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SAFA
INTERNATIONAL CONFERENCE
2014
ACCOUNTANTS FOR
G R OW T H
PERSPECTIVE SOUTH ASIA 9 SEPTEMBER, 2014 | DHAKA, BANGLADESH
Organised by:
The Institute of Chartered Accountants of Bangladesh
9 SEPTEMBER, 2014 | DHAKA, BANGLADESH
Organised by:
The Institute of Chartered Accountants of Bangladesh
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Foreword & Messages
05-25
SAFA Conference Committee 2014
26-29
About SAFA
30-32
The Institute - A Brief Outline
33-37
Program
38-39
Keynote Speech Accountants for Growth: Perspective South Asia by Mustafa K. Mujeri
41-49
TECHNICAL SESSION I Public Private Partnership in Development Strategy by Mr. Anwaruddin Chowdhury
50-67
TECHNICAL SESSION II Chartered Accountants -Transparency and Accountability by Mr. Naeem Akhtar Sheikh FCA
68-83
TECHNICAL SESSION III Business and Profession for Development Strategy by CA. Jay Ajit Chhaira
84-93
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CHAIRMAN SAFA Conference Committee & Partner, Abbas Khan & Company
09 September 2014
Foreword
I
t is indeed a great pleasure that the Institute of Chartered Accountants of Bangladesh (ICAB) is organising 'SAFA International Conference 2014' on 09 September 2014 with the theme ‘Accountants for Growth- Perspective South Asia’. The conference is being held at a time when much attention is focused on South Asia for many reasons. The world is seeing enormous potentials amongst the South Asian Nations in their fight against corruption poverty inter alia economic emancipation. The transparency, accountability is no more 'buzz' words and can be left for another day. There is strong stigma amongst the population that their money is siphoned off because of the institutional failure or suitable policy in place. Their desire for transparency, accountability leading to economic growth can be realised once all actors are being able to put up their appropriate efforts in right perspectives. It needs no mention that Chartered Accountants have been playing this essential role. The effort to redeem their role is stronger these days in our country. It is time to recognize and harmonize the role of accountants in their individual area of expertise.
South Asia is one of the fastest growing economic regions in the world. Despite repeated natural disasters the economies of this region have successfully bounced back and shown resilience to contain and continue impressive growth. In order to implement the roadmap of the Government of Bangladesh to achieve GDP growth rate of above 7% as envisaged in the National Budget for 2014-2015 a comprehensive drive is necessary to open potential avenues and sources to harness resources for financing its development activities. Policy of the government to accelerate the process of national resource mobilization are positive but the government can involve the Chartered Accountants in wider scale to utilize their professional expertise to further enhance the course of action for resource mobilization effectively and efficiently to achieve the desired objectives as envisaged in the fiscal policy of the government. Chartered Accountants can provide services to create congenial environment to foreign and direct investment, capital market development, industrialization and thereby can contribute towards the economic growth of the country. Chartered Accountants are in better position to apply effective technique, ensure sound professional ethics and code, provide specialized training and professional expertise in accounting, auditing, taxation, corporate laws, management consultancy, information technology and related subjects. Developing countries like Bangladesh are currently confronted with chronic fiscal deficits, debt service obligations in the face of declining external assistance, the service of Chartered Accountants is essentially important for implementation of development programme of the government particularly ADP. More so the Chartered Accountants have a wider role to play in the context of international economic relationship and may have strong influence in preparing strategic plan in respect of bilateral tax treaties, protecting the interests of national revenue and securing legitimately due tax revenue. The concept of financing for development budget has drawn the attention of policy makers and economists all over the world. The government of the SAARC countries can better route the development strategy with the assistance of the member bodies of the South Asian Federation of Accountants (SAFA) who would be able to exchange effective ideas or resource mobilization for mutual regional development and economic cooperation in the field of natural resources like power, energy, river water, agricultural implements and human resource. My thanks and gratitude to the august audience, foreign participants, delegates from Accounting bodies of SAFA and other member bodies, representatives from SAARC countries, Hon'ble Members of the Cabinet, members of Diplomatic Missions, high profile dignitaries of the Government, and representatives from banks, insurance companies, trade bodies and members of the press and electronic media. I would like to record my thanks to the Organizing Committee of Conference, Chairmen of the Sub-Committees, members of the Institute and the sponsors and advertisers who extended their active support to make this Conference a successful one.
