The Finance Ministry is set to pay Alvarez & Marsal $150,000 in a few days in order to allow the firm to conduct extensive forensic auditing of all Central Bank accounts, a government source said.
“The company will resume full forensic auditing once the contract with the Lebanese state is signed. BDL has already provided the firm with all the documents and data requested by Alvarez,” the source told The Daily Star.
Alvarez had previously suspended all auditing of BDL’s accounts due to the latter’s refusal to fully cooperate with the company.
But the Lebanese Parliament passed a law last year lifting the banking secrecy on BDL’s accounts for one year in order to enable the company to conduct forensic auditing without any excuses or hindrances.
The source revealed that Alvarez will release the preliminary findings 12 weeks after it resumes its work.
He added that the new government is obliged to cooperate with the company since Parliament lifted the banking secrecy for one year.
“It doesn’t matter if we have a new government in the future. No government can annul this contract or even modify it,” the source explained.
Alvarez will send its trained staff to the Finance Ministry to work closely with BDL.
The staff will use the offices of the Finance Ministry to check all the data they receive and question any staff member at BDL.
The company’s staff has total liberty to access any file and to ask any question to any BDL employees.
Under the terms of the contract, BDL is obliged to fully cooperate with Alvarez.
President Michel Aoun is spearheading the campaign to conduct forensic auditing of all of BDL’s accounts.
Total forensic auditing of BDL and all the ministries and public departments in Lebanon is also one of the main conditions of the International Monetary Fund.
A country or a company usually seeks the help of a forensic auditing firm in cases of suspected financial embezzlement, misappropriation of funds or corruption in an entity.
This will be the first time in Lebanon’s history a government has requested the assistance of an international firm to conduct forensic auditing of BDL.
But experts in the field of forensic auditing warn that among the main conditions of an effective forensic audit is the existence of an honest and impartial judicial system and this maybe one of the drawbacks facing the authorities.
Forensic audit procedures are used to obtain evidence to be used in court.
Deloitte & EY 2018’s qualified auditor’s report revealed discrepancies in Lebanon Central Bank’s financials, mainly their balance sheet.
Deloitte & EY’s auditors believe some assets were inflated and others were not re-evaluated to reflect the 2018 balance sheet’s true value.
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