World Bank boost for CA Sri Lanka

The World Bank has extended a grant of $ 500,000 to the Institute of Chartered Accountants of Sri Lanka aimed at enhancing the core technical activities of the Institute.

The grant channelled through the bank’s Institutional Development Fund (IDF) will cover the implementation of an audit quality assurance programme, an initiative to assist and educate small and medium sized practices, a programme to increase awareness and adoption of the International Financial Reporting Standards (IFRS) and to help the adoption of Sri Lanka Public Sector Accounting Standards (SLPAS).

Underscoring the importance of this grant, CA Sri Lanka President Sujeewa Rajapakse addressing the gathering at the official announcement of the grant earlier this week emphasised that the grant supports activities aimed at improving transparency and accountability by strengthening corporate and public sector governance.

“Improving transparency and accountability are critical to improving the investment climate, building investor confidence and strengthening corporate and public sector governance. The IDF grant supports activities aimed at achieving these results through strengthening financial reporting and auditing standards and practices,” he stated.

While highlighting the significance of small and medium enterprises in the growth of the country’s economy, Rajapakse noted that the World Bank grant will help improve the quality of SME audits by strengthening the skills and competencies of small and medium audit practitioners who primarily carry out audits of SMEs. He added that every necessary step will be taken to strengthen the financial reporting of SMEs by improving the awareness and skills in IFRS for SMEs among SME accountants.

“It is really important to understand how important accounting is for the growth agenda of Sri Lanka and Sri Lanka needs to improve transparency and accountability in order to continue to attract FDI as transparency policies are the cornerstone of the spurt of growth that the country is aiming to have. The proper implementation of these standards at all levels will inspire great confidence and act as insurance for investors,” said the World Bank Director Operations Services and Quality, South Asia Region Onno Ruhl.

Ruhl pointed out that Sri Lanka has been leading by example in the South Asian region through its ability to introduce modern financial systems and practices in both the private and public sectors. CA Sri Lanka is now taking these efforts to a higher level by enabling the adoption of international standards and practices in accounting and auditing.

He added that the World Bank is very happy to support this excellent initiative and that the outcomes of this IDF grant will make a significant contribution to the growth and development of Sri Lanka.The grant will also support CA Sri Lanka’s initiative to develop the country’s public sector accounting standards aligned with the International Public Sector Accounting Standards in public sector organisations in Sri Lanka. Furthermore, it will enhance the Institute’s efforts to strengthen the quality of financial reporting of state-owned enterprises through the adoption of IFRSs and SLPASs.

The World Bank has been continuously engaged with the professional accounting and auditing organisations in Sri Lanka. The World Bank carried out the ROSC A&A (Report on Standards and Codes Accounting and Auditing) diagnostic assessment in 2004 that provided a list of policy options for the GOSL regarding the capacity building of the accounting and auditing profession.  The ROSC report enabled the Government, as well as the professional accounting and auditing bodies in Sri Lanka, to take a holistic view of the requirements of the profession and the nature and extent of capacity building required for enabling the profession to meet the increasing demands from a growing economy. The present IDF grant is to implement some of the key recommendations from the ROSC report and will therefore provide a further impetus to the growth of the private sector in Sri Lanka.

Pix by Upul Abayasekara