SME and large company finances should come under same laws: expert

8 October 2015 03:27 am - 0 - {{hitsCtrl.values.hits}}

A A A

By Chandeepa Wettasinghe

Small and medium enterprise (SME) finances should come under the same laws governing larger companies, the head of the global body for professional accountants told Mirror Business during a brief interview in Colombo.

“As far as the law is concerned, the income tax law, the company law, there is no difference. Compliance is mandatory. You need to do tax returns; you need to do company returns. You need to be audited,” ACCA Global President Datuk Alexandra Chin said, citing Malaysia as an example.

She noted that in most of the countries, there are no audit exemptions for any company.

“I think even in Sri Lanka, all the private limited companies need to be audited,” she stressed.

Over 90 percent of companies in Sri Lanka are SMEs. Many are sole proprietorships.

A recent World Bank study said that 96 percent of Sri Lankan SMEs are using registered auditors who help the SMEs evade taxes in return for a fee greater than the tax, due to lack of awareness among SMEs.

“Basically, for any businesses, I would still say, that it pays to go to a professional accountant. We’re trained. We have the competence. You may get away with what you’re doing, but eventually, the law will catch up with you,” Chin said.

She noted that in Malaysia, such practices had happened in the past, but have now faded away as the SMEs realized that having professionally audited accounts help businesses expand faster through easily obtained credit.

“Business people need to be more aware. They don’t know the difference between competent accountants compared to somebody who is an unlicensed accountant. Awareness has to come in,” she said.

She said that in Malaysia, the government takes the initiative in helping SMEs.

“This has made the government come in and subsidize the training for the accountants, so that the accountants can help SMEs. If there are new accounting practices coming in next year, the government subsidizes the training,” she added.

However, she said that the regulations within the laws could be differentiated to make lives easier for SMEs.

“As far as accounting standards go, IFRS (International Financial Regulation Standards) is for the big boys and we have a simpler set for SMEs. So it’s easier and less time-consuming,” she said.

Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

Comments - 0

Add comment
Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

SME and large company finances should come under same laws: expert

Comments - 0

Add comment

RECOMMENDED

‘Spike in blast fishing’ poses renewed threats to Sri Lanka’s marine ecosystems

UDA owned land in Thalawathugoda; UDA Minister Prasanna Ranatunga under the spotlight for forceful occupation of reserved land

Loss-making SMIB faces political pressure in recovering loans

Baltimore Bridge Collapse: MV Dali, SL authorities anchored in mystery?

Has Sri Lanka become a potential hub for the illegal wildlife trade?

Spotlight on Moragahakanda Development Project Moragolla villagers lose livelihoods and down to one meal a day

Ambitious Sri Lankan jobseekers ‘trafficked into Ukraine war zones’

Most Viewed in News

Controversy over foreigners issuing on-arrival visas at BIA

AstraZeneca admits for first time its COVID vaccine can cause rare side effect

Sri Lanka face unusual dilemma

VFS Global is here to stay for at least 12 years, says Tiran

On-arrival visa fiasco drains VFS Global’s confidence in Sri Lanka

“Ranil Ralla” : Will Wickremesinghe ride on a winning wave?

MIRROR CRICKET

TODAY'S HEADLINES