Abbas Uddin Khan FCA
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PRESIDENT Government of the People's Republic of Bangladesh
25 Vadra 1421 09 September 2014
Message
I
am pleased to learn that the Institute of Chartered Accountants of Bangladesh (ICAB) is organizing the SAFA International Conference-2014 on the theme 'Accountants for Growth-Perspective South Asia' on 09 September 2014 in Dhaka. On the eve of the occasion, I extend my sincere thanks to the participants in this conference both from home and abroad. I have been informed that the conference theme 'Accountants for Growth-Perspective South Asia' is a topical issue that depicts the active support and cooperation of accountants for development in economy through building business confidence. I hope, the conference will be devising a strategic roadmap for sustainable growth of the nations in South Asia using the best practices of professional accountants and at the same time members of professional accounting bodies will maintain high level of quality for appropriate decision making to ensure excellence, efficiency and effectiveness in every aspect. It is learnt that since its establishment in 1973, the Institute has been regulating the accountancy profession in Bangladesh effectively to ensure transparency, accountability and good governance in the corporate sectors of the country. I expect that this Conference will bring fruitful outcome for the participants of the Accounting Bodies in South Asia Region. I wish SAFA International Conference-2014 a success. Khoda Hafez, May Bangladesh Live Forever.
Md. Abdul Hamid
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PRIME MINISTER Government of the People's Republic of Bangladesh
25 Vadra 1421 09 September 2014
Message
I
am happy to learn that the Institute of Chartered Accountants of Bangladesh (ICAB) is going to organize the SAFA International Conference-2014 on the theme ‘Accountants for Growth-Perspective South Asia’ on 9 September 2014 in Dhaka.
The Institute has rightly chosen the theme ‘Accountants for Growth-Perspective South Asia’ which is in fact a topical issue as the South Asian countries have huge human resources and potential accounting professionals for enhancing economic development of these nations through building business confidence. I hope that the conference will contribute towards professional development of accountants to ensure transparency and accountability through professionalism in business and economic development. I wish the SAFA International Conference-2014 a grand success.
Joi Bangla, Joi Bangabandhu May Bangladesh Live Forever.
Sheikh Hasina
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MINISTER Ministry of Finance Government of the People's Republic of Bangladesh
09 September 2014
Message
I
am delighted to know that the Institute of Chartered Accountants of Bangladesh (ICAB) is going to hold the SAFA International Conference-2014 on 9 September 2014 in Dhaka.
The topic chosen for the Conference is 'Accountants for Growth-Perspective South Asia'. Accountants make sure that all institutions both public and private make an expenditure properly for the desired purposes for which it is allocated. An expenditure is made to buy goods and services to maintain life, to improve the standard of living and also to improve the environment in which we live. It can therefore, be safely said that accountants by ensuring rightness of both the expenditure and the purposes of it ensure development of the society, i.e., socio-economic growth of the country. Since its establishment in 1973, ICAB has playing a pivotal role in accelerating and upholding the image of the accountancy profession. I hope that ICAB will continue to play a positive role to ensure integrity, transparency and accountability in the financial sector. I would like to emphasize here that the effort of ICAB to organize such an International Events is commendable. I am confident that the SAFA International Conference-2014 will be able to significantly enhance the image of the accountancy profession in Bangladesh and in South Asian Region. I with the SAFA International Conference-2014 a great success.
Abul Maal A. Muhith, MP
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COMMERCE MINISTER Government of the People's Republic of Bangladesh
09 September 2014
Message
I
am delighted to learn that the Institute of Chartered Accountants of Bangladesh (ICAB) is going to organize the ‘SAFA International Conference-2014’ on 9 September 2014 in Dhaka.
I appreciate the role of ICAB for organizing such an international event. The theme of the Conference is ‘Accountants for Growth- Perspective South Asia’ which is appropriate in the right earnestness in the regional context. As the regulator of accountancy profession, ICAB is an appropriate Institution to make in depth analysis of the economic indicators and provide input in the preparation of transparent financial statements to make an entity lucrative to the investors. Such an event will be an effective forum for interaction on the subject related to the accountancy profession. I am hopeful that the participants will be benefited from the discussion in the Conference. I appreciate the efforts of the organizer for taking such an initiative for holding SAFA International Conference-2014 and wish the event a grand success. Joy Bangla, Joy Bangabandhu.
