Do you think you can develop good singers, if you don’t
have good listeners! Give a though on it
have good listeners! Give a though on it
Similarly, you can’t have good Auditors if nobody takes
Audit seriously.
Audit seriously.
The Auditors are not performing, not because there is a
problem with their education, training or sincerity, but for the reason that no
one is serious in getting audited. The Audit Reports are prepared just for the
purpose of Tax Clearance Certificate (TCC), a traditional approach and
importance of TCC for no reason. Where, even two Audit Reports are prepared one
for Tax Department and another for Bankers and another for their Internal
(Actual) record of the business transactions.
problem with their education, training or sincerity, but for the reason that no
one is serious in getting audited. The Audit Reports are prepared just for the
purpose of Tax Clearance Certificate (TCC), a traditional approach and
importance of TCC for no reason. Where, even two Audit Reports are prepared one
for Tax Department and another for Bankers and another for their Internal
(Actual) record of the business transactions.
The Auditors of today are equipped with latest
Techniques, Standards, education, training, skill-sets etc. and if given an
environment, time and a reasonable value for their time, I am sure they can do
justice with everyone an investors, authorities or to the own professionals.
Therefore, don’t ever blame an Auditor; blame the system where the Auditee is
only interested in getting a “Clean Certificate”.
Techniques, Standards, education, training, skill-sets etc. and if given an
environment, time and a reasonable value for their time, I am sure they can do
justice with everyone an investors, authorities or to the own professionals.
Therefore, don’t ever blame an Auditor; blame the system where the Auditee is
only interested in getting a “Clean Certificate”.
The Auditors of today are working in an environment where
many of the Auditees want to hide things and avoid transparency. This includes
both Private Sector as well as Public Sector entities. This suits them because
unethical business practices have become a way of life. In a race to show good
numbers and a glowing picture, businesses try to avoid serious Audits and just
try to engage into formalities. They pay least possible fee, give little
importance to Audit and Auditor, try to manipulate records, hide facts, indulge
in various kinds of unethical business practices, keep transactions off the
records and make fool of everyone and still everyone is well educated about
this too (that may be the Auditor or the Auditee, or the Banker or the
Authorities i.e ICAN, NRB, IDR, OCR and others). While some do this out of
compulsion, others have fraudulent intentions.
many of the Auditees want to hide things and avoid transparency. This includes
both Private Sector as well as Public Sector entities. This suits them because
unethical business practices have become a way of life. In a race to show good
numbers and a glowing picture, businesses try to avoid serious Audits and just
try to engage into formalities. They pay least possible fee, give little
importance to Audit and Auditor, try to manipulate records, hide facts, indulge
in various kinds of unethical business practices, keep transactions off the
records and make fool of everyone and still everyone is well educated about
this too (that may be the Auditor or the Auditee, or the Banker or the
Authorities i.e ICAN, NRB, IDR, OCR and others). While some do this out of
compulsion, others have fraudulent intentions.
Ultimately, the sufferers are the taxpayers/the Investors
(on Assessment/ Full Audit has to pay lump sum Overhead to tax officer), the
Govt. (loss revenue) and Public at large (misrepresenting the financial
statement will never signify the true picture of the company). Therefore, we
have to fix entire system and instead of passing new laws/bills, we have to
improve and implement the existing ones first in priority. Moreover, if you
expect services of International Standards and adopt global practices, you
can’t just pay a fraction of fee to the Nepalese Firms as compared to their
Global Peers like so called big 4’s.
(on Assessment/ Full Audit has to pay lump sum Overhead to tax officer), the
Govt. (loss revenue) and Public at large (misrepresenting the financial
statement will never signify the true picture of the company). Therefore, we
have to fix entire system and instead of passing new laws/bills, we have to
improve and implement the existing ones first in priority. Moreover, if you
expect services of International Standards and adopt global practices, you
can’t just pay a fraction of fee to the Nepalese Firms as compared to their
Global Peers like so called big 4’s.
Do we really want to clean the system and do we really
want good quality Audit done? If that be so focus on the major areas or sectors:
want good quality Audit done? If that be so focus on the major areas or sectors:
·
How come
that Banks are appointing their own employees as Auditors (Internal Auditors)
and keeping important transactions off the records, despite repeated complaints
of frauds and misreporting. Strictly regulating the Banks and corresponding the
submitted financial statements with the Tax Department.
How come
that Banks are appointing their own employees as Auditors (Internal Auditors)
and keeping important transactions off the records, despite repeated complaints
of frauds and misreporting. Strictly regulating the Banks and corresponding the
submitted financial statements with the Tax Department.
·
Why Banks/INGOs/
and other corporates insist only on Audits from Big-4/ancient audit firms. Is
this for transparency or for some other reason not known to us. There is
nothing which only these ‘Consultancy Firms’ offer and we Nepalese can’t. In
fact, I have no hesitation in saying that Young Nepalese Consultants are far
more knowledgeable, efficient and capable, as compared to many of these ancient
audit firms. However, the Govt., has no interest in intervening in these
areas, despite their open flouting of Laws.
