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We can become a breakout nation: CA Sri Lanka chief

14 Feb 2014 - {{hitsCtrl.values.hits}}

The financial and accounting framework and infrastructure in place in this country is best in class, providing the platform to effectively interact and integrate with the rest of the world in terms of trade and investment

Following is the inaugural speech by Arjuna Herath as President of the Institute of Chartered Accountants of Sri Lanka, delivered at the 22nd President’s Induction ceremony of the Institute held at Cinnamon Grand Colombo.

It is with a sense of nostalgia that I look back at my career of 23 years as a Chartered Accountant leading to this coveted position to lead the accounting professionals in this country. I am humbled by this thought. I accept this position with an overwhelming sense of humility and modesty. And with the pledge and promise to do my utmost to add value to the accountancy and finance profession in this country. And through this process the Institute of Chartered Accountants of Sri Lanka to be a catalyst in the development and growth of this country and for our people to reap the benefits of the tremendous potential our island nation has to offer.

I consider it a great privilege to lead our great institute that has achieved prestige and preeminence in relation to the field of accounting and finance in this country. This Institute has been built on the hard work, commitment and continuous contribution of all the past presidents, council members, our valued members, and the staff of the institute. There are many who have walked through the pillars of this great institute in the 55 years of its existence some of whom are not with us today but their contribution is much revered.

Breakout nation
Today, the world has become more closely integrated, and there are many challenges arising from the volatility of socio economic conditions faced by us.
We believe our nation sharing one common vision bonded by strong camaraderie and partnership can forge ahead surmounting all challenges to become a breakout nation. We are encouraged and motivated by the courage, boldness and the vision of our leaders in pursuing aspirations of the people. In this pursuit CA Sri Lanka is committed to proactively play its role to bring about a transformation in the private and public sectors and the entire society at large. We are determined to effectively partner all stakeholders to achieve this.

Best in class accounting /financial infrastructure
CA Sri Lanka has played its role in laying the foundation for a sound accounting and financial infrastructure in the country. The financial and accounting framework and infrastructure in place in this country is best in class, providing the platform to effectively interact and integrate with the rest of the world in terms of trade and investment. There are numerous initiatives we have embarked on and we will continue to innovate.

I must emphasize that these are remarkable achievements that match some of the reputed countries for best accounting and financial framework and infrastructure in the world.

Institute of international repute
Our achievements have inspired the international community and we have gained much recognition amongst them. Today we are one of the most progressive and influential members of the International Federation of Accountants having some of our members in very important committees of the IFAC.

We have been recognized for leadership positions in International Fora and today lead the Confederation of Asia Pacific Accountants as its President and in South Asian Federation of Accountants as its Vice President providing the opportunity for Sri Lanka to lead the Accounting and Finance professionals in the Asia Pacific region. CA Sri Lanka is recognized by international accounting professional organizations as world class. The Institute of Chartered Accountants of England and Wales and CPA Australia through mutual recognition treaties have recognized our members to be suitable to obtain membership of their respective professional bodies.

There are many other institutes that recognize our qualification and members, which are to be formalized during the term of the new council. We believe that our country is very fortunate to have a very a strong institute of international repute that will be a very significant catalyst in its march towards becoming a break-out nation.
As a result many of our members are internationally mobile and we have a significant presence in many overseas countries.

We have CA Sri Lanka chapters in few countries enabling professional development and social interaction among our overseas members, and positioning Sri Lanka in the world arena and facilitating trade and investments with those countries.

New professional qualification
Sri Lanka is known to produce accountants of exceptional ability of international standing having the capacity to serve not only the domestic market but international markets as well. This is one of the key attributes as to why our country is a preferred destination for the BPO industry. In order to actively support the country to realize this vision of being the best outsourcing destination in the world, CA Sri Lanka has embarked on a journey with the active participation of the industry body SLASCOM and the government policy making arm in this area 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. In this process we will recognize and reward, people and the corporate entities in the BPO industry in addition to building capacity within the industry.

