Sri Lanka is not in position prepare a balance sheet and does not have one. As a result, the country does not know the total assets of the country, and the total liabilities of the country said, Chairman of PAO Development Committee of IFAC and Senior Partner Ernst & Young, Arjuna Herath.
He was speaking at the AAT annual conference at Cinnamon Grand on Monday. He said that due to this the country do not know whether the net worth of the country is growing or eroding.
“This means we do not have the opportunity to hold the government responsible and accountable to managing the wealth of the country for the benefit of our people.”
He said that this is one of the most significant reasons why Sri Lanka is not in a position to leverage on the great potential this country has.
“To manage the public finances well including working capital and re-finance needs, an essential prerequisite is a balance sheet for the country and a strong one at that.”
“Hence Sri Lanka must immediately adopt accrual accounting in the Public Sector. The absence of accrual accounting is also the cause for rampant corruption and bribery as the transactions performed are not transparent as the government does not prepare accounts on an accrual basis”.
“CA Sri Lanka and AAT as professional bodies in this country have worked alongside government, regulators, law enforcement, and international bodies, and supported our members to combat bribery, corruption, tax-evasion, money laundering, and the financing of international terrorism.
“The way out of this is for the government adopting Sri Lanka Public Sector Accounting Standards and getting in to accrual accounting.”
Commenting on HR sector he said that research done in some jurisdictions shows that there is a serious shortfall in the required accounting foundation and accounting technicians’ skills. “This is an issue for SMEs, local and provincial government authorities, and Development agencies running projects at a local level.” “It is unfortunate that in the professional accountant’s value chain, whoever that does not reach the professional accountant’s status drops out of intermediary roles and gets to other roles in the commercial sector.”
This has resulted in the accounting profession providing a good talent pool for commerce and industry at the expense of our own profession.
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