icab capa keynote paper

ICAB-CAPA INTERNATIONAL CONFERENCE on STRENGTHENING BANGLADESH PUBLIC SECTOR ACCOUNTING AND AUDITING - GLOBAL REFORMS AND THE WAY FORWARD Keynote Paper on “STRENGTHENING PUBLIC SECTOR ACCOUNTING AND AUDITING IN BANGLADESH” ANWARUDDIN CHOWDHURY Council member & Past President ICAB Director CAPA Board 10 GOVERNMENT PUBLIC SECTOR REPORTING - CASH / ACCRUAL ACCOUNTING Cash Flows Budget Cash Flows Actuals Revenues, Expenses Revenues, Expenses Budget Actuals Assets, Liabilities Assets, Liabilities Estimate Actuals Cash Accounting (SE) Accrual Accounting (DE) 27 CASH-BASIS IPSAS: TRANSITION STEP TO ACCRUAL IPSAS (OCAG BANGLADESH) Cash-Basis IPSAS (Transition Step) Accrual Accounting IPSAS 1-32 (Accrual DE) Current policies (Cash SE ) 28 ACCRUAL AND CASH ACCOUNTING : AN INTEGRATIVE APPORACH rect i D g n i r i Requ low F h s a C Method nt Stateme hs a C f o Adoption is S A S P I s i Bas d Facilitate sh a C d n a Accrual ully F e r a g n Accounti d Integrate 29 ROLE OF INTERNATIONAL STANDARDS SETTING BODIES  IFAC IPSAS Board = IPSAS IAAS Board = ISA  IASB = IFRS  INTOSAI = ISSAI  (MOSAIC - INTOSAI / IFAC ) International Public Sector Accounting Standards IPSAS 2011 (Appendix I)  Cash Basis IPSAS-Financial Reporting Under Cash Basis Accg  Accrual Basis IPSAS-32 Standards 30 ROLE OF ACCOUNTANCY PROFESSION (ICAB)  Advocacy for Awareness Development  Collaboration with CAG & Development Partners  Impart Skills Development Training for Accrual Accounting,  Preparation Double Entry Financial Statements  Implementation of IPSAS, ISSAI, IFRS, ISA  Organize Seminars/Workshops on Relevant Issues  Provide Relevant Inputs to Standards Setters Devise Sustainable Strategies for Future Development Public Sector Financial Management  31 STATUS OF IMPLEMENTATION OF ACCRUAL-BASED ACCOUNTING IN SOUTH ASIAN COUNTRIES INDIA  Central & Provincial Government – Cash Accounting  Local bodies moving to Accrual-Based Accounting  ICAI Technical Support for Accrual-Based Accounting  Government Accounting Standards Advisory Board (GASAB) Developing Accrual-Based Accounting Standards PAKISTAN     Federal & Provincial Government – Cash Accounting Local Bodies Moving to Modified Cash Accounting New Accounting Model Implemented for Accrual Accounting CGA & AG cognizant of IPSAS Contd 32 STATUS OF IMPLEMENTATION OF ACCRUAL-BASED ACCOUNTING IN SOUTH ASIAN COUNTRIES BANGLADESH     Government Agencies – Cash Accounting Moving to Cash IPSAS Local Bodies - Cash Accounting ICAB Committee on Government Accounting ICAB Members Cognizant of IPSAS SRI LANKA    Central Government & Provincial Councils – Cash Accounting Local Bodies using Accrual-Based Accounting partially ICASL’s Developing Accrual-Based Accounting Standards NEPAL    Cash-Based Government Accounting System IPSAS are Included in the Curriculum of ICAN Plans for Accrual-Based Accounting System 33 NEED FOR REFORMS  Inducing Political Will/Commitment and Mindset Changes  Encouraging Parliamentary Scrutiny  Strengthening Public Sector Financial Management  High Quality Financial Reporting & Credible Auditing  Enhancing Accountability & Transparency in Govt Decisions  Increasing Public Credibility of Govt Performance  Meeting Donor Expectations  Capacity Building & Institutional Development (Training)  Implementation of Accrual Accounting  Implementation of Accounting/ Auditing Standards  OCAG Organization Reforms  Technology Orientation 34  CHALLENGES Political Will /Commitment of Government  Mindset Changes in Civil Administration  OCAG Capacity