Progressive profession
Our profession has been very progressive and has stayed very current and relevant in this fast changing complex world. We will continuously involve all our stakeholders including industry and society in the evolutionary journey of transforming us to be a key player in the progress of society, and 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.

Revolutionary curriculum
We will very soon announce a new revolutionary curriculum that will produce our 2020 Chartered Accountant. This new curriculum meets with all the required International Standards and we believe it will meet the aspirations of all our stakeholders which include our students, their employers and industry and commerce at large as we have gone through an extensive consultation process locally as well internationally.

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 we believe will ensure that the CA qualification will be the most sought after qualification for a business leader.

Impetus to regional growth
As mentioned at the outset we wish to ensure that our members play a pivotal role in the growth and development of this country. If this country is to prosper, regions outside Colombo needs to quickly gear themselves to become very active economic centers.

Whilst government is doing their part in establishing super connectivity between cities through a great network of road infrastructure and air transport whilst providing other infrastructure requirements, we see the lack of trained human resources in these locations as a significant limitation that will arise for regional growth.

In order to overcome this we will ensure that our students and the students of our 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. When this happens we will produce accounting and finance professionals that will live and work in those locations facilitating others to do the same, enabling the required skills to be available in the regions.

Efficient 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 the Financial Reporting Standards more easily so that application of them will be more efficient and effective and to reach the desired outcomes more productively.

We will continue to revisit and review these standards with a view to provide guidelines and directions to implement them. In order to achieve this we have ensured the diversity in the composition of the standards setting board to include representation from all stakeholders in this process and their active participation.

We have also formed a Financial Reporting Standards implementation task force to formulate guidelines in relation to implementation of SLFRS and in relation to issues that arise at the implementation stage. We will also launch soon a SLFRS certification program to build proficiency and capacity in this area within the profession and industry.

Accounting standard for micro enterprises
In this process we have ensured that the financial reporting burden on smaller and non-listed entities will be limited, by introducing a separate accounting standard for the SME sector. In order ensure that the smallest of the smaller entities too would be able to effectively participate in the financial reporting process and for them to reap the benefit of accounting standards without much burden and hassle we will soon introduce an accounting standard for the micro enterprises. 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 to cope with the requirements.

Shared Service Centre for SMPs
In this regard, we will 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 center for some of the back office services required by the Small and Medium Practices of our members to enable provision of effective services to their clients.

Consolidation among SMPs
Audit environments have become very complex while the expectations from audit have become very demanding. Therefore, we believe consolidation among the Small and Medium Practices and twining arrangements between Small and Medium Practice firms and the larger firms| can add significant value to improve the viability and feasibility of performing effective audits.

Hence, we will encourage consolidation and twining arrangements among firms in relation to audits whilst practitioners could continue with other areas of practice as usual.

Public interest and audit quality assurance
We are conscious of the role that the financial auditors play in serving the public interest. The confidence in the audit profession is fundamental to instill the confidence in the credibility of financial reporting. The trend clearly indicates that the audit environment is getting more complex by the day. Therefore enhancing quality of audits is a must and will continue to be one of our primary focus areas.

The independent Audit Quality Assurance Board that was set-up very recently, which commenced its reviews recently, will ensure continuous maintenance of international audit standards and continuous improvements in audit quality by practicing firms.

Objectivity and audit relevance
We will continue to examine objectively the relevance of audit and the value it provides. We 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 an ‘auditor commentary’ in the auditor’s report as opposed to the standard opinion that is currently provided which possibly is not read by anyone. 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 these matters.

Support for registered auditors
We also wish to take a role to support the registered auditors, who are licensed by the Registrar of Companies and not our members. We have initiated a dialogue with the policy makers to prepare the necessary framework for this.

Directors' training programme
The institute continues to play a very important role in facilitating adoption of best practices in Corporate Governance, Risk, and Control. We have just put out the latest corporate governance code jointly with the Securities and Exchange Commission.

