‘Wait for conclusion of Council probe” –urges ICASL CEO
The inquiry into the conduct of Ernst & Young and PricewaterhouseCoopers during the privatization of Sri Lanka Insurance Corporation (SLIC) by the ethics committee of the Institute of Chartered Accountants of Sri Lanka (ICASL) is still being 'actively deliberated' by the ICASL Council. In an interview with The Sunday Times FT, Chief Executive Officer of ICASL, Keith Livera likens it to a judicial inquiry and urges members of the public to withhold negative reactions until the Council makes a determination.
He called public opinion to the details of the conduct by the two auditing firms which have been heavily reported upon in the media as unfair.
"Processes and procedures are in place for good reasons," Livera said. "One needs to allow for them to take place." He said the greatest injustice was to impede the process in any way, either by hampering or hastening it. The inquiry which commenced in 2005 was instigated by a complaint from a member of the public. "This is an exceptional case," Livera said, referring to the magnitude of documents and testimony that has to be scrutinized. He added that 'good progress has been made.' In general, the volume of complaints to the ICASL is high and each are scrutinized by the Council.
Subsequent to the findings of the investigative panel of the ethics committee which concluded there is a prima facie case, it was referred to the 16 member Council. Their findings may result in the formation of 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.
ICASL has an entire department dedicated to accounting standards. Director Technical Ruvani Bandara said International Accounting Standards (IAS) are adopted and it is the responsibility of the accounting standards committee to review IAS and determine how much applies to local standards. Generally, these standards are not changed. Bandara said Sri Lanka is in line with professional developed countries and is a leader is this region in terms of promulgating, adopting and financial reporting. Eighteen standards have been revised since Sri Lanka Accounting Standards (SLAS) were gazetted. All of the accounting standards are currently being revised.
Despite the criticism the accounting profession has taken, plagued by international scandals such as the collapse of energy giant Enron, Director Projects Sunil Karunanayake and Livera said there is still a huge demand for accountants, particularly in the western world. Studies have shown that supply is unable to keep up with demand. Out of approximately 3000 ICASL members, around 30% are employed overseas. ICASL is registering over 6000 students a year and have expanded their scope island wide by establishing three 'knowledge' or information centres in Anuradhapura, Kandy and Matara over the past two years. Plans to open another in Kurunegala should materialize over the next two months.
"Education is a fundamental right," Livera said. ICASL attaches great importance for its Chartered Accountancy study programme that produces chartered accountants, not only for local but also for global demand apart from regulating the profession and responsibility for accounting standards. Registration of students, once a monopoly of the cities has now spread right across the island, perhaps making ICASL one of the largest tertiary education institutions in the country.
In keeping with the global changes in curriculum and employer demands, ICASL has kept pace to improve the quality of chartered accountants passing out. In fact, 25% of the members on roll are employed overseas and bears testimony to the wider acceptance of the qualification.