A witness to the respondents in the ongoing tribunal set up to investigate the suspended Auditor General, Lara Taylor-Pearce, and her deputy for alleged misconduct, has told the tribunal that in an auditing process, the auditor need not seek the consent of the auditee before contacting a third party for confirmation of evidence.
Aina Vivian Bell, an expert witness with over 25 years experience as an auditor and 40 in accounting testified before the tribunal in Freetown on Tuesday 12th December 2023.
Led in by the first respondent, Ms. Taylor-Pearce’s lawyer, Rowland Wright, the witness said the reason for this is that the auditor should be independent when carrying out an audit exercise.
The witness however noted that the issue of consent applies to finance auditing dealing with financial institutions pointing out that there is a confidential agreement between a banking institution and its customers, which ought to be upheld.
According to him, compliance auditing which deals with laws and regulations, and performance auditing which deals with the structure of an institution, does not require the auditor to seek the consent of the institution being audited when requesting third-party confirmation.
The witness, who said he was requested by the Institute of Chartered Accountants Sierra Leone (ICASL) to testify in the matter, told the tribunal that when executing an auditing exercise, there are ethical codes and international standards, which the auditing institution should abide by. But, according to the witness, none of those codes and standards requires an auditor to seek consent or permission from the auditee before reaching out to the third party for confirmation.
During cross-examination by state lawyer, Joseph A.K. Sesay, the witness said ICASL is the local regulatory body for auditing institutions in Sierra Leone and that ICASL can issue standards because they have the legal authority to do so and that Audit Service Sierra Leone is obliged to abide by those ethical standards, and that if they are breached, ICASL can levy penalty.
Bell further told the tribunal that the reason for third-party confirmation was to clarify suspected forgery or fraud in documents during transactions, which were submitted to the auditor during the auditing process.
He noted that if the auditor is given any transaction document that is questionable, they need to verify and move ahead. But at that stage, the auditor need not ask the auditee for permission.
Commenting on how the auditing process ought to happen, the witness said all documents requested, should be given to the auditor at the beginning and that there may be some needing clarification with the auditee while others do not.
Bell also told the tribunal that if the auditor gets two different answers for the same question from the auditee, the auditor should expand the auditing exercise by reaching out to a third party and that if the third party gave two answers, the auditor should rely on the first answer from the third party. He added that sources from third parties are more reliable compared to those from the auditee.
The witness affirmed a question whether Audit Service Sierra Leone has at any time between 2008 and 2021 audited the office of the secretary to the president of Sierra Leone.
He also pointed out that the issue of confidentiality does not apply when seeking a third-party confirmation because the audit is concerned with how public funds are used, and that the process does not deal with personal issues. He, however, noted that the auditor can contact the auditee if they believe they can get the answer from the auditee, and that if the texts of receipts are not visible, it could be concluded as ineligible.
He also talked about how a draft of the report would be sent to the auditee, who would be required to respond in 15 days after which the audit management would have a final look at and produce the final report.
Commenting on one of the two requests sent by the Chairman of the Lancaster Eden Bay Hotel in Beirut in connection to the one-night stay of President Bio and his entourage, the witness told the tribunal that money laundering took place in the mode of payment. He said the chairman of the hotel ought not to have signed such a transaction, but the accountant, manager, or general manager ought to have done it.
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