The Sundaytimes Sri Lanka

Auditors of TFC


The Finance Company (TFC) was once the largest finance company in Sri Lanka. Consequent to the Golden Key debacle it was apparent that the auditors of some Ceylinco companies including TFC were not fit to be auditors. I wonder whether CA Sri Lanka has withdrawn the practising certificates issued to former auditors of TFC.

All the leading quoted companies have recognized auditors. But who are the auditors of TFC? A very small audit practice. Considering the volume of transactions involving several branches, do these auditors have the facilities and staff to carry out an audit of a company as big as TFC? How many other quoted companies are audited by this firm? Not a single?

The directors of TFC owe it to the depositors who continue to have faith in the company, to appoint a reputed auditor. For a fee of Rs.1.5 million any leading audit firm will offer themselves as auditors. But the billion rupee question is, will the directors expose the affairs of the company to an independent auditor? The directors are confident that TFC will again be the largest finance company in the near future. In fact the Chairman of the company is on record that if he had the money he would have bought TFC shares trading at present at a low price!

Were related party transactions involving directors properly disclosed in the 2010/11 audited accounts? One non executive director was compelled to resign. The executive directors should realize that an appointment of an independent audit firm with a good reputation is in their interest as well as all the deposit holders. As a shareholder I wish to raise this issue at the forthcoming AGM of TFC. An auditor who can be influenced by the TFC Chairman due to his past connections is not the best choice.


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