Effective public financial mgt. crucial to achieve economic prosperity: CB Governor

Considering the important role government activities play in an economy, the need for effective public financial management, which is built on trustworthiness of accountants, cannot be overlooked if a nation strives to achieve economic prosperity.
“Successful economies deliver sustainable growth and resources to meet the needs of individuals, communities and businesses. With government activities accounting for nearly half of the global economy, effective public financial management is crucial, yet all often overlook conditions for achieving prosperity,” Central Bank Governor Dr. Indrajit Coomaraswamy opined.
He made these remarks delivering the keynote speech at a seminar themed ‘Ethical Responsibility of Professional Accountants in the Public Sector’ organised by the Association of Public Finance Accountants of Sri Lanka (APFASL), the public sector wing of the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) in Colombo yesterday.
Although the role of professional accountants is fundamentally about creating trust, showing how money has been raised and how that money has been used, Dr. Coomaraswamy pointed out that violations of public and private trust occur daily, leading to unfavourable results.
“Sadly, not everyone who work in the accounting field is trustworthy. Daily violations of public and private trust occur, and resolving ethical dilemmas doesn’t always end favourably.
“Blatant fraud, theft and corruption may make good movies and front-page bad news stories, but accountants’ daily work involves much more subtle ethical situations. Decision making doesn’t always come down to a binary “yes” or “no”. The fine line between the two subject to interpretation will make up the bulk of the dilemmas that an accountant faces during his or her career,” he said. Further he noted that public sector finance professionals, particularly in developing countries, come under constant pressure to act unethically.
According to a recent survey conducted by Charted Institute of Public Finance and Accounting in the UK, over 60 percent of public sector finance professionals have come under pressure to act unethically at least once in their career.

“I do not need to tell this audience how much more challenging the life of a public sector accountant is in a developing country,” the Governor quipped.
He underscored that that accountants in the public sector have a larger responsibility as holders of public office compared to private sector accountants.
“There are certain ethical standards that members of the public expect from public office holders, such as to be committed to public rather than private ends, to be honest and open in decision making, to make decisions in the light of the best evidence, to be held accountable and to lead exemplary lives in public office,” he elaborated.
As a number of high profile financial scandals being uncovered in recent years, he noted that ethics and good corporate governance have started to receive higher importance while the role of the accountants is being elevated to a role model and a guardian of good financial ethics.
“A responsibility that each accountant carries is that their personal, professional success or failure can condition the perception of the general public regarding the whole profession.
“There was a time when Enron and other high profile scandals happened, the whole accountancy profession came under intense scrutiny. Similarly, the whole financial sector was tainted by the causes of the global financial crisis,” Dr. Coomaraswamy recalled.