Accounting firm KPMG RG Manabat & Co. on Wednesday defended the original 2015 and 2016 financial statements of client 2Go Group Inc.
RG Manabat, the local partner of international accounting firm KPMG, audited the 2015 and 2016 financial statements of 2Go Group under the previous management. The new owners of 2Go led by businessman Dennis Uy and SM Investments Corp. hired SGV & Co., which restated the financial statements resulting in substantial decline in profits.
RG Manabat chairman and chief executive Robert Manabat said in an interview at the sidelines of Top Frontier Holdings Inc.’s annual stockholders meeting the restatement of 2015 and 2016 financial performance of 2Go was just “accounting interpretations.”
“We are confident that we will be able to explain our side,” Mabanat said.
“When you look at some of the adjustments, it was a question of interpretation…accounting interpretation,” he said.
Manabat welcomed the move of the Securities and Exchange Commission to conduct an investigation on the matter. Manabat said the company had not yet received a summon from the SEC regarding the issue.
Manabat said this was the first controversy involving the accounting firm. 2Go Group became a client of KMPG Manabat in 2014.
Manabat said despite the controversy, no existing clients of KMPG Manabat had expressed interest in canceling it services. He said KMPG Manabat was even re-elected as the auditing firm of San Miguel-led Top Frontier.
Meanwhile, the SEC ordered 2Go Group to provide additional information and clarification on the restatement of financial reports.
The corporate regulator said the clarification should explain the circumstances requiring the restatement of financial statements, the relevant accounting standards supporting the restatement and overall impact of the restatement on the company’s operations.
“The company is required to submit the written clarification on the statement by July 14, 2017,” SEC commission secretary Armando Pan said in a text message.
Share price of 2Go fell 2.15 percent Wednesday to P22.80, after a two-day trading suspension.
The Philippine Stock Exchange lifted the trading suspension of 2Go shares after the company submitted audited financial statements covering the first quarter of 2017, 2016 and 2015. It also submitted the auditor’s report which contains the summary of adjustments made and provides a comparison and discussion of the financial items being restated and the reason for such restatement.