The Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko – has issued a warning to Enprise Group Limited (Enprise) for lack of proper accounting. These records are required to ensure that the financial reports conform to generally accepted accounting practice (GAAP) under Section 455(1)(c) of the Financial Markets Conduct Act 2013 (FMC Act).
In particular, Enprise has not submitted sufficient evidence to the FMA to support the disclosures and assumptions made in preparing the financial statements for the year ended 30 June 2022. This related to the value of its Australian subsidiary Kilimanjaro Consulting and certain tax-related assets.
In October 2022, the FMA received a waiver of an opinion on the 2022 financial statements from Enprise’s auditors. The disclaimer indicated that the auditors were unable to obtain sufficient evidence to support certain matters. The FMA made inquiries with Enprise and found that Enprise violated Section 455(1)(c) of the FMC Act.
The FMA’s decision to release the warning follows a series of investigations into Enprise’s financial reporting practices between 2015 and 2019.
John Horner, Director of Markets, Investors and Reporting for the FMA said: “The FMA believes this warning is an appropriate regulatory response to a failure to maintain proper accounting records. One of the tasks of the FMA is to promote the trusting and informed participation of companies, investors, and consumers in the financial markets. Public warnings can support this result.
“The release of this warning will educate the public and market about Enprise’s non-compliance, help deter similar breaches and raise awareness of the standards expected of the FMA.”
Enprise was also asked to submit a plan to the FMA to ensure future financial reporting compliance.
The FMA recognizes that Enprise has taken positive steps to improve its financial reporting capabilities in recent months, such as:
- Reorganization of the Board’s Audit and Risk Committee, now chaired by a non-executive director;
- Review of personnel structures with regard to adequate staffing for financial accounting; And
- Working with outside consultants to provide and implement recommendations to improve the financial reporting process.
Download the Enprise Group Limited warning letter in PDF format
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