The NZX should consider carefully whether to accept Allied Farmers' audited accounts. They are signed off by an auditor - PricewaterhouseCoopers. But that sign-off comes with so many qualifications it effectively renders the auditors' opinion redundant.
PWC says it couldn't "obtain sufficient audit evidence upon which to form an opinion
whether application of the going concern assumption remains appropriate".
After reading these accounts they aren't prepared to say whether the company has a future.
They also say they are unable to form an opinion on whether the accounts comply with generally accepted accounting practice in New Zealand or international standards.
Then they say they can't form an opinion of whether the accounts actually "give a fair and true view of the company's financial position as at June 30".
If an independent audit is to ensure shareholders have been given accurate and meaningful information about the value of their shares, then these accounts are surely a failure.
No doubt Allied Farmers is in a very difficult position. As it fights for survival it faces the constant challenge of balancing full disclosure with the risk that bad publicity could do more damage to its prospects and further undermine shareholders' chances of seeing some improvements in the balance sheet.
But the uncertainty created by yesterday's accounts doesn't help either.
And the specifics of Allied's problems should not sway the NZX.
In obtaining the auditors' signature the company has technically ticked the box which allows them to keep trading on the stock exchange.
But the exchange needs to make a call on whether this information is good enough to provide investors with confidence when that is of vital importance. The NZX needs to look at the bigger picture for the good of all investors.
