Adopt loss control mechanisms, businesses urged
LOCAL businesses can save up to 80% of their revenue through adopting and applying loss control mechanisms, Internal Control Institute of Zimbabwe (ICIZ) chief executive officer Proctor Nyemba has said.
Loss control is defined as a risk management technique that seeks to reduce the possibility that a loss will occur and the severity of those that do occur.
ICIZ is a pioneer institution that has been pushing for the adoption of internal controls and its implementation in Zimbabwe’s public and private sectors.
“They can save 80% because these are control systems. Imagine a camera, and now because of technology you do not need a camera to check who has gone into the office as a fingerprint can now check if you have gone into the office so a lot (of malfeasance) will reduce,” Nyemba told NewsDay Business on the sidelines of the 2024 Loss Control Summit hosted by ICIZ in Nyanga.
“The reason why it is not happening is that some of the CEOs [chief executive officers] are criminals. They know once they implement such controls, they are going to be arrested. Which is why you find today that when you commit white collar crime, no one goes to jail.
“A person who can go to jail is a housemaid for stealing matches, but a person who has committed a white-collar crime of several figures cannot go to jail because of technicalities.”
According to Nyemba, there is no law which gives auditors and accountants powers to perform forensic audits on companies and individuals, leaving them open to lawsuits.
“There is no forensic audit in our government document? Thus, all those forensic audits are illegal. The people who are doing the forensic audits do not have powers, accountants and auditors,” he said.
“PAAB stands for Public Accountants and Auditors Board, not for Forensic Auditors Board, so if you do a forensic audit, get ready to possibly be sued for defamation of character in the next few years.”
He said the difference was that for forensic auditing, this includes an investigation aspect, whereas auditing and accounting did not, indicating that they were not properly being conducted.
ICIZ chairperson Danisa Chinamasa said the difference between a loss and internal control was that the former was a management action while the latter was a process for assuring an organisation’s objectives.
“Loss control is the intentional management action directed at the prevention or reduction of loss resulting from exposure to the perils associated with the pure risks of business,” he said.
“To achieve a high level of loss control, management must identify all areas where such losses can occur and manage the control of these losses.”newsday
