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Thursday, 23 January 2014 00:01 - - {{hitsCtrl.values.hits}}
By Cheranka Mendis
Charted Accountant Arjuna Herath on Tuesday assumed duties as the President of CA Sri Lanka, pledging to do his utmost to add value to the accountancy and finance profession in the country, helping people reap the benefits of the tremendous potential of Sri Lanka, as it continues its march towards becoming a breakout nation.
Declaring continued support for the Government in its development agenda, Herath assured that the body would play a proactive role to bring about a transformation in the private and public sectors and the entire society at large, by effectively reaching out to all stakeholders.
The world has now become more closely integrated, bringing forward many challenges due to the volatility of socio economic conditions. However, through a shared vision bonded by strong camaraderie and partnership, Sri Lanka can forge ahead surmounting all challenges to become a breakout nation, he said adding that he is encouraged and motivated by the courage, boldness and the vision of the leaders in pursuing aspirations of the people.
Bringing to table his experience as a charted accountant for 23 years, Herath reiterated the milestones achieved discussed by Outgoing President Sujeewa Rajapakse in his speech while listing out his plans for the next two years as President of CA Sri Lanka.
Herath is the 22nd President of the national body.
Best in class
Having played its role in laying the foundation for a sound accounting and financial infrastructure in the country, CA Sri Lanka will continue to innovate and provide for the profession in the coming years.
“The financial and accounting framework and infrastructure in place in this country is best in class. It provides a platform to effectively interact and integrate with the rest of the world in terms of trade and investment,” he said.
There are numerous initiatives the body has embarked on so far which will be continued over the years, with the necessary improvements and advances.
“These are remarkable achievements that match some of the reputed countries for best accounting and financial framework and infrastructure in the world,” Herath said commenting on the current system in place in the country.
Making an international mark
Achievements of CA Sri Lanka over the years have inspired the international community and as a result, it has gained much recognition among those in the market. Today Sri Lanka is considered one of the most progressive and influential members of the International Federation of Accountants (IFAC) having some of its members in very important committees of the IFAC.
“We have been recognised for leadership positions in international forums as well,” he said nothing that it is today leading the Confederation of Asia Pacific Accountants as its President and in South Asian Federation of Accountants as its Vice President – providing opportunity for Sri Lanka to lead the accounting and finance professionals in the Asia Pacific region.
CA Sri Lanka is recognised by international accounting professional organisations as ‘world class’ with the Institute of Chartered Accountants of England and Wales and CPA Australia accepting CA Sri Lanka members to be suitable to obtain membership of their respective professional bodies through mutual recognition treaties.
“There are many other institutes that recognise our qualification and members, which are to be formalised during the term of the new council.”
Many of its members are also internationally mobile and have a significant presence in many overseas countries. CA Sri Lanka chapters have been established in a few countries enabling professional development and social interaction among overseas members, while positioning Sri Lanka in the world arena and facilitating trade and investments with those countries.
New professional qualification for BPO industry
Sri Lanka is known as a preferred destination for the BPO industry.
In order to support the country in becoming the best outsourcing destination in the world, CA Sri Lanka has embarked on a journey with industry body SLASCOM and the government policy making arm ICTA, to create professionals with the right skills and knowledge specifically required for this industry.
“We will very soon announce the success of this initiative by launching a ‘Finance and Accounting Outsourcing industry specific’ qualification,” Herath said.
“In this process we will recognise and reward people and the corporate entities in the BPO industry in addition to building capacity within the industry.”
Nurturing skills of charted accountants
Acknowledging that the accounting profession has been very progressive and has stayed very current and relevant in this fast changing complex world, the newly elected President assured continuous involvement of all stakeholders (including industry and society) in the evolutionary journey of transformation to be a key player in the progression of society, as well as in the development and growth story of this country.
“In this context we have focused ourselves to take on board, on a priority basis the further development and nurturing of the intellectual, accounting and finance skills of our committed band of promising chartered accountants.”
A new revolutionary curriculum will soon be launched; he added which would cater to the 2020 chartered accountant.
“This new curriculum meets with all required international standards which we believe will meet the aspirations of all stakeholders which include students, their employers, and industry and commerce at large.” They have gone through an extensive consultation process locally as well internationally for the formulation of the new curriculum.
Herath noted: “This new curriculum will ensure that the 2020 chartered accountant becomes a true partner in business and will create value, enable value, preserve value and report value. This will ensure that CA qualification will be the most sought after qualification for a business leader.”
Reaching out to the regions outside central Colombo, CA Sri Lanka is looking at ensuring all its students as well as students of its sister institute, Association of Accounting Technicians have the opportunity to study, obtain training, and qualify at the locations they live so that they will not need to migrate to Colombo.
This is done with the long term vision of catering to the regional growth envisioned by the Government.
Adoption of financial reporting standards
“We are committed to continuously focus on improving the quality of financial reporting and auditing, in the light of lessons that we learn on an ongoing basis in implementing financial reporting standards and the auditing standards.”
This is paramount to be able to respond effectively to changes taking place in the economic and business environments.