Tofail Ahmed, MP
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SECRETARY
MINISTRY OF COMMERCE Government of the People's Republic of Bangladesh
09 September 2014
Message
I
am happy to know that the Institute of Chartered Accountants of Bangladesh (ICAB) is going to hold its 'SAFA International Conference-2014' on the theme 'Accountants for Growth-Perspective South Asia' on 9 September 2014 in Dhaka. I hope that the conference
will be an appropriate forum for an effective interaction on the theme. Since its establishment in 1973, the Institute of Chartered Accountants of Bangladesh (ICAB) has been performing its responsibilities successfully being the regulator of the profession of accountants and matters connected therewith. The arrangement of the 'SAFA' International Conference-2014' on the topic 'Accountants for Growth-Perspective South Asia' will be noteworthy. I am sure that Professional Accountants of the South Asia Region help to contribute to the development in the economy through their best practices and professionalism. I really appreciate the efforts of the organizer for taking such an initiative for holding 'SAFA International Conference-2014'. I wish the event a grand success.
Hedayetullah Al Mamoon
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PRESIDENT The International Federation of Accountants (IFAC)
09 September 2014
Message
O
n behalf of the International Federation of Accountants (IFAC), its Board, and its 179 members and associates in 130 countries, I want to congratulate the South Asia Federation of Accountants (SAFA) on the occasion of its International Conference, along with the Institute of Chartered Accountants of Bangladesh (ICAB) for serving as host for this important regional event.
Reflecting IFAC’s commitment to “strengthening organizations, advancing economies,” the SAFA International Conference brings together leaders from government, finance, and the accountancy profession to address key challenges and formulate strategies for achieving sustainable growth in the South Asia region. Now celebrating its 30th anniversary, SAFA has been committed to developing the regional accountancy profession and ensuring its continued role in serving the public interest and working toward further economic development in South Asia. As an IFAC Accountancy Grouping, SAFA supports IFAC’s vision for the global accountancy profession to be recognized as a valued leader in the development of strong and sustainable organizations, financial markets, and economies. ICAB is a founding member of IFAC and has provided leadership developing Bangladesh’s accountancy profession and enabling it to provide high-quality services in the public interest. ICAB continues to support our core initiatives, including adopting and implementing international standards, improving quality and capacity, supporting the profession, and representing and advocating for the accountancy profession. I commend both SAFA and ICAB, and their members, for their efforts to strengthen and sustain the profession in the South Asia region, as well as globally through your affiliations with IFAC. I wish all of you great success during the SAFA International Conference. Sincerely,
Warren Allen
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PRESIDENT Confederation of Asian and Pacific Accountants (CAPA)
09 September 2014
Message
A
s President of the Confederation of Asian and Pacific Accountants (CAPA), it is my pleasure to give this message to the South Asian Federation of Accountants (SAFA) on the occasion of the SAFA International Conference. The chosen theme “Accountants for Growth - Perspective South Asia” is a timely response to meeting needs of the present global challenges which require quick responses on change imperatives on various levels ranging from individual country, to regional and even globally. CAPA applauds SAFA for its efforts in promoting regional cooperation for sustainable economic development of the South Asia region and the larger Asia-Pacific Region through CAPA. We value the close cooperation between our organisations, which enhances synergy and augments the quality and effectiveness of regional representation, for our member organisations and the public. CAPA, the regional organisation for national accountancy organisations in the Asia-Pacific is proud to support the initiative of SAFA in holding this International Conference. On behalf of CAPA, I wish SAFA a very successful International Conference. Yours sincerely,
Sujeewa Mudalige
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PRESIDENT South Asian Federation of Accountants (SAFA)
09 September 2014
Message
I
t gives me immense pleasure to welcome you all to the ensuing SAFA International Conference on the theme ‘Accountants for Growth –Perspective South Asia’ being organized by the Institute of Chartered Accountants of Bangladesh (ICAB) under the aegis of SAFA on 9th September 2014 at Dhaka, Bangladesh. I am also happy to note that ICAB is also bringing out a special Souvenir at this occasion.