Why Banks/INGOs/
and other corporates insist only on Audits from Big-4/ancient audit firms. Is
this for transparency or for some other reason not known to us. There is
nothing which only these ‘Consultancy Firms’ offer and we Nepalese can’t. In
fact, I have no hesitation in saying that Young Nepalese Consultants are far
more knowledgeable, efficient and capable, as compared to many of these ancient
audit firms. However, the Govt., has no interest in intervening in these
areas, despite their open flouting of Laws.
·
Why
bankers and other corporates do not complain when they find that Auditors have
not done their job properly. They wake-up to blame auditors only when a fraud
has surfaced in public domain and when it comes down to fix responsibility and
accountability.
Why
bankers and other corporates do not complain when they find that Auditors have
not done their job properly. They wake-up to blame auditors only when a fraud
has surfaced in public domain and when it comes down to fix responsibility and
accountability.
·
Why there
is no serious Audit of various Govt. funded Schemes and there is no
participation of CAs in Policy formation and implementation of various Taxation
and Fund raising ideas of the Governments. Are we not doing just a formality?
Why there
is no serious Audit of various Govt. funded Schemes and there is no
participation of CAs in Policy formation and implementation of various Taxation
and Fund raising ideas of the Governments. Are we not doing just a formality?
·
There are
many more such cases where the Auditee itself doesn’t want interference of
Auditor.
There are
many more such cases where the Auditee itself doesn’t want interference of
Auditor.
Therefore, the quality of Audit will improve only if
there is seriousness from the side of Auditee and if the Auditor is paid
reasonable remuneration for its assignment. Moreover, the need of hour is to
pay Nepalese Firms as per Global Standards, otherwise don’t compare them with
Multinational Accounting Firms (MAF). In fact, just like Foreign Law Firms are
banned to practice in Nepal, the Big-4 and other MAFs should also be completely
banned. Our Institute must take strict disciplinary action against deputations
of these Big-4 and MAFs in many sectors but majorly the Auditee Awareness
program need to be conducted first to develop the quality system.
there is seriousness from the side of Auditee and if the Auditor is paid
reasonable remuneration for its assignment. Moreover, the need of hour is to
pay Nepalese Firms as per Global Standards, otherwise don’t compare them with
Multinational Accounting Firms (MAF). In fact, just like Foreign Law Firms are
banned to practice in Nepal, the Big-4 and other MAFs should also be completely
banned. Our Institute must take strict disciplinary action against deputations
of these Big-4 and MAFs in many sectors but majorly the Auditee Awareness
program need to be conducted first to develop the quality system.
It is my belief that no CA or CA Firm can do
justification with its Audit and Assurance job with independence and with
authority, if his/its appointment and fee is left at the mercy of Clients. Time
has come to change this old system of appointing Auditors, which is full of
flaws, and put some system in place for allotment of Company Audits.
justification with its Audit and Assurance job with independence and with
authority, if his/its appointment and fee is left at the mercy of Clients. Time
has come to change this old system of appointing Auditors, which is full of
flaws, and put some system in place for allotment of Company Audits.
There are also serious issues w.r.t allotment of various
other assignments related to Tax Audits, Internal Audits, Certifications etc.,
where utmost independence is required. If Clients continue to appoint their own
Auditors at their own terms and fee, nothing is going to change and we will
always be blamed for mis-reporting.
other assignments related to Tax Audits, Internal Audits, Certifications etc.,
where utmost independence is required. If Clients continue to appoint their own
Auditors at their own terms and fee, nothing is going to change and we will
always be blamed for mis-reporting.
I don’t think these days trending NFRS /NAS would change
rules of the game. If the authority can’t regulate the Appointment and Fixation
of Auditors’ Fee, it has no business to regulate the Quality of Audit.
rules of the game. If the authority can’t regulate the Appointment and Fixation
of Auditors’ Fee, it has no business to regulate the Quality of Audit.
Do we expect anything from our
Council, or I am hoping against hope? Till date there is no official statement
from our council on any policy level at OCR, DOI, IRD, NRB and other government
sectors for the CA community. It seems they are ready to take hit from all
sides and let this Institute sink. What stops them to take a strong stand on
these issues??
Council, or I am hoping against hope? Till date there is no official statement
from our council on any policy level at OCR, DOI, IRD, NRB and other government
sectors for the CA community. It seems they are ready to take hit from all
sides and let this Institute sink. What stops them to take a strong stand on
these issues??
Why our council members can’t respond strongly in such a
scenario?
scenario?
Hope fully, the newly elected council members would
address and respond to our thought and imperfections being noted.
address and respond to our thought and imperfections being noted.
Therefore, unless entire CA community speaks in one
voice, nothing really will happen. Let’s not divide, make a multiple groups for
the same purpose, Let’s unite and work together being a Professional Family
Members under the same professional home.
voice, nothing really will happen. Let’s not divide, make a multiple groups for
the same purpose, Let’s unite and work together being a Professional Family
Members under the same professional home.
#Stay_Connected
#WeCAN
~By CA Loken
प्रतिक्रिया दिनुहोस्