The public's right to know

The abundance of accounting scandals this country has been hit with and most recently, the ethics investigations of Ernst & Young and PricewaterhouseCoopers (PwC), two international, reputed auditing firms for their role in the Sri Lanka Insurance Corportion (SLIC) privatization.

Ironically, accountants are of the view that the media is being unethical in covering these investigations. In a twist of logic and lack of common sense, they feel the public has no right to be informed on issues which directly affect them. Perhaps they feel that shielding the public from these inquiries might make us forget their transgressions and lapses of ethics and judgment.

A chartered accountant, asked about the ethics committee investigation of the Institute of Chartered Accountants of Sri Lanka (ICASL) into Ernst & Young and PwC, told The Sunday Times FT that ethics committee investigations are strictly for members of the profession and that it is confidential within the Institute. The accountant further said it was unethical for the media to cover the investigations because it gives newspapers a bad reputation. The entirety of that statement is audacious since newspapers are not going around allegedly "cooking the books", so to speak. We are simply reporting on it.

Chandra Jayaratne, a former Chairman of the Ceylon Chamber of Commerce, said the problem goes beyond simply accountability and transparency in accounting but is a right of information, a fundamental issue paramount to any society. "I am one of those who support the Right of Information Act brought up by the UNP regime that was never enacted," he said. "Any stakeholder in a transaction has a right to information. If you take the SLIC transaction, it affects the life fund of people, it affects the government, employees, the professionals, everybody. A lot of information should be available." The government should know that good governance practices attract investors, he said.

"Generally, it can be applied to this or any situation," Jayaratne continued. Transparency International, an global organization established to fight corruption had also shown support for this legislation but governments in general do not like to be questioned on their dealings, such as how tenders are awarded. Jayaratne said electricity costs in Sri Lanka are the highest in the entire South Asian region. "As subscribers, we should have a right to know why that is. Is it because of leakages, unnecessary overhead or corruption? Without information, you cannot know what is happening. As a society, we should all bring this act into effect." This can also be applied to the government's claim of 7.5% growth. "How much of this growth is due to war related expenses?" questioned Jayaratne. "To me, this is not growth.

This is wasteful expenditure which is added to growth but we are unable to find this information. If you have the correct information, you can critique it and make the government structure more effective."

K.C. Vignarajah, past president of the Ceylon National Chamber of Industries, told The Sunday Times FT that the accountants deliberately cheated the public in the SLIC privatization. "How can we rely on these people when they dodge the facts?" he asked.

The ICASL investigation was initially prompted by the urging of a public complainant who wrote to ICASL and the Sri Lanka Accounting & Auditing Standards Monitoring Board (SLAASMB) in August 2005. The matter was first referred to the ethics committee and according to Lakshman Perera, Secretary of the ICASL, the 4-member investigative panel formed by the ethics committee has wrapped up its inquiry. The responsibility of the investigative panel is to go evaluate the evidence and question witnesses and ultimately, decide if there is a prima facie case. If so, the case will be referred to the 16 member Council of the ICASL which will then appoint a Disciplinary Committee.

According to the Act of Incorporation and Regulations of the ICASL, the Council has the power to authorize any advocate or proctor to assist the Disciplinary Committee as to the leading and taking of evidence.

Furthermore, upon the conclusion of an inquiry, the Disciplinary Committee shall prepare and transmit to the Council a report embodying the findings on the matters in respect of which the inquiry was held and shall cause a copy of such report to be sent to the person whose conduct was the subject of the inquiry.

In another instance of the accounting profession maintaining silence on yet another investigation, the SLAASMB is also conducting its investigation, again prompted by the public complainant, into Ernst & Young and PwC's conduct on the SLIC privatization.

In a letter dated 27 October 2006 addressed to Yohan Perera, President of the ICASL, the complainant describes the SLAASMB investigation as a "major farce" when he was informed by the SLAASMB through email on 28 November 2005 that "Whilst we appreciate the contribution made by the complainant, we are not in a position to keep the complainant informed of the progress of the investigation and the outcome of the investigation, as it would undermine our policy on releasing information to the public." When The Sunday Times FT contacted the Senior Technical Manager at SLAASM, Anusha Mohotti, she also said they cannot comment on the investigation and no deadline can be given on when the investigation will be wrapped up. (NG)