The theme of the Conference is well chosen as accountants’ plays an important role towards building a financially sound, trustworthy and internationally competitive economy. An Accountant in his diverse role as an auditor, advisor, consultant, director or even as a professional accountant in business acts as a backbone of any healthy economy. Accountancy profession is constantly challenged to meet the demand for quality information and transparency, as these are vital to built confidence amongst investors in our markets and the profession achieves this by complying with stricter accounting, auditing, ethical and other standards. The accountability of the accountant towards the society has seen a new paradigm shift. Accountants now shoulder a larger responsibility towards the broad economic development of the society. The growth in all sectors of our economies demands higher level of professional ethics and better corporate governance. SAFA recognizes its responsibilities for the balanced development of the region, including the development of the least developed countries. In the modern era where the economies are striving for growth, exchange of knowledge is essential. SAFA knowing this imminent need has been organizing Conferences/Seminars from time to time in different member countries to enhance the skill and knowledge base of the professional accountants of these countries. While the challenges manifest themselves in various forms, the professional accountants from SAFA region are fully geared to convert the challenges into opportunities and excel through the absolute strength of their professional approach. Before I end I compliment ICAB for shouldering the responsibility for organizing this conference. I am sure that the participants would find the conference an enriching and fruitful experience.
CA. Subodh Kumar Agrawal
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VICE PRESIDENT South Asian Federation of Accountants (SAFA)
09 September 2014
Message
I
t gives me great pleasure to send this message on the occasion of the SAFA International Conference organized by the Institute of Chartered Accountants of Bangladesh (ICAB).
Accountants are known as the drivers of any business, and also sit in the nerve center of any organization. Therefore they have a key role to play in ensuring the sustainability of an organization as well as playing a significant role in the growth of any nation. In such a context, I believe this year’s theme at the international conference centering around ‘Accountants for Growth - Perspective South Asia?’ is a very pertinent topic and as the conference brings together representatives from across South Asia, it will be a unique platform to share and spur ideas which will enhance the stability of our region as we progress to be developed nations in Asia. Asia is undoubtedly the engine of growth and as nations that belong to this region, we all have an important role to play in ensuring this momentum continues, and be part of this growth momentum which will not only bring vast benefits to the region but also to our individual nations. Over the years, SAFA has been working tirelessly to develop the accountancy profession across the SAARC region, while ensuring our region’s continued eminence in the world of accountancy aiming at broader economic development. Today, the South Asian region houses a very versatile pool of accountants who not only give leadership to the region, but also beyond this region and this is indeed a proud achievement. An impressive number of South Asian accountants also play a significant role at regional and international levels in the accounting arena. I believe the next few years will be most vital for the development of both our profession and our region respectively, and events such as the SAFA International Conference can be an important stepping stone to help take our nations as well as region forward despite the challenging times ahead.
Arjuna Herath
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PRESIDENT The Institute of Chartered Accountants of India (ICAI)
09 September 2014
Message
I
am delighted to learn that the Institute of Chartered Accountants of Bangladesh (ICAB) is hosting SAFA International Conference on the theme ‘Accountants for Growth –Perspective South Asia’ on 9th September 2014 at Dhaka, Bangladesh and is bringing out a special souvenir on this occasion.
The theme of the Conference has rightly been chosen in the perspective of the developmental role being played by the accountancy profession all over the world. The importance of the role of professional accountants in ensuring the quality of financial reporting cannot be overly emphasized. Professional accountants often find themselves being at the frontline of safeguarding the integrity of financial reporting and plays important role in the growth of the organization with whom they are associated. The value of professional accountants will be measured by the extent to which they are perceived to be accountable not only to their own organizations but more importantly to the public. Professional accountants are a key pillar in organizations helping to create and sustain value and growth. I am sure that instant conference would be an apt occasion for accounting professionals to deliberate amongst themselves that how professional accountants can help in value creation and in facilitating faster economic growth in South Asian economies. I am sure that the deliberations at the Conference will provide useful insights which could be fruitfully explored to the benefit of all concerned. I send my felicitations & best wishes to the organizers and wish the Conference a grand success.
CA. K. Raghu
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PRESIDENT Institute of Chartered Accountants of Pakistan
09 September 2014
Message
I
t is indeed a pleasure to know that Institute of Chartered Accountants of Bangladesh is hosting the SAFA International Conference on “Accountants for Growth - Perspective South Asia” and I would like to take this opportunity to extend heartiest congratulations on behalf of the Institute of Chartered Accountants of Pakistan.
