Transcript 2014 Sri Lanka ROSC A&A Meeting With Development Partners January 29, 2014 Objective • Supporting Sri Lanka’s growth by – improving the investment climate (ROSC.

2014 Sri Lanka ROSC A&A
Meeting With Development
Partners
January 29, 2014
Objective
• Supporting Sri Lanka’s growth by
– improving the investment climate (ROSC & )
• Strengthening private sector transparency and
accountability
• Strengthening regulators
– strengthening the public sector
– Supporting structural shifts in the economy
and social inclusion
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World Bank Support
Strengthening
Corporate Reporting
Strengthening the
Public Sector
ROSC 2014
PEFA Assessment
IFRS Roll Out
Public Sector Accounting
Standards (IPSAS)
SMP Training
Professionalising Public
Sector Accountants
Audit Quality Assurance
Support to Auditor General
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Outline….
About the ROSC A&A Programme
Sri Lanka ROSC
Accounting & Auditing Profession
Way Forward
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Reminder of approach.diagnostic to capacity building
Emerging issues
2004 Policy recommendations
Statutory
Framework
Education &
Training
WHY
Accountancy
Profession &
Ethics
Reforms to strengthen
– systemic issues
Accounting
Standards
Auditing
Standards
Monitoring,
Enforcement
& Oversight
Diagnostic questionnaire
and due diligence
Bank-Fund Joint Initiative on Standards & Codes
Twelve Standards and Codes – financial stability
Macroeconomic policy and data transparency
1. Data Transparency
2. Fiscal Transparency
3. Monetary and Financial Policy Transparency
Financial Sector Regulation & Supervision
4. Banking Supervision
5. Securities Regulation
6. Insurance Supervision
7. Payments Systems
8. Anti-money laundering
Market Integrity – institutional and market infrastructure
9. Accounting
10. Auditing
11. Corporate Governance
12. Insolvency and Creditor Rights
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Identify priority areas in A&A
Institutional
Framework
underpinning
Corporate
Reporting
Comparison of
Accounting &
Auditing
Standards
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Laws and regulations for SBEs/SOEs/SMEs,
SMO for PAOs,
Codes,
Standard setting processes,
monitoring mechanisms,
accounting education
• Benchmarking with IFRS and ISA
Actual Reporting &
Auditing Practices
• Independent review of a sample covering listed
companies, SOEs and other SBEs including Banks
and insurance cos,
• review regulators processes and results
Stakeholder needs
and perceptions
on quality of
corporate
reporting
• Capital market development
• Access to finance for SMEs
• Oversight of SOEs that are SBEs
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Global
IASB
(Financial
Reporting
Standard
Setter)
Sri Lanka
SLAASMB
CBSL
(Bank and NBFI)
IFAC
(Auditing,
Ethics,
Education,
Public Sector
Standard Setter
and apex body
for PAOs)
120,000 students
13,000 members
Profession
SEC & CSE
CASL
Registrar of
Companies
Standard
Setter for
A&A
Other Local
Bodies
AATSL / CMA
Global
Accounting
Bodies
CIMA/ ACCA/
CFA
State &
Foreign
Universities
IBSL
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Promulgate
Accounting &
Auditing Standards
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Provide Accounting
Qualifications
• Has a portfolio of qualifications including the CA qualification
• Key player in tertiary education recruiting approx 8000 students
annually. Approx 40,000 registered students.
