Ethical Dilemma Puts Accounting Firm, Regulator at Odds

P. Ernest Parker, Partner, Parker and Company

By David A. Yates and Robin Dopoe

Parker and Company, a member of the Liberian Institute of Certified Public Accountants (LICPA), has challenged the organization’s suspension of its membership and practicing license. The firm, whose license was suspended late last month, said the decision by the LICPA is an “egregious, overreach and miscarriage of justice.”

Parker and Company’s suspension came after it refused to grant the LICPA’s Governing Council’s request for its client—the Central Bank of Liberia financial statements and management letters.

“We are committed to a high level of professionalism and integrity, and will not waiver from our commitment to protect clients’ information at all cost,” the firm said.

According to LICPA Governing council, its request was made as a the result of the current national debate resulting from the Independent Review by Kroll Associates Inc. and the Presidential Investigation Team (PIT) regarding allegations of the disappearance of new Liberian Dollar banknotes, as well as the Agreed-Upon-Procedures by the General Auditing Commission (GAC) involving the L$25 million mop-up exercise at the Central Bank of Liberia.

LICPA added that the suspension of the licenses of the firm as well as of its founder and Chief Executive Officer, Ernest Parker, is in connection with its outright failure to honor an earlier requirement of the Governing Council request for documentations in two separate letters.

Moses S. Kessellie, Executive Director, LICPA

In a telephone interview with the Daily Observer, LICPA’s Executive Director, Mr. Moses Kessellie stated that the Governing Council made similar requests to other about four other accounting firms and, though they expressed similar confidentiality issue as Parker and Company, “the other firms eventually complied with the LICPA’s request,” Kessellie said. He, however, declined to provide the names of the other ‘compliant’ accounting firms, nor did he explain, when asked, how their confidentiality concerns were addressed.

However, in a reaction to LICPA Governing council letter, Parker and Company said they cannot grant the council’s request because the documents in question are properties of the CBL — its clients and cannot be released without authorization.

The firm said: “Reports requested cannot and will not be released unless explicit permission is granted by CBL. Under external auditor’s rules, confidential client information cannot be disclosed without the specific consent of the client. “

“Moreover, the external auditors are not engaged to fix problems although they customarily provide recommendations,” Parker and Company said. “In other words, the disappearing banknotes saga is unrelated to our responsibility as external auditors or at best it has tangential relevance. “

The firm further added that the regulator erred by requesting documents from them instead of following international best practice by coming on-site to conduct a review of reports or working papers prepared by auditors to preserve the auditor’s responsibility for confidentiality.

However the firm, out of respect for the LICPA, sent a communication to its client — the CBL — requesting for permission to turn over to the regulatory body the documents the body needed, but the request was denied by the CBL.

The CBL in response to the firm’s request said reports generated from work done along with KPMG from auditing services are the sole property of the bank and should not be shared with any third party.

“The CBL wishes to inform you that it hired your firm, along with KPMG to provide auditing services to the bank; therefore, reports generated therefrom are solely the property of the CBL,” Nyemadi D. Pearson, CBL Deputy Governor for Operations wrote, responding to Parker and Company’s request for authorization. “However, for the sake of public transparency, the CBL directs that you inform the requesting entity to access its website where all of the information/ documents being asked for are readily available as public records.”

Parker and Company then communicated to LIPCA the CBL’s response — that the accountancy regulator visit the CBL website to access the requested documents since they have not been authorized to distribute it. The firm also advised that LIPCA consider making its own request for documents directly to the CBL, which owns the documents, to conduct its investigation instead to the firm.

Despite the Parker and Company’s communication to LICPA about CBL denying its request to have the requested document turn over to LICPA, the regulatory body still went ahead to suspend the firm for what the body considered as “total disregard of the governing council”.

“It is important to emphasize that at this stage the penalties indicated above have been imposed on you … Parker and Company because of your total disregard of the governing council. In the view of the council, your continuing failure to do as stipulated in the two letters constitutes willful disregard of the council and its authority,” LICPA added.

The regulatory body further said “In view of the foregoing, neither you as an individual nor your firm Parker and Co LLC will be listed in the institute’s forthcoming publication of members and member firms in good standing with the institute, starting from the date of this letter. The governing council of the institute reserves to itself the right to seek further legal sanctions against you as a suspended member as well as against Parker and Company as a suspended member firm of the institute.”

Meanwhile, LICPA said it has refunded the US$2,000 paid by Parker and Company for its annual membership and license fees for the year 2020.

“Please understand that at this point, the penalties indicated above have nothing, absolutely nothing of any kind at all to do with the quality of your work. This is because, given your adamant failure to do as the council has required of you, as at this writing, the council has not been in a position to make any determination of any kind whatsoever in that particular respect,” LICPA communication to the firm added.

According to the Act establishing LICPA, it states that the overarching objectives of the institute are and shall be to represent, promote, and regulate the accountancy profession in Liberia, in the public interest.

Meanwhile, the suspension of Parker and Company could likely cause the CBL audit to be delayed and the 30 April deadline for submitting report to the President of Liberia could be missed.

Article 50 (a) of the Act to Authorize the Establishment of the Central Bank of Liberia (1999) states: “The Central Bank shall, within four months after the close of each financial year, submit to the Government, through the President, an annual Financial Report and Policy Statement that shall contain the following: (a) a copy of its financial statements certified by external auditors.”


  1. Nonsense, on the part of the LICPA! Not having the complete interaction of the two entities, it appeals to me Parker and Company is following best practice in the profession. LICPA please point out to the public where Parker and Company has infringed on the rules that govern your association that justify this suspension.



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