Survival and growth in the current global dynamics is only for those who evolve with the challenges. After the 2009 financial crisis the global economy has slowly picked up with still signs of recession in the European region. The ray of hope in these challenging times has been theAsia region with its sustained growth. Developing countries of the SAFA region have the potential for achieving tremendous growth with the given resources in both the agricultural and manufacturing sector. The challenges of today’s competitive times is re-building the image of the SAFA region and making it a global example for growth like the Asian giants China and Japan. The key to re-shaping the future strategy is transparency, consistency andgood corporate governance. The Accounting profession has proved its mantle in handling complex challenges and surmounting the hurdles faced by the economy time and again. The profession has evolved with its multi-faceted roles in the true sense ‘Learning from the past and Building the Future’. With imminent representatives of the profession meeting at a common platform, with one focus, sharing their experience in generating new ideas; adding a fresh prospective to emerging solutions should lead to better cooperation among the world economy at large. I take this opportunity to wish good luck to all the delegates and hope the conference is a learning experience that helps in broadening horizons across the cultural divide and is all that was hoped for. Lastly, kudos to the Institute of Chartered Accountants of Bangladesh for always taking the initiative in arranging such events for the drive to success. Hope to see more such activities in the future also.
Naeem Akhtar Sheikh
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PRESIDENT The Institute of Chartered Accountants of Bangladesh (ICAB)
09 September 2014
Message
I
am extremely delighted that SAFA International Conference 2014 is going to be organized by the Institute of Chartered Accountants of Bangladesh (ICAB) with an appropriate theme "Accountants for Growth - Perspective South Asia"
In this auspicious occasion, I take the humble opportunity to record my indebtedness to the Hon'ble President of the People's Republic of Bangladesh for kindly accepting our invitation to inaugurate the SAFA International Conference 2014 as the Chief Guest. I am grateful to the President, South Asian Federation of Accountants (SAFA) and distinguished personalities from home and abroad who have so generously given us their precious time to attend the SAFA International Conference 2014. I am also proud to warmly welcome the overseas delegates and their families from the SAFA member countries and other regional accounting bodies. Now regarding the theme of the conference, we are aware that in this era of economic advancement, the word 'Accountants' and 'Growth' goes side by side if not synonymous. There is no area of growth where the accountants have fewer roles to play. A country like Bangladesh has success in pharmaceutical and Garments Industries and with proper policy initiation the same can be done in other sectors. The accountancy profession is recognized as an effective service sector which directly contributes trade and commerce ensuring the growth. Though the role of Accountants has been marred by few incidences worldwide, it is undeniable that accountancy plays a key role in corporate governance ensuring transparency, accountability bringing professional ethics in financial reporting and many more. In the accounting fraternity, Chartered Accountants are now directly linked with banking and non banking financial institutions, insurance companies, capital market institutions and listed and non listed companies and entities. This makes them a crucial actor in economic growth and prosperity that people so eagerly aspire. In the global economy the South Asia enjoys enormous growth opportunities. To utilise the potentials, it needs to have Power, Gas, Electricity and other infrastructure for rapid economic development as much as it needs cooperation among them. More so, countries like Bangladesh, for example, if doing better in western and European market in certain sector; it has also potentiality in the Asian market. Same is true with the other SAFA countries. The Govt. of Bangladesh is mindful of taking friendly trade and commerce policy in restructuring tariff structure and proper incentives to the investors. Many other reforms still wait as the economy propels. In this era of growth and economic progresses, the professional expertise of the Chartered Accountants and other accountants has more burden of responsibility than any time before. Lastly, I once again welcome all the foreign delegates and participants, offer heartiest congratulations to the organizers, sponsors, advertisers and well-wishers, and wish the SAFA Conference-2014 a grand success.