Whilst we achieve this status we are conscious that all our stakeholders in this country should be able to understand financial reporting standards more easily so that application of them will be more efficient and effective to reach the desired outcomes more productively, he said.
CA Sri Lanka will continue to revisit and review these standards with a view to provide guidelines and directions to implement them. In order to achieve this, the body has ensured the diversity in the composition of the standards setting board to include representation from all stakeholders in this process.
They have also formed a Financial Reporting Standards Implementation Task Force to formulate guidelines in relation to implementation of SLFRS and to address issues that arise at the implementation stage.
A SLFRS certification program to build proficiency and capacity in this area within the profession and industry is to be introduced soon.
Helping SMEs and SMPs to strengthen accounting practices
Under the subject of accounting standards for micro enterprises, CA Sri Lanka has introduced a separate accounting standard for the SME sector, to limit the burden of financial reporting on smaller and non-listed entities of
An accounting standard for the micro enterprises will also be launched soon so that smaller entities would be able to effectively participate in the financial reporting process and reap benefit of accounting standards without much hassle.
“To ensure effective participation of these sectors in accurate financial reporting we will continue to build capacity within the sectors of SME and Small and Medium Practices (SMP) to cope with the requirements,” Herath outlined.
They will also seek to remove any real or perceived barriers that may exist for smaller firms. “Our members in practice will be supported with many tool kits and technology, and the institute will explore the possibility of facilitating the setting-up of a shared service centre for some of the back office services required by small and medium practices of our members.”
Audit environments have become very complex while the expectations from audit have become very demanding. Due to this, CA Sri Lanka will encourage consolidation and twining arrangements among firms in relation to audits whilst practitioners could continue with other areas of practice as usual.
“We believe consolidation among the SMPs, and twining arrangements between SMP firms and larger firms can add significant value to improve viability and feasibility of performing effective audits.”
Role in supporting financial and registered auditors
He continued: “We are conscious of the role that financial auditors play in serving the public interest.”
The confidence in the audit profession is fundamental to instil the confidence in the credibility of financial reporting. The trend clearly indicates that the audit environment is getting more complex by the day.
Enhancing quality of audits is therefore a must and will continue to be one of the body’s primary focus areas.
The independent Audit Quality Assurance Board that was set-up very recently, which commenced its reviews, will ensure continuous maintenance of international audit standards and continuous improvements in audit quality by practicing firms.
They will also continue to examine objectively the relevance of audit and the value it provides. Herath assured that they will consider the ever evolving role and relevance of audit through an open and robust dialogue with industry and commerce, investors and other capital market participants.
“In this context we are considering to include ‘auditor commentary’ in the auditor’s report as opposed to the standard opinion that is currently provided which possibly is not read by anyone.” According to plan, auditor commentary should require auditors to highlight matters that, in the auditor’s judgment, are likely to be most important to users’ understanding of the financial statements and draw attention to management’s disclosures on the said matters. “We also wish to take a role to support the registered auditors, who are licensed by the Registrar of Companies and not our members.” They have initiated a dialogue with policy makers to prepare the necessary framework for this, he said.
Facilitating best practice adoption
The institute continues to play a very important role in facilitating adoption of best practices in corporate governance, risk, and control, and only recently presented its latest corporate governance code jointly with the SEC.
“We have realised that if this code is to be effectively adopted there is a necessity for greater awareness, knowledge and skill imparted in relation to this among directors.” The directors training program which is to be launched during Q1 2014 together with the SEC is an initiative towards this.
The objective of this program is to ensure all directors of listed companies are familiar with what is expected of them as directors and have the capacity to effectively fulfil their role.
Going further, they also wish to give leadership to all accounting and financial professionals in this country irrespective of whether they are members of CA Sri Lanka or not.
Herath added that they will open the membership of CA Sri Lanka faculties to the entire accounting and finance fraternity in the country. In this regard, they will work closely with all other accounting bodies in the country inviting them to revolve around the national body to ensure accounting and finance professionals fulfil the aspirations of the country.
Supporting the public sector
“We are conscious of the critical anchor role that the public sector plays in the economic development and progress of the country,” he acknowledged. “We have embraced the accounting and finance professionals working in the public sector as part of CA Sri Lanka and are very committed to add value and nurture them.”
CA Sri Lanka will soon announce the chartered accountant equivalent qualification supported by CIPFA of United Kingdom for anyone who wishes to specialise in public sector accounting and finance.
Value creation
CA Sri Lanka is committed and passionate to play the role of a valued leader in the development of strong and sustainable organisations, financial market, and economy – a role that the members of the institute have been playing since its inception.
This is proven true in the current context by looking at the number of chartered accountants as directors and CEOs of companies, leadership of the Ceylon Chamber of Commerce, the number of chartered accountants as commissioners in regulatory bodies including the Governor of the Central Bank, the Director General of the Sri Lanka Accounting and Auditing Standards Monitoring Board, the Auditor General, Secretaries of Ministries, members in advisory boards to government, etc.
“This is an unrivalled accomplishment by a profession in this country that we are proud of. We will continue playing this very significant role, and to further expand this role, will form partnerships and close alliances with all key players in the economy.
Pix by Lasantha Kumara