• Effective inclusion of provinces and minimise disparities
• Monitor training and adapt to changing employer requirements
Set Standards for
Members
Global Integration
of the Profession
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Key to development of capital markets
SLFRS now compatible with IFRS BV 2013
SLAS are compatible with ISA 2009
Obligation to facilitate adoption of global standards
Compliance with IFAC SMOs Issues practising certificates for auditors
CPD
Audit quality assurance (SLSQC 1)
Code of Ethics
• Currently holds Presidency of CAPA and SAFA
• Influence global standards setting process
• Influence regional adoption of global standards
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Regulatory Milestones
ROSC 2004
RII Act No,23 of
2011
Companies Act No 7 of
2007
Finance Business Act No
42 of 2012
Amendments to
Banking Act and
issue of directions
Convergence to
SLFRS 2012
ROSC 2014
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Key Milestones
Convergence
with IFRS
• Currently complies with BV 2013
• Issues with valuations
• New skills required to implement
and monitor consistent
implementation of SLFRS
• Dual Reporting – CBSL & Inland
Revenue
• Challenges with SMEs
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Key Milestones
Audit
• Currently complies
with 2009 ISAs
• Audit quality
assurance
• Registered Auditors
• Challenges with SMPs
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Key Milestones
BPO
Sector
• Employs over 60,000 Sri Lankans in
300 + companies
• US$ 471 mn in 2013
• FAO is 1/5 Cetrnes of Excellence
• Broad spectrum of work with a growing
emphasis on high end work
• Talent pool of 120,000 + accounting
students is a key attraction
• 25% of A/L students do commerce and
this is expected to increase to 35%
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Regulators
• CBSL (Bank and NBFI),
IBSL, SEC and CSE
have all increased
capacity and increased
regulation.
• Changing needs as goal
posts shift
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Key Milestones
Growth of
the
Profession
• Contributes to the growth of a
knowledge hub
• Growth of profession is mainly
Colombo centric
• Qualification framework is not in
place
• Standard setting process needs
to recognise new professional
bodies
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2004 ROSC Recommendations
• Mandate use of IFRS
without modification
• Issue guidance for
uniform application of
IFRS
• Strengthen
enforcement
mechanisms
• Strengthen capacity of
regulators
• Wider public
availability and
enforcement
• Disclosure of nonaudit fees
Implemented
6/14
• Co-ordination amongst
regulators
• Upgrade licensing
procedures for
accountants/auditors
in public practice
• Strengthen CASL
capacity
• Improve professional
education/training at
CASL
• Improve academic
accounting curriculum
and teaching
• Mandatory CPE
Partially
Implemented
• Legal reforms for
independent oversight
of auditing profession
by SLAASMB
• Introduce an
awareness program
for improving the
degree of compliance
with accounting
requirements by
specified business
enterprises.
Not
Implemented
2/14
6/14
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Promote country’s economic growth through capital markets development, public
sectors financial management, and a skilled work force
Provincial development and effective social inclusion
Modernise to meet employer requirements
Effective and efficient performance
Strengthening CASL
Enhance
Public Sector
Financial
Management
Capital
Markets
Development
Provincial
Development
& Effective
Inclusion
Institutional
Capacity
Building
Better Public Sector Financial Management
Paving the way for IPSAS/SLPSAS Implementation
Public Sector Proposals
Improve
knowledge
of IPSAS
within Public
Sector
Assess and
benchmark
knowledge
and
application
of IPSAS
CASL/CIPFA
Joint
Qualification
Provide
resources for
Public Sector
Finance
professionals
CPD
Improve Risk
Management
in PS
Skilled  High Performing 
Capital Markets development
Capital Markets Development
Proposals
Strengthen
CASL
policy
advocacy
role locally
and
globally
Improve
CG in line
with global
developme
nts
Improve
Risk
Manageme
nt Practices
within
companies
Skilled
Implement
Audi
Quality
Assurance
programme
High Performing
Improve
Corporate
Reporting
Facilitate
effective
implementa
tion of IFRS
and reduce
variability in
interpretatio
n
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Inclusion of provinces for sustainable economic growth
Improved access to finance for SME`s through better accounting and financial reporting
Provincial Development
& Effective Inclusion
Reduce
disparity in
facilities for
students/
members in
provinces
Develop
SMEs &
SMPs
Provide
alternate
career paths
to cater to
employer
requirement
s
Skilled
High Performing
Improve
Professional
Education &
Training
IT
Infrastructur
e
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Enable scalability of solutions
Provincial development and effective inclusion
Modernise to meet employer requirements
Effective and efficient performance
ROSC 62
Institutional Capacity Building
Effective
implementation of
strategy and
compliance with
IFAC membership
obligations
Examination
process to be
relevant to current
employer
requirements and
in line with IFAC
membership
obligations
A modern
Financial Training
Centre for the sub
continent of South
Asia and a venue
for public and
private sector with
capability to link
globally
Campaigns to
educate public on
matters necessary
for progress of the
profession
Q&A
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Thank You
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