Showkat Hossain FCA 22 | SAFA INTERNATIONAL CONFERENCE 2014
SAFA Conference Committee 2014
Abbas Uddin Khan FCA Chairman
Showkat Hossain FCA Co- Chairman
Md. Syful Islam FCA
Masih Malik Chowdhury FCA Chairman Souvenir Sub-Committee
Chairman Public Relation Sub-Committee
Showkat Hossain FCA
Kamrul Abedin FCA
Muhammad Farooq FCA
Chairman Finance Sub-Committee
Chairman Reception Sub-Committee
Chairman Food, Accommodation and Transport Sub-Committee
ASM Nayeem FCA
Chairman Cultural Function Sub-Committee
AKM Rahmat Ullah FCA Executive Secretary
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CHAIRMAN Souvenir Sub-Committee SAFA International Conference 2014 The Institute of Chartered Accountants of Bangladesh (ICAB) 09 September 2014
Message
I
t has enlightened me with immense pleasure & excitement when I was told that the Institute of Chartered Accountants of Bangladesh (ICAB) would be hosting SAFA International Conference 2014 on 9th September, 2014 on the theme ‘Accountants for Growth-Perspective South Asia’. As a council member of ICAB, the excitement or emotion turned into onus when the organising committee reposed upon me the task of Chairman, Souvenir Committee. South Asia is one of the most densely populated parts of the world. It habitates about 200 crores of world population. In this region, like elsewhere in the world, population is transforming into HR which has always geared up growth through phases of savings, investments, employment, growth, consumption & so forth. In this chain of economic transformation, quality of lives has continually been improving. So have the society,economy & humanity in bringing development for all at door. I am feeling privileged to welcome the distinguished delegates, dignitaries’ and participants who have thronged here from home and abroad. Respected participants your presence has made this conference eventful & a success in itself. Bringing out a Souvenir in such an occasion is in fact a routine practice. However, it was a festivity for the Souvenir Committee. Although our sincerity was dedicated yet that might not have matched readers’ expectations due to our limitations. Despite our all out efforts, there might have been left errors or omissions which had gone unnoticed to the Committee In this regard, on behalf Souvenir Sub-Committee I express my heartfelt thanks and gratitude to all the members of the organizing committee, Keynote paper writers, technical paper presenters and promoters of the event, very vitally the galaxies for their kind presence, ICAB officials, which altogether fostered us in arranging the conference & bringing out this souvenir. While I aspire this souvenir would meet your expectations, credit for it should accrue to the committee. I would very humbly note that responsibility of the failures would alone be shouldered by me. In this joyous moment, I pray and hope that this conference would bring in the professionals of this region closer to think & innovate a yet better WAY FORWARD for a huge part of global population. Grateful thanks to you all indeed.
Masih Malik Chowdhury FCA
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FROM THE DESK OF MEMBER SECRETARY SAFA Conference Committee 2014
09 September 2014
I
am extremely delighted that the Institute of Chartered Accountants of Bangladesh (ICAB) is going to organize the SAFA International Conference 2014 with an appropriate theme ‘Accountants for Growth – Perspective South Asia’ on 9 September 2014 in Dhaka. I would like to extend my worm welcome to the participants in this conference both from home and abroad.
SAFA International Conference 2014 is a congregation of accountancy professionals where speakers and participants from national, regional, and international organizations around the world are featured to exchange their experiences in regional context. The Conference is arranged with a view to positioning, maintaining and developing the accountancy profession in SAARC Region and ensuring its continued eminence in the world of accountancy; in the public interest and towards broader economic development. Despite obstacles such as conflict, corruption and high fiscal deficits, South Asia has achieved impressive economic growth and poverty reduction in the past decades. If this growth accelerates to 10 per cent a year, the region could see single-digit poverty rates by 2015. In this beaming light of hopes, the theme of the Conference is time befitting which would reflect the accountants’ activities for growth in SAARC countries. The South Asian Federation of Accountants (SAFA) was formed in 1984 comprising Accountancy Bodies in India, Pakistan, Nepal, Bangladesh and Sri Lanka, Bhutan, Maldives for promoting the accounting profession regionally and internationally with a mission to bring the accounting bodies together at a common forum and facilitate professional cooperation in the areas of education, training, technical and ethical standards. Our endeavor is reflecting the aims and objectives of SAFA and our professional commitments towards economic development of the country. This Conference is a part of our activities continued to revere the spirit of co-operation and to explore ways and means to inculcate increased bilateral relations amongst member bodies. I believe that through ‘Technical Papers’ presentation in three sessions of the Conference, the professional accountants will get vibrant ideas to identify, evaluate and address the threats ahead to come to foster the growth of the economy in this region. I wish to express gratitude to the President, the Council Members ICAB and the Conference Organizing committee for their valuable guidance and cooperation to make the conference grand success. My heartfelt thanks to the ICAB officials who worked behind successful arrangement of such immense event.
AKM Rahmat Ullah FCA
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PRESIDENT The Institute of Chartered Accountants in England and Wales (ICAEW
09 September 2014
Message
I
On behalf of ICAEW, I wish to convey our enthusiasm for the 2014 International Conference of the South Asian Federation of Accountants and for the selected theme, Accountants for Growth – the South Asian Perspective? Naturally, we wish the Institute of Chartered Accountants of Bangladesh (ICAB) well
in their success as the organiser of this prestigious event. ICAEW shares with its South Asian counterparts a belief that a robust and ethical accountancy profession has a crucial role to play in economic growth, development and innovation. As professional accountancy organisations, it is right that we convene dialogue with government, regulators, business and practice to share insights; discuss the challenges that professional accountants and finance functions face; and think in practical and strategic terms about sustainable solutions. We wish you an enjoyable and informative event.
