The Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko – has issued Enprise Group Limited (Enprise) a warning for failing to keep proper accounting records. These records are required to ensure financial statements comply with generally accepted accounting practice (GAAP) under section 455(1)(c) of the Financial Markets Conduct Act 2013 (FMC Act).
In particular, Enprise did not provide the FMA with sufficient evidence to support disclosures and assumptions made in preparing financial statements for the year ending 30 June 2022. This was in relation to the value of its Australian subsidiary, Kilimanjaro Consulting, and certain tax related assets.
In October 2022, the FMA received notice from the auditors for Enprise about a disclaimer of opinion issued for the 2022 financial statements. The disclaimer indicated the auditors were unable to obtain sufficient evidence to support certain matters. The FMA made enquiries with Enprise and has found that that Enprise did not comply with s455(1)(c) of the FMC Act.
The FMA’s decision to publish the warning comes following a history of enquiries into Enprise’s financial reporting practices between 2015-2019.
FMA Director of Markets, Investors and Reporting John Horner said: “The FMA considers this warning to be an appropriate regulatory response to a failure to keep proper accounting records. One of the FMA’s functions is to promote the confident and informed participation of businesses, investors, and consumers in the financial markets. Public warnings can support that outcome.
“Publication of this warning will inform the public and the market of Enprise’s non-compliance, help deter similar breaches, and raise awareness of the standards expected by the FMA.”
Enprise has also been asked to provide the FMA with a plan to ensure future financial reporting compliance.
The FMA acknowledges that Enprise has taken positive steps to improve its financial reporting functions in recent months, such as:
- Restructuring the Board’s Audit and Risk Committee which is now chaired by a non-executive director;
- Reviewing the staffing structures with a view to ensuring the financial accounting function is appropriately staffed; and
- Engaging with external consultants to provide and implement recommendations to improve the financial reporting process.
