Late 2015, the Water Supply and Drainage Company of Tirana (UKT) signed a contract with international auditing company Gran Thornton for the auditing and certification of its 2015 balance sheet.
In the audit report from July 17, 2016, after listing a series of documents that were missing or were not provided to the auditing team, Grant Thornton refuses to certify the balance sheet, declaring that “our working group has not managed to receive any additional information that would remove the doubt about these unclarities highlighted above.”
In the normal world, such an evaluation would lead to the dismissal of everyone involved in preparing the balance sheet. If the directors of the UKT wouldn’t do such a thing, they would discredit the name and reputation of the company. The fact that the balance sheet wasn’t certified shows that the company was in financial trouble and tried to hide that fact from third parties, including the auditing company.
A company’s balance sheet is published precisely to protect third parties such as minority share holders and clients, and, in case of public companies such as the UKT, for the information of the public. Such as balance sheet needs to be certified by an external professional auditor to guarantee that it’s been compiled correctly and contains only true financial information about the company.
So when an auditor refuses to certify a balance sheet, that’s usually the end of the story.
But late 2016 UKT tries to find another auditor that may be more willing to certify its 2015 balance sheet. They find an auditing company Mazart, supported by independent auditor Sokol Toska.
But also Mazart and Toska show themselves to be measured in their evaluation. Just like Grant Thornton, draft a certification letter regarding the UKT balance sheet giving their “opinion with caveats,” expressing the same worries and raising the same questions as Grant Thornton in its previous opinion, covering the largest part of the balance sheet.
What is truly remarkable is that neither the Shareholder’s Assembly of the UKT, the CEO, the Board comprising 6 members, nor the accountant that has been responsible for 17 years to compile the balance sheet have not expressed any observation about the auditing of the balance sheet, which, for the second year in a row, completely undermines the credibility in both the leadership and the financial state of the UKT.
The only thing that seems to count is that the UKT has doubled the expenses and travel compensations for its board members in 2016.
It seems as if they still don’t believe in, or, even worse, are not aware of their criminal liability that is clearly articulated in Albanian laws.