Arthur Bailey
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SAFA Conference Committee 2014 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43
Mr. Abbas Uddin Khan FCA Mr. Showkat Hossain FCA Mr. Kamrul Abedin FCA Mr. Nasim Anwar FCA Mr. Dewan Nurul Islam FCA Mr. Akhtar Sohel Kasem FCA Mr. Masih Malik Chowdhury FCA Mr. Anwaruddin Chowdhury FCA Mr. ASM Nayeem FCA Dr. Md Abu Sayed Khan FCA Mr. M Farhad Hussain FCA Mr. Md. Humayun Kabir FCA Mr. A F Nesaruddin FCA Mr. Muhammad Farooq FCA Mr. Nasir Uddin Ahmed FCA Mr. Md Abdus Salam FCA Mr. Md. Syful Islam FCA Mr. Adeeb Hossain Khan FCA Mr. Md. Shahadat Hossain FCA Mr. Gopal Chandra Ghosh FCA Mr. Zahir Uddin Ahmed FCA Mr. M. J. Abedin FCA Mr. K. Z. Islam FCA Mr. AKM Mosharraf Hossain FCA Mr. Abdul Hafiz Chowdhury FCA Mr. Abdur Rouf Bhuiya FCA Mr. A K Chowdhury FCA Mr. Amanullah Khan FCA Mr. A. N. Altaf Hussain Siddiqui FCA Mr. Sheikh A Hafiz FCA Mr. Alamgir Kabir FCA Mr. Zaker Ahmed FCA Mr. A K Gulam Kibria FCA Mr. Akhter Zamil FCA Mr. M A Baree FCA Ms. Suraiya Zannath Khan FCA Ms. Parveen Mahmud FCA Ms. Yesmin Sabder Ali FCA Mr. Matiul Islam FCA Mr. Ajit Kumar Paul FCA Dr. M. Abdul Mazid, Adviser-ICAB Mr. AKM Rahmat Ullah FCA Mr. Mahbub Ahmed Siddique FCA
Chairman Co-Chairman Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member Executive Secretary Coordinator
SAFA INTERNATIONAL CONFERENCE 2014 |
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SAFA Conference Committee 2014 Finance Sub-Committee
Souvenir Sub-Committee
Public Relation Sub-Committee
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Md. Syful Islam FCA Nasim Anwar FCA Dewan Nurul Islam FCA AF Nesaruddin FCA Md Abdus Salam FCA Adeeb Hossain Khan FCA Gopal Chandra Ghosh FCA Alamgir Kabir FCA (158) Md. Habibur Rahman Bhuiyan FCA (589) Syed Abdul Hamid FCA (464) Hasan Mahmood FCA (564) Md Shahjahan Majumder FCA (571) Md Abdus Salam FCA (668) Hassan Md Ziaul Hoque Khan FCA (711) Dipen Kumar Saha Roy FCA (717) Mohammad Mainur Rahman Bhuiyan FCA (742)
Chairman Member Member Member Member Member Member Member Member Member Member Member Member Member Member Member
01 02 03 04 05 06 07 08 09 09 10 11 12 13
Masih Malik Chowdhury FCA Akhtar Sohel Kasem FCA Dr. Md. Abu Sayed Khan FCA Muhammed Farhad Hussain FCA Md. Humayun Kabir FCA Md. Shahadat Hossain FCA Md Ashraf Uddin Ahmed FCA (210) Md Atikur Rahman FCA (715) Mohammed Tofazzul Hussain FCA (848) Harun Mahmud FCA (850) Mohammed Jashim Uddin FCA (863) Mohammed Forkan Uddin FCA (886) Mohammad Khairul Alam FCA (972) Mohammed Dipok Kumar Roy FCA (1334)
Chairman Member Member Member Member Member Member Member Member Member Member Member Member Member
01 02 03 04 05 06 07 08 09 10 11
ASM Nayeem FCA Muhammad Farooq FCA Nasir Uddin Ahmed FCA Adeeb Hossain Khan FCA Gopal Chandra Ghosh FCA Mohamed Abdul Baree FCA (482) Suraiya Zannath Khan FCA (582) Mahmudul Hasan Khusru FCA (820) Md. Fokrul Islam FCA (890) Shuvra Kanti Choudhury FCA (932) Fouz Ilahi ACA (1513)
Chairman Member Member Member Member Member Member Member Member Member Member
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SAFA Conference Committee 2014 Reception Sub-Committee
Food, Accommodation and Transport Sub-Committee
Cultural Function Sub-Committee
01 02 03 04 05 06 07 08 09 10 11 12
Showkat Hossain FCA Kamrul Abedin FCA Akhtar Sohel Kasem FCA Masih Malik Chowdhury FCA Anwaruddin Chowdhury FCA ASM Nayeem FCA Dr. Md. Abu Sayed Khan FCA AF Nesaruddin FCA Zahir Uddin Ahmed FCA (10) AK Chowdhury FCA (52) AK Gulam Kibria FCA (392) Akter Zamil FCA (441)
