Picture: Global supplier of defense products, Denel. (Supplied).

CAPE TOWN - Defense technology company, Denel have cleared media reports that they have flouted the authority of the Auditor General (AG) after MPs called on auditing firm SizweNtsalubaGobodo (SNG) to review its clean audit of Denel's finances. 

This follows reports that the arms deals company allegedly refused to release an adjusted audit report that will potentially reflect irregular expenditure.

Denel has further been suspected of tabling a flawed report to the Auditor General (AG). 

Denel stated that all matters relating to irregular expenditure in the 2017 financial year have been fully disclosed.

This can be found in note 35 on page 202 of the integrated report. 

In addition, Denel states that this report was meticulously reviewed by SNG, prior to them signing off their audit report on July 31st this year. 

Notably, SNG has been the external auditor for Denel for the past 5 years. 

Denel says SNG has extensive knowledge of their company, especially in key risk areas such as irregular expenditure. 

"SNG conducted an independent audit taking into account their standard operating procedures without interference from Denel management. All information and accounting records were made available to SNG in order to conduct the audit during the period starting in February 2017 to July 2017", says Denel. 

Denel fights off the proposed request to change the report, stating that unless there is a material event which occurred during the audit that was not disclosed with SNG and had been brought up after the signing of the audit report, then there would be basis for change. 

The current debacle between Denel and SNG has been called out at the Annual General Meeting (AGM) on August 25 this year, whereby the defense technology company and auditing firm were requested to 'resolve their differences'. 

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- BUSINESS REPORT ONLINE