Review of Unconsolidated Subsidiaries of Malawi Listed Companies

Group of companies usually have significant wealth and influence in any given economy and one of the requirements to monitor their activities is through requirement to produce group accounts as dictated by statutory provisions such as the Companies Act and relevant accounting standards. This is a case study of one of the listed companies on the Malawi Stock Exchange which had unconsolidated subsidiaries between 2009 and 2019 as they were wrongly classified as associates and subjected to wrong accounting standard. This resulted in material misstatement of the financial statements. It was also later discovered of double counting as the investees were treated as investments under IFRS 9 but at the same time accounted for using equity method as well. The study recommends that directors should take active role to reduce misstatements