Audit wrongly states ISP earnings as 32c

ISP Finance earned $40 million for 2016 or earnings per share of 46 cents based on an average of 87 million shares in issue for the year, but the audited statement reported only 32 cents based on a non-existence average of 126.5 million.
The company only issued 105 million shares hence it is not possible for the average to be greater.
The above error along with glaring errors elsewhere in the financial system at large raise the question about the investing public being adequately protected, in spite of regulators in place to do police the system?
Auditors are required to use care and due diligence in undertaking their duties to ensure that the companies they audit maintain proper records that will give a fair view of a company’s profit and financial position. Users of audited statement is not expected to see glaring errors in them. It raises questions about the quality of the audit and the management of the company as well.
Knutsford Express’ audited reports for 2014 and 2015, were filled with errors or questionable treatment of transactions, raising questions about the accuracy of the entire reports.
The earnings per share for 2014 was overstated due to inaccurate computation of the average number of shares issued in 2013, while showing earnings per share of $1.07 for 2014. The income statement erroneously stated by way of note, that “using the weighted average number of shares at end of 2015 would result in earnings being 50 cents for 2014.” Since no new share were issued in 2015 there can be no there is no need for a computation of an average and there can be no change to the earnings for 2014 if the correct average was computed for 2014 in the first place.
The report had further stated “During January 2014, the company raised additional capital of $99,862,700 from its initial public offering of 99,999,003 shares for its enlistment on the Jamaica Stock Exchange Junior Market”. The company in fact issued 26 million bonus shares in 2013 while the public offering was for 20,000,000 ordinary shares, only 4,867,338 new shares were offered by the company while 15,132,662 shares existing shares were sold to the public in the IPO by shareholders. At the time the IPO, 95,132,662 ordinary shares were already issued, the average number of shares should be approximately 60 million rather than 46.8 million used to compute the 2014 EPS, which would have worked out around 83 cents.
According to ISP Finance prospectus, 1n January 2007 the company was incorporated with an authorised share capital of 10,000 ordinary shares at J$1 per share. In June 2007 the company’s authorised share capital was increased to 5,000,000 ordinary shares with all being subscribed for at $1 each.
On February 11, 2016 the company’s authorised share capital was increased to 105,000,000 ordinary shares. Of the 100,000,000 ordinary share increase, 51,017,500 shares were allotted to Gencorp Limited at J$2 per each being the same price at which shares were offered in the IPO. Of the balance just over 48.98 million units were offered to the general public in the IPO.