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News Image 51406 - New rules, guidelines in 2011 for Sri Lanak Accountants
Wednesday, 16 December 2009 - 8:06 AM SL Time - Some news pictures are worth a million words
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Sri Lanka`s accountants are gearing up to be compliant towards a `principles-based` set of standards that establish broad rules as well as dictating specific treatments by 2011.
This will be coming up following the adoption of the International Financial Reporting Standards (IFRS) for which the industry is expected to be currently readying comparative financial statements by 2010.
With Sri Lanka moving to IFRS from 2011 there is need for the systems and processes to be in place while the Chief Financial Officers (CFOs) area expected to have a complete understanding of the challenges and solutions foreseen in view of adoption of such standards by their European counterparts. The issues pertaining to the adoption and the key factors involved in the conversion towards IFRS.
Get Through Guides (GTG) CEO Vandana Saxena Poria OBE presenting the `Challenges in Implementing IFRS` said yesterday that both the `public and private sectors are increasingly recognising the benefits of having a commonly understood financial reporting framework supported by strong globally accepted standards.` She was speaking at the breakfast meeting organised by the Association of Chartered Certified Accountant (ACCA) and the Institute of Chartered Accountants of Sri Lanka (ICASL) in Colombo.
Generally Accepted Accounting Principles (GAAP) in Sri Lanka is another concern highlighted by the industry in converting towards the adoption of the new standards. But this has been dismissed as `numerous misunderstandings` in ascertaining the differences between the local GAAP and IFRS, Saxena pointed out.
The industry however, raised its concerns over the shift towards `fair value` as this would be met with certain challenges such as a lack of available risk free premiums while the need was felt for the business community to come up with some basic principles in the adoption of IFRS, Ernst and Young Country Managing Partner Asite Talwatte said.
In this respect ICASL is currently taking the lead and declaring of certain guidelines.
Entering unknown territory, KPMG Partner Reyaz Mihular observed there was a need to ensure `reliability` and asserted that the premiums must not fluctuate significantly on the other hand the industry would want greater consistency.
While there was an overall smooth adoption of the standards in the European countries, however, it was noted that almost all IFRS and interpretations raised issues for some companies. Saxena pointed out that not all countries adopted the standards though at the same time and this too posed as a concern.
The disclosures were not always very well carried out she noted adding that the national feel to accounts was however retained.
In Europe there were problems with the use of different words although principles seemed to be similar. The problematic standards were seen to occur in the areas which were previously not covered by national standards especially in financial instruments, Saxena observed.
`IFRS is very balance sheet driven. Some key things that we saw in Europe are the issue on redeemable preference shares.` As per IFRS, redeemable preference shares should be shown under the head long-term financial liability on the liability side.
`In this region it`s a potential issue,` Saxena pointed out adding that there was a greater use of fair values.
Companies will have to recognise the revenue recognition change and take into its understanding the split revenue following the after sales service and the extended credit.
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AussieBoy
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 16 Dec 2009 02:11:51 GMT Report for Abuse
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New rules, guidelines in 2011 for Sri Lanak Accountants
This committee meeting would be an exciting place to be! LOL! |
p007
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 16 Dec 2009 02:41:25 GMT Report for Abuse
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The Big Five Audit firms viz. Price Water House (PWC), Anderson Worldwide, KPMG, Ernst & Young and Deloitte Touche Tohmatsu have been involved in over 20 Accounting Scandals since 2000 and as late as this year, such as falsified accounts, overstating revenue and assets which led to the crashing of Dotcoms, Enron etc.
The IFRS couldn't stop these scandals. Even in Sri Lanka firms like Ernst & Young were involved in cooking up the books to facilitate the robbery in the name of 'Privatisation' during the short-lived UNP Administration of 2004.
So, how helpful will be adopting the IFRS in stopping the robber barons in Sri Lanka?
Edited By - p007 - 16 Dec 2009 02:42:55 GMT |
TRIBUNAL
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16 Dec 2009 03:09:43 GMT Report for Abuse
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Most of Accountants in Sri Lanka follow a course of Financial Reporting Standards before they passed the examinations.
Most of accountants are qualified under UK base Large Scale Accounting Institutions. The accountants qualified under UK base Accounting Associations and Accounting Institutions are knowledgeable of International Financial Reporting Standards.
Most of Accounting software available in the market are incorporated with the International Financial Reporting Standards.
Even locally qualified accountants will grasp these standards with no time.
I believe that Charted Accountants in Sri lanka is not second to any other Accounting bodies in the world. They are the sole authority in the country to implement such standards. I believe that Sri Lanka Institute of Charted Accountants are equipped with these standards.
I believe this gathering seen in the photograph is Accountants of Bank of Ceylon. I do not believe that this gathering is representing all accountants in the country. |
Saradial
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 16 Dec 2009 03:22:16 GMT Report for Abuse
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News Image 51406 - New rules, guidelines in 2011 for Sri Lanak Accountants
' Lanak ' ???
Is JARAWA included in the new equation? |
TRIBUNAL
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16 Dec 2009 03:24:21 GMT Report for Abuse
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Most of issues in balance sheet with regard to revenue and expenditure time determination is done according to the accounting basis in most develop countries.
I believe that Accrued and cash basis is mixed in most of Accounting in old fashion accounting reporting.
Redeemable preference shares can be considered as liability rather than share capital. It is a reasonable determination.
Redeemable preference shares has to be redeemed before any other shares at a time of liquidation of at it's redeemable maturity. IT looks more a liability than a share capital.
International Financial Reporting is based on the accounting equation where the financial report indiactes clear Equity of that particular business.
Focus is the equity so finance for Redeamable presference shares should be met at any given time.
Edited By - TRIBUNAL - 16 Dec 2009 03:31:01 GMT |
maharoof
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 16 Dec 2009 03:35:10 GMT Report for Abuse
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| Big Five are helping companies/banks commit frauds. By providing business advisory services and audit there is a conflict of interest. Both these must be done independently. As long as this independence is not created more frauds will be comitted. |
raigamakolla
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 16 Dec 2009 04:55:35 GMT Report for Abuse
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New rules for accountants.
New rules for politicians.
New rules for a nation.
Fresh start for a nation with hunger to do better and more.
SF is coming. |
p007
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16 Dec 2009 05:16:33 GMT Report for Abuse
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The bottom line is, Accounting and Auditing, is as much a business as any business is. That being the case, the fundamental business principle of holding onto the existing customers and attracting new customers by hook or by crook applies to the Accounting and Auditing business too. The primary concern of firms in this business is therefore to please their customers who are other businesses, corporate and non-corporate, at all costs. Hence, the huge Accounting Scandals, the likes of Enron, Dotcoms and the latest Madoff ripoff.
As for Accountant employees who function as Finance Managers/Controllers etc. they are there to protect their Employers. So, business ethics (whatever that may mean), scruples and morals take a back seat when it comes to the interests of the Employers. The Accountants will cut corners, bend the rules and do anything to protect their Employers.
The Accounting Profession is not really a Profession that benefits the community/country like, say, the Medical Profession. It has a parasitic element in it, however much the Accountants may deny it. |
p007
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16 Dec 2009 05:28:06 GMT Report for Abuse
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Sorry duplicated.
Edited By - p007 - 16 Dec 2009 05:30:16 GMT |
Kamal2006
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 16 Dec 2009 05:42:46 GMT Report for Abuse
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| PWC is the biggest crook. Remember Sathyam scandal in India.Sathyam accounts were certified by PWC. So, it is not sure even the so called multinational accounting firms follow any ethics. Probably our local CA is much better. |
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