Islamabad: The independent audit report for the AWT Financial Sector Income Fund highlights crucial issues regarding the valuation and existence of investments. As of June 30, 2024, the Fund reported investments totaling Rs. 157.24 million. Despite the substantial investment balance, the audit raised concerns over their valuation accuracy.

According to information available from the Pakistan Stock Exchange (PSX), the audit, conducted in compliance with International Standards on Auditing (ISAs) as applicable in Pakistan, emphasizes that while the financial statements provide a true and fair view of the fund's position as of June 30, 2024, there are significant concerns related to the reported investments. These include the main driver of the Fund’s performance due to risks associated with the valuation of government securities and private debt instruments. These assets are crucial as they constitute a major part of the fund's asset balance, which is fundamental to its performance assessment.

The auditors' focus was especially directed towards verifying the existence and valuation processes of these investments. They reviewed the design and implementation of internal controls and independently verified the existence of these assets from the investor Portfolio Services (IPS) account statements and directly from issuing agents for unlisted short-term sukuks.

However, the audit report also mentions that there are risks that these investments might be incorrectly valued. This potential misvaluation introduces uncertainty into the financial statements, particularly regarding the ownership of recorded investments at the year's end.

Regarding the responsibilities of the management and board of directors of the Management Company, they are tasked with the fair presentation of the financial statements, ensuring the adoption of appropriate accounting and reporting standards. The management also bears the responsibility for assessing the fund's ability to continue as a going concern.

This audit underscores the importance of rigorous internal controls and transparent reporting practices to maintain investor confidence and ensure compliance with financial regulations.