BUSINESS MAVERICK: A R6.5m fine & JSE’s damning indictment of Ayo Technologies

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The JSE suggests that the financial team at listed firm Ayo did not possess the skills to produce financial information that would provide a fair presentation of Ayo’s results to the market since its listing on the JSE in 2017. For a big listed company, presumably staffed by legions of CAs, overseen by a competent CFO and a presumably competent audit committee, the JSE findings were damning.

In the case of the 2018 interims, the JSE noted that profit after tax decreased by 19%, and earnings per share decreased by 13% following restatements.

However, even this was not accurate. According to the JSE, Ayo omitted numerous disclosure notes when publishing its audited 2019 annual financial statement . As a result, the audit report on which the 2019 AFS was based was withdrawn, and the auditor, BDO, reissued its report. According to the JSE, Ayo did not have robust financial reporting procedures and did not appear to have sufficient staff on its finance team. As a result, on the income statement intangible assets, inventories, receivables and payables had to be restated.

The balance sheet also underwent significant changes with alterations made to goodwill, reserves and contingent consideration liabilities, among other items.

 

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