"Questions over basis of new Sri Lankan accounting body"

The Institute of Certified Public Accountants (ICPA) has sent a response to last week's report in the Business Times headlined ""Questions over basis of new Sri Lankan accounting body" which raised issues over the ICPA formation.

Extracts from the response:

The council members of the ICPA comprise: Prof. B. L. Panditharatne, Former Vice Chancellor, University of Peradeniya; Prof. A. D. V. de S. Indraratne, Former President - Organisation of Professional Associations; Rienzie T Wijetilleke, Former Chairman Hatton National Bank; M V Theagarajah, Former Chairman of the Browns Group of Companies; Daya Jayasinghe, Former Senior Partner Chevette Global & Co, London and Founder Chairman and Managing Director, Imperial Institute of Higher Education; Manoharan Ramanathan Chartered Certified Accountant; M. Thiyagaraja, Chartered Accountant and Chartered Management Accountant; H M Saliya Dharmawardane, Former Chief Accountant, Ministry Internal Trade & Cooperatives; Major P. S. Jayantha Ratnayake; and Zahid Musafer - Lecturer in Accounting and Finance. The ICPA educational programme places emphasis on the development of the skills necessary to succeed in the modern business environment: these include computing, economics, management mathematics, behavioural sciences, research, development and analytical skills. These are introduced from the outset and then developed through the rest of the course. For this reason the Council has three non-accountants who are all distinguished professionals Three of the Council members, Prof. Panditharatne, Prof. Indraratne and Daya Jayasinghe, are from the top 20 universities in the world and guarantee to maintain the highest quality and standards of the programme. The Institute of Chartered Public Accountants (ICPA) was incorporated on 13 June 2003 under the Companies Act, Number 17 of 1982, pursuant to section 21, and re-registered under the Companies Act, Number 7 of 2007. On its commencement of business, the Institute of Chartered Accountants of Sri Lanka (ICASL) sought a permanent injunction against its operation.

Subsequently on 3 August 2009 both parties entered into a settlement before Justice Sampath Wijeratne at the District Court of Colombo.

In accordance with that agreement, ICPA agreed not to use the term 'chartered' in its name and to change its name to the Institute of Certified Public Accountants and to continue with its operation. The ICASL had no objection to the change of name to the Institute of Certified Public Accountants. Accordingly, the ICPA is absolutely free to conduct its activities as set out in its memorandum and articles. On November 8, 20011 a bill to incorporate the ICPA by an Act of Parliament was presented by Ms Sriyani Wijewickrama, MP to incorporate the ICPA by an Act of Parliament.

The Bill was referred by Parliament to the Ministry of Finance and Planning for observations and reports. On June 8, 2012 the second reading of the Bill to incorporate this body was taken up and a Parliamentary Standing Committee was appointed.

- Our position is that there is a severe shortage of supply (ofaccountants). Existing education and training arrangements of local accountancy bodies are totally inadequate to meet the public and private sector agenda of accounting manpower requirements.

- Medium and small companies are facing difficulties in finding suitable accountancy staff to maintain proper accounts and auditors to audit their annual accounts resulting in non-payment, or delayed payment of taxes and other dues to the Government.

- As the economy grows, the number of business establishments will increase, requiring more accountants and auditors to set up books, prepare taxes, and provide management advice.

- The ICPA provides members with an internationally reputed and recognised qualification, equal to the best international standard, and opens the doors to many exciting and rewarding possibilities. It is a value added qualification which commands higher pay in many parts of the world than any other accountancy qualification. Holders of an ICPA qualification will be able to secure jobs in any part of the world.

- Only around 50% of the qualified accountants are currently supplied by ICASL and CMASL: Even in the current severe short supply, ICASL and CMASL supply only around 50%. Others are fighting hard to keep in foreign institutions and keep out the ICPA which is a national professional institute dedicated to the promotion of the highest accounting, finance, auditing and ethical standards and is committed to play a major role in human resource development in Sri Lanka

- Around 50% of auditors are outside the control of ICASL. There are 2050 registered auditors, of which around 2000 are in active practice. ICASL hardly can claim to the sole ownership of auditing profession in Sri Lanka.

- Evolution of national systems: having realised that British

principles and systems are wholly inappropriate for the entirely different social and economic environment of their countries, many countries in the world broke away from the British systems in favour of bespoke systems for their own requirements. From USA through Europe, Middle East, part of South East Asia, Africa to the Far East, including China all operate accountancy institutions evolved according to the social, economic and political needs of their countries. The vast majority of them operate under the name of "Institute of Certified Public Accountants".

- Most countries in the world have ICPAs: Many countries in the world including almost all commonwealth countries have an Institute of Certified Public Accountants.

- Public sector accountants: The public sector accountants are left without an internationally recognised/identifiable accountancy qualification. The ICPA offers them the opportunity to specialise in public sector accounting by taking the relevant pathway which includes Public Finance and Public Policy.