Of the various ironies that have doomed Liberia, accountability and mismanagement have been the iniquities that have dragged this once great country into its current botched state standing. Hence, if the recent suit by the Liberia Institute of Certified Public Accountants (LICPA), an institution that should be the trendsetter on ethics, financial, and accounting issues, is any indication to go by then the task to rescue this country out of the its current state will be an exceptional task.
Recently, the LICPA through Sam Mombo filed a writ of prohibition to prevent the Economic Community of West African States (ECOWAS) auditors from auditing the transitional government of Liberia. The LICPA and certain elements within the government contend that Liberia is a sovereign state that has enough competent human resources to undertake such an engagement. Therefore to bring in external auditors to audit the government is like a punch in stomach and an infringement of the sovereignty of the country.
Now the task is to put into perspective the two main assertions of LICPA that bringing in the external auditors violates Liberia’s sovereignty and that there are enough competent accountants in the country to conduct such an engagement. On the issue of sovereignty, the LICPA assertion is laughable and calls into question the actual intention of Mr. Mombo and his members who opposed the hiring of the ECOWAS auditors.
Anyone who has worked in public accounting knows that the decision to hire an external auditor rests with the board of directors of the institutions and not management or anyone. And the external auditors report directly to the audit committee of the board. Therefore, in an engagement it is important for the auditors to read documents in the permanent file to get acquainted with contracts, debt covenants, long term leases and agreements, among others to effectively conduct the audit.
In the case of Liberia, I am sure that the LICPA and its members are aware that the transitional government came into being through a peace agreement spearheaded by ECOWAS and the international community. Therefore, ECOWAS and the International Contact Group are the stakeholders in Liberia in ensuring that peace is restored in the country. As such, if there is issues that tend to disrupt the peace process such as mismanagement of the country’s resources, it is the responsibility of the international community to resolve the issue.
Moreover, according to Mrs. Ellen Johnson-Sirleaf the decision to bring in the ECOWAS auditors was initiated by her in her discussion with the ECOWAS mediator on Liberia, the former Nigerian head of State, Abdusalami Abubakar, after wide spread complaints of mismanagement in the transitional government. Mrs. Sirleaf disclosed this in a recent town all meeting in Philadelphia. Mrs. Sirleaf was an integral member of the negotiating team that brought the transitional government into power. This then dislodges the sovereignty argument.
On the assertion of competent accountants in Liberia to conduct the engagement, I challenge the LICPA and Mr. Mombo to produce a list of competent members who are CPA or Chartered Accountants (CA) who can independently undertake such an engagement. By competent, I mean CPAs that are licensed in the United States since Liberia follows United States Generally Accepted Accounting Principles (GAAP) and Generally Accepted Auditing Standards (GAAS). Also United Kingdom Chartered Accountants are acceptable since Liberia does not have the rigorous certification programs that are internationally recognized. If Mr. Mombo competent accountants are the CPAs being conferred on members by LICPA or college graduates with degree in accounting, then there is no wonder why ECOWAS brought in those auditors since LICPA accreditation is not international recognized and credible.
The members of the LICPA, especially Mr. Mombo, know that to be licensed in the United States, one has to be licensed by the State Board of Accountancy not the individual state society of CPA or the American Institute of CPA. In addition to the degree requirement, one has to take the uniform CPA exams which comprise financial accounting, taxation, auditing, and business laws and regulations.
Furthermore, it is widely reported in Liberia that the firm headed by Mr. Mombo was contracted to conduct a payroll compliance audit of the government. His firm is yet to issue its report on the engagement. His firm’s failure to issue its report and the lack rigorous licensing requirement for CPA in Liberia should put to rest the LICPA assertion that there are competent accountants in the country to conduct the current audit to meet international standards.
Let me be cleared here that I am not in any way suggesting that all members of LICPA are incompetent. In fact, I want to believe that LICPA is trying to protect its turf but in so doing it has to take into consideration the suffering of Liberian people because of mismanagement of the country resources by the current gang of rulers. I believe that if the LICPA is to be a vehicle through which Liberia can meet the challenges of accountability and ethical standards in financial matters, it has to rethink its role. Instead of trying to protect a corrupt regime, it needs to provide continuing professional education to its members so as uplift the profession in Liberia and bring it to the point that it can be respected within Liberia and the international community.