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Trustco parts way with auditors after 20 years – cites in-house policy and conflicting regulatory oversight

Trustco parts way with auditors after 20 years – cites in-house policy and conflicting regulatory oversight

Citing their own in-house audit policy plus complicated compliance issues as a listed entity, Trustco Group Holdings announced this week that their long-standing auditors, BDO Namibia had no alternative but to step back. BDO Namibia officially resigned as the group’s auditors on 20 November 2020.

BDO was first appointed as the auditors of the Trustco subsidiary, Legal Shield, in 2000. “The healthy engagement between the entrepreneurial mindset of Trustco and the independent audit mindset of BDO Namibia worked together and produced unmodified and high quality audited financial statements for Trustco and its subsidiaries,” Trustco said in a statement announcing the resignation.

In the first BDO audit, Trustco posted revenues of N$4 million, a profit of N$172,000 and N$2.6 million in assets. With BDO’s final audit for Trustco this year, Trustco has grown to over N$660 million a year in profits, and N$6.2 billion in assets.

Some two years ago Trustco introduced an auditors rotation policy based on a 10-year cycle. In the meantime, the group had to adapt to the stringent audit requirements of listed entities after the group’s listing on the Johannesburg Securities Exchange in South Africa.

Recently, the group was at loggerheads with the JSE compliance department over certain transactions between Trustco’s main shareholder, Dr Quinton van Rooyen, and the group at large. The JSE viewed these transactions as not complying with so-called IFRS (International Financial Reporting Standards) that are applied to and expected of all entities listed on Africa’s largest bourse.

This has led to a firm instruction from the JSE that Trustco must align its auditing practices and standards to IFRS.

“BDO Namibia was an excellent audit partner, forward looking and ethical, whilst retaining their independence,” the group stated.


 

Trustco Group Holdings Ltd Chief Executive, Dr Quinton van Rooyen.


 

About The Author

Daniel Steinmann

Brief CV of Daniel Steinmann. Born 24 February 1961, Johannesburg. Educated at the University of Pretoria: BA, BA(hons), BD. Postgraduate degrees are in Philosophy and Divinity. Editor of the Namibia Economist since 1991. Daniel Steinmann has steered the Economist as editor for the past 29 years. The newspaper started as a monthly free-sheet, then moved to a weekly paper edition (1996 to 2016), and on 01 December 2016 to a daily digital newspaper at https://economist.com.na. His editorial focus is on economic analysis based on budget analysis, dissecting strategic planning and assessing the impact of policy formulation. For eight years, he hosted a weekly talk-show on NBC Radio, explaining complex economic concepts to a lay audience in a relaxed, conversational manner. He was a founding member of the Editors' Forum of Namibia. Over the years, he has mentored scores of journalism students as interns and as young professional journalists. He often assists economics students, both graduate and post-graduate, to prepare for examinations and moderator reviews. He is the Namibian respondent for the World Economic Survey conducted every quarter for the Ifo Center for Business Cycle Analysis and Surveys at the University of Munich in Germany. He is frequently consulted by NGOs and international analysts on local economic trends and developments. Send comments to [email protected]