The Institute of Certified Public Accountants
of Kenya (ICPAK) has launched a probe into Deloitte’s alleged
misreporting of troubled company CMC Motors’ financial
statements.

The investigation by ICPAK followed a
complaint filed by the Capital Markets Authority accusing Deloitte
Kenya, which terminated its audit contract with CMC Motors in March
of this year, of misconduct.

Deloitte is also accused of overseeing
inflated CMC Motors’ revenues and of failing to disclose the firm’s
subsidiary in South Sudan in the annual reports, according to the
Business Daily.

ICPAK said the investigation into Deloitte may
also potentially involve the firm’s previous auditor, PwC Kenya, as
the alleged flaws extend to a period beyond 2005 when Deloitte
overtook the tenure.

Both Deloitte and PwC were contacted by
International Accounting Bulletin but declined to
comment.

If either were found guilty, the Big Four
firms’ partners would face suspension of their practising
certificate and be reprimanded by ICPAK’s disciplinary
committee.