NetOne’s auditor flags material uncertainty related to going concern

NetOne’s external auditor, Grant Thornton Chartered Accountants (Zimbabwe), has raised a material uncertainty related to the going concern of the mobile network operator in respect of the financial statement for the fiscal year ended December 31, 2022 (FY2022).

Grant Thornton conducted the audit in accordance with International Standards on Auditing (ISAs).

The external auditor expressed a qualified opinion, which means the auditor declares that there is an area of uncertainty in a company’s financial statements for FY2022.

The going concern uncertainty in FY2022 was due to NetOne’s current liabilities exceeding current assets by $20,9 billion, coupled with a net loss of $39,97 billion in the period under review.

“We draw attention to Note 30 to the financial statements, which indicates that the company incurred a loss of $39 979 740 459 during the year ended December 31, 2022 and, as at that date, the company’s total liabilities exceeded the total assets by $32 001 471 475, while the current liabilities exceeded the current assets by $20 902 954 654.

“These events or conditions indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter,” said the auditor.

NetOne’s topline rose 25,10 percent to $80 billion in FY2022 from $63,94 billion in FY2021.

“There is a presumed fraud risk with regards to revenue recognition in terms of International Standard on Auditing (ISA 240 Revised). There is a risk that the revenue is presented at amounts higher than what has been actually generated by the company. This is a significant risk and accordingly a key audit matter (KAM),” the auditor said.

“Revenue was considered to be a KAM as it is characterised by high volumes of transactional data. The revenue recording process is highly automated and complex in nature, requiring numerous information technology controls.”

In addition to verifying the occurrence statement, Grant Thornton Chartered Accountants’ audit techniques evaluated the suitability of revenue recognition regulations.-ebusinessweekly