a member of the Institute for a year or ask the firm to pay GH¢300 000, while the Engagement Partner fined GH¢50 000.

Deloitte and Touche worked on Unibank, UT Bank and Royal Bank, it was proposed by the committee that the license of the audit firm be withdrawn, while the engagement partner’s license also be suspended for a year.

As an alternative sanction, it recommended that Deloitte and Touche be fined, GH¢1 million, while the engagement partner was also asked to pay GH¢50, 000. Based on the Press Release from the Institute of Chartered Accountants Ghana it is clear that the council did not sanction proposals to have the licenses of these firms suspended.

Why did the firms escape license revocation? 

JoyBusiness is learning that it was agreed to fine them rather than the license revocation because of the impact of possible job loses. Sources say there were pleas that because it was the first time, it would be good to go with the fined rather the outright withdrawal of licence.

Why was the committee set up?

In August 2018, Bank of Ghana announced the formation of Consolidated Bank Ghana Limited (CBG) to take over the good assets and the operations of Five (5) local Banks that were placed under receivership by Bank of Ghana.

In August 2017, Bank of Ghana approved GCB Bank Limited’s acquisition of the good assets of UT Bank and Capital Bank, through a Purchase and Assumption Agreement.

The Council of the Institute of Chartered Accountants Ghana, took note of these recent developments in the banking industry in Ghana, particularly, the question of the Auditors’ work relative to the seven banks that were placed under receivership.

After a meeting held on Monday, 13th August 2018 with the Auditors of these banks, the Council of the ICAG decided to set up a Fact-Finding

The mandate of the Disciplinary Committee

The mandate of the Disciplinary Committee was to review the audit files prepared by the Audit firms on the said banks to

determine whether audit work done supported the opinion issued by the


It also reviewed the specific circumstance of each bank under receivership and determine whether or not there were sufficient grounds to initiate disciplinary action against the Statutory Auditors.

JoyBusiness understands that the Fact-Finding Committee completed its work and presented its final report on Friday, 12th April 2019.

The Council per Section 16 (2) of the Chartered Accountants Act, 1963, (Act 170), set up a Disciplinary Committee for the purpose of holding an inquiry into the conduct of Auditors of the seven banks that were placed under receivership.

Terms of reference of the Committee  

To study the report of the Fact-Finding Committee in respect of the individual firms that audited the Banks that were placed under receivership by Bank of Ghana. Sources say it was asked to recommendations to the Council based on the facts gathered during the inquiry and in accordance with relevant provisions of the Chartered Accountants Act, 1963, (Act 170).

JoyBusiness is also learning that it was asked to make general recommendations to the Council with the view to strengthening the regulatory authority of the Institute and to uphold professional competence, due care and compliance with standards.

The Council did not give the Committee a deadline for submission of its final report. This was to avoid putting undue pressure on the Committee and to ensure that decisions reached on the issues raised in the Fact-Finding report would stand any scrutiny. Thus, the timeline was left to the Committee to decide.

Committee’s engagement with 4 sanctioned firms  

JoyBusiness understands that after the committee completed its work there was “deep” engagement with all the five audit firms.

Based on engagements with the persons close to the Institute of Chartered Accountants Ghana, the committee formally wrote to the firms with an extract of the report pertaining to the respective firms, attached.

The firms were also given the opportunity to reply in writing but required to formally appear before the Committee. Now after this extensive engagement, the committee then made its recommendations to the council of the Institute.

The Committee would thereafter make a recommendation to the Council based on the facts gathered during the inquiry. Sources said following the meeting, the Secretariat was asked to write to representatives of the firms involved to respond to the invitation to meet the Committee. Notices were therefore sent to all the firms on Monday, 20th May 2019, inviting each of the firms to meet the Committee.

Workings of the Committee

EY, Chartered Accountants, PKF Chartered Accountants, J. Mills Lamptey & Co.,

Morrison & Associates and Deloitte & Touche appeared before the committee.

JoyBusiness understands that all the proceedings were audio recorded with the consent of the representatives of the firms that appeared before the Committee.

The representatives of these firms were quizzed based on findings of the fact on the Fact-Finding Committee’s report and the press release by the Governor of Bank of Ghana that relates to the events and circumstances leading to the regulator placing the seven banks under receivership. The representatives were also given ample opportunity to respond to the questions asked by

the Committee members.

Way forward

There were proposals that the challenge came about as a result of the Bank of Ghana relaxed the regulatory requirements which made it possible for Banks with capital adequacy ratios below the required threshold to operate.

Bank of Ghana was aware of the imminent crisis in the banking industry and could have taken prompt action to avert the crisis.

The Committee recommends that the Council organizes regular interactions with Bank of Ghana and other Industry or Sector Regulators to be apprised of issues confronting their respective industries or sectors before it reaches crisis levels.

This would help the Institute to be proactive in making recommendations in order to avert a potential crisis.

The Institute should have mandatory regular engagements with regulators of

the various sectors such as Bank of Ghana (BoG), National Insurance Commission (NIC), Securities and Exchange Commission (SEC) and National Pensions Regulatory Authority (NPRA), semi-annually, to resolve regulatory conflicts and to discuss the developments in the sector that impact on the accountancy profession.