Chairman Member Member Member Member Member Member Member Member Member Member Member
01 02 03 04 05 06 07 08 09 10 11
Kamrul Abedin FCA Md Nurul Haque FCA (195) Md Atikur Rahman (715) AKM Mohitul Haq FCA (458) Imran Ahmed FCA (827) A K M Saif Ullah Kowchar FCA (828) Masud Parvez FCA (835) Shafi Uddin Ahmed FCA (839) Mizanur Rahman Khan FCA (843) Md. Zillur Rahman FCA (1040) Kazi Shah Omar Faruk ACA (1422)
Chairman Member Member Member Member Member Member Member Member Member Member
01 02 03 04 05 06 07 08 09 10 11 12
Muhammad Farooq FCA Dewan Nurul Islam FCA Shah Md Zakaria Bhuiyan FCA (446) Md Abdul Momin Khan Lohani FCA (575) Avijit Bhattacharjee FCA (824) Mostafa Kamal FCA (829) Snehasish Barua FCA (894) Md. Selim Reza FCA (939) Binoy Gopal Roy FCA (965) Kishower Amin ACA (1015) Fouzia Haque FCA (1032) Mostafa Kamal Ahmed ACA (1450)
Chairman Co-Chairman Member Member Member Member Member Member Member Member Member Member
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About SAFA South Asian Federation of Accountants (SAFA) was formed in the year 1984 to serve the accountancy profession in the South Asian Region and uphold its eminence in the world of accountancy. SAFA is an Apex Body of the South Asian Association for Regional Co-operation (SAARC) and a Acknowledged Accounting Grouping of International Federation of Accountants (IFAC). SAFA represents over 300000 accountants having membership of the national chartered accountancy and cost and management accountancy institutions in the South Asian countries namely Bangladesh, India, Maldives, Nepal, Pakistan and Sri Lanka. SAFA came into existence at the initiative of the accounting professional bodies in the South Asian Region, which has a bond of culture and homogeneity of professional environment.
Birth of SAFA The idea to form an alliance of accountancy bodies in South Asian Region was conceived by Mr Ashok Kumbhat, the then President of ICAI, at the third National Conference of Chartered Accountants of Sri Lanka held in December 1982. At the meeting of the heads of accountancy bodies from Bangladesh, India, Pakistan and Sri Lanka held in August 1984 at New Delhi, the Constitution of the Body was signed. The meeting was attended by the heads of accounting bodies in South Asian Region.
Mission of SAFA ‘SAFA as a forum of professional accountancy bodies is committed to positioning, maintaining and developing the accountancy profession in South Asian Association for Regional Co-operation (SAARC) Region and ensuring its continued eminence in the world of accountancy; in the public interest and towards broad economic development of the region.’
Objectives of SAFA SAFA shall, in the public interest work towards strengthening the accountancy profession and subserve in the interest of the broad economic development of SAARC Region. For this purpose SAFA shall undertake such functions as are necessary for achievement of its mission including the following: 1. To understand the profession in the regional context and continuously work towards its development in keeping with global trends; 2. To participate and play the leadership role on the International forums; 3. To promote harmonize accountancy profession in SAARC Region and in keeping with global development; 4. To play promotional role for the countries within its jurisdiction, where the accountancy profession does not exist or is not sufficiently developed; 5. To promote and set professional standards; 6. To act as interface between international bodies and member-bodies