We have realized 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 the Directors. The Directors Training programme which will be launched during the 1st quarter of 2014 together with the SEC is an initiative towards this. The objective of this programme is to ensure all directors of listed companies are familiar with what is expected of them as Directors and have the capacity to effectively fulfill their role.

Leadership to professional community
We wish to give leadership to all the accounting and financial professionals in this country irrespective of whether they are our members or not. We will open the membership of our faculties to the entire accounting and finance fraternity in this country. We will work closely with all other accounting bodies in the country inviting them to revolve around us to ensure that accounting and finance professionals fulfil the aspirations our country has from the Accounting and Finance professional community.

New qualification for public sector
We are conscious of the critical anchor role that the public sector plays in the economic development and progress of the country. We have embraced the accounting and finance professionals working in the public sector as part of CA Sri Lanka and we are very committed to add value and nurture them. We will soon announce the Chartered Accountant equivalent qualification supported by CIPFA of United Kingdom for anyone who wish to specialize in public sector accounting and finance.

Leadership in value creation
CA Sri Lanka is committed and passionate to play the role of a valued leader in the development of strong and sustainable organizations, financial market, and economy. A role that the members of the institute have been playing since its inception though the society may have not realized it.

This is evident even in the current context if you see the number of chartered accountants as Directors and CEOs of companies, the 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 and the list is endless.

This is an unrivaled accomplishment by a profession in this country that we are proud of. We will continue play this very significant role, and in order further expand this role we will form partnerships and close alliances with all key players in the economy to achieve the vision we have for our country.

In this context it is significant that we have with us two very important guests to grace this occasion in Mr. Ajith Nivard Cabraal, the Governor of the Central Bank of Sri Lanka who is one of our own distinguished members and a Past President of the Institute and Mr. Warren Allen, the President of the International Federation of Accountants to share their thoughts, words of wisdom and good wishes on a journey that I start today to fulfill the aspirations of all our stakeholders.

Mr. Warren Allen’s visit to Sri Lanka to grace this occasion and to speak to the professional accountants and the industry leaders in this country is a testimony of our standing among the international community and a recognition of the accounting and finance professionals in the country and of the country itself. Both Mr. Cabraal and Mr. Allen have been very supportive of the institute and personally to me and it is with much gratitude and appreciation that I thank Mr. Cabraal and Mr. Allen for accepting our invitation and being present here today and for all the support extended to the institute.

Thank you my dear friend and the immediate past President Sujeewa Rajapakse for striking an excellent partnership with me during the last two years in the forward march of the institute and for his kind words today in relation to my election as the new President of the Institute.

It is with much gratitude that I acknowledge the support I received from the Past Presidents, Council Members, all members of the Institute, the CEO of the Institute Aruna Alwis, and the past and the present staff of the Institute in my journey to be the President of the Institute. I am fortunate to have the expertise and the experience of my very competent fellow council members and I begin my journey today with the comforting thought that I will enjoy the company and support of a remarkable team.
It is with deep sense of appreciation that I acknowledge the presence of the large number of distinguished guests present on this occasion including the President of the South Asian Federation of Accountants and President of the Institute of Chartered Accountants of India Subodh Kumar Agrawal, The Presidents of the Institute of Chartered Accountants of Bangladesh, Pakistan, and Nepal, and The Presidents of the Institutes of Cost and Management Accountants of India, Pakistan, Bangladesh, and Nepal and the many representatives from foreign institutes present here today all of whom are here today to accord me the recognition and to express solidarity with our institute to strengthen the accounting and finance profession across the region and the globe. I also wish to acknowledge the presence of our own member and the President of the Confederation of Asia Pacific Accountants Sujeewa Mudalige and its CEO Brian Blood.

In conclusion, I am here today as the President of the Institute of Chartered Accountants only to serve all the stakeholders and add value to the Institute. My door is open to all to discuss ideas and thoughts in this direction and be partners in progress. There is no doubt that we will be stronger together.

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We can become a breakout nation: CA Sri Lanka chief

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