CABINET Committee on State Owned Enterprises (SOEs) on Monday proposed a forensic audit of major loss making SOEs on the instructions of Prime Minister Imran Khan. However, the Committee, chaired by Adviser to Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh, suggested that before initiating the forensic audit, a detailed information would be needed whether the Auditor-General of Pakistan (AGP) had forensic audit expertise or we will need to outsource it, cost and time and list of those loss making entities to be forensically audited.
Though the proposal is not final and is subject to availability of necessary information on the subject that is being collected but it has the potential to revive the glory of the public sector entities. It has become a fashion these days to malign public sector entities for their unsatisfactory performance, loss making and corruption but we must not forget that almost all of them excelled at some particular point of time when they were headed by right people and pursued merit-based and professional policies. They started incurring losses due to political interference in their working, induction of unnecessary and incompetent manpower and rampant corruption that remains unchecked to-date. Forensic auditing, among other things, is done to identify the types of fraud, quantifying the amount of losses, determining who was involved, when it began, why it was able to be perpetrated and how it was concealed. This is important in the backdrop of reports that most of the public sector entities have not conducted their audit for years and auditing was not reliable or authentic even if it was done. We believe that instead of condemning these institutions and throwing them for auction in the name of privatization, it would be a worthwhile exercise if forensic auditing is done to pinpoint what went wrong and how the situation can be reversed.