Building & Institutional Development  Professional Skills Development  Financial Resources Availability  Support of Development Partners  Implementation of Accrual Accounting System  Preparation of FS on Double Entry Principles  Implementation of IPSAS - Cash and Accrual  Application of Auditing Standards - ISSAI/ ISA  Valuation of Govt Assets / Determination of Liabilities  Effective Implementation of TA Projects (SCOPE,SPEMP B) 35 POLICY ISSUES AND RECOMMENDATION  Composition of High Powered Task Force  Legislative Changes : Audit Act Enactment  Effective Parliamentary Scrutiny Process  Independent and Effective SAI (CAG)  Separation of Accounting & Auditing Functions  Capacity Building and Institutional Development of OCAG  Adequate Appropriate Application of IPSAS & ISSAI  Customization of International Standards - Adaptation  Conversion to Accrual Accounting – Pilot Projects  Timeframe Fixation for Double Entry & Accruals IPSAS  Dedicated Training Program/ IT Orientation of OCAG  Strategic Partnership Between SAI(CAG) & Profession (ICAB)  Proactive Role by Accountancy Profession (ICAB) 36 THE WAY FORWARD  Policy Decisions at Legislative Level  Enabling Environment For Cooperation - Formation of Task Force  Capacity Building /Strengthening Institutions  Development of Action Plan - Main Directions -Responsibility - Time Frame  Progress Towards Accrual Accounting  Develop Standards, Methods and Practices  Synergize Strategic Partnership Between CAG and ICAB 37 MESSAGE  Develop Awareness for Mindset Changes  Stimulate Political Will & Commitment for Implementation of Reforms Agenda  Establish Strategic Sense of Direction  Catalyze Leadership Decisions for Strengthening Public Sector Accounting and Auditing With Global Best Practices 38 APPENDIX INTERNATIONAL PUBLIC SECTOR ACCOUNTING STANDARDS (IPSAS) 2011 IPSAS 1—Presentation of Financial Statements IPSAS 2—Cash Flow Statements IPSAS 3—Accounting Policies, Changes in Accounting Estimates and Errors IPSAS 4—The Effects of Changes in Foreign Exchange Rates IPSAS 5—Borrowing Costs IPSAS 6—Consolidated and Separate Financial Statements IPSAS 7—Investments in Associates IPSAS 8—Interests in Joint Ventures IPSAS 9—Revenue from Exchange Transactions IPSAS IPSAS IPSAS IPSAS IPSAS IPSAS 10—Financial Reporting in Hyperinflationary Economies 11—Construction Contracts 12—Inventories 13—Leases 14—Events after the Reporting Date 15—Financial Instruments: Disclosure and Presentation Contd 39 IPSAS IPSAS IPSAS IPSAS IPSAS IPSAS IPSAS IPSAS IPSAS IPSAS IPSAS IPSAS IPSAS IPSAS IPSAS IPSAS IPSAS 16—Investment Property 17—Property, Plant, and Equipment 18—Segment Reporting 19—Provisions, Contingent Liabilities and Contingent Assets 20—Related Party Disclosures 21—Impairment of Non-Cash-Generating Assets 22—Disclosure of Financial Information in Government Sector 23—Revenue from Non-Exchange Transactions (Taxes and Transfers) 24—Presentation of Budget Information in Financial Statements 25—Employee Benefits 26—Impairment of Cash-Generating Assets 27—Agriculture 28—Financial Instruments: Presentation 29—Financial Instruments: Recognition and Measurement 30—Financial Instruments: Disclosures 31—Intangible Assets 32—Service Concession Arrangements - Guarantor 40 HAPPY PUBLIC SECTOR FINANCIAL MANAGEMENT LET’S GO AHEAD AND DEVISE SUSTAINABLE STRATEGIES FOR STRENGTHENING PUBLIC SECTOR ACCOUNTING AND AUDITING IN BANGLADESH THANK YOU VERY MUCH INDEED 41 .. .Keynote Paper on “STRENGTHENING PUBLIC SECTOR ACCOUNTING AND AUDITING IN BANGLADESH” ANWARUDDIN CHOWDHURY