ICATT boss: Seeterram will face due process

The Institute of Chartered Accountants of Trinidad and Tobago (ICATT) has not made any decision on what course of action, if any, would be taken against auditor Chanka Seeterram for his treatment of the Hindu Credit Union’s (HCU) accounting records.

At the HCU enquiry on Tuesday, during cross-examination by British lawyer, Marion Smith, Seeterram testified that he agreed to treat a $31 million loss experienced by HCU in 2005 as a prior-year adjustment rather than in the profit and loss account, where he agreed on Tuesday it should have been.

Seeterram’s decision meant that the credit union was able to report a surplus of $6 million, when it should have reported a loss of $25 million. Under cross examination, Seeterram admitted that he hid the loss because the management “needed to buy some time to get some external help.”

In an interview, President of ICATT, Derek Mohammed said the matter would have to be discussed by ICATT’s Council and a determination would have to be made on whether any action can be taken. Mohammed, who is a partner with Deloitte & Touche, assured that the profession is governed by a code of ethics and its membership is bound by that code. Mohammed added that as head of ICATT, on an overall basis, he is concerned.

Asked whether Seeterram would be fined, Mohammed said due process would have to take place and if it is determined that there is a case, then the disciplinary committee would have to take action. Asked whether altering the accounting records of businesses is normal and proper accounting, Mohammed said: “An auditor shouldn’t do that. It would be contrary to international standards on auditing.”

Asked whether Seeterram’s decision to alter the HCU’s books is considered to be fraud, Mohammed said it depended on the outcome of the investigation if any investigation would be conducted. ICATT’s rules of conduct handbook, which is posted on its Web site, states that a member of the organisation “shall not knowingly misrepresent facts,” and requires accountants to conduct themselves “in a manner consistent with the good reputation of the profession.”

The rules of conduct also states: “A member shall not express an opinion that financial statements are presented in conformity with generally accepted accounting principles if such statements contain any departure from an accounting principle promulgated by Council which has a material effect on the statements taken as a whole, unless the member can demonstrate that due to unusual circumstances the financial statements would otherwise have been misleading.”

ICATT is expected to issue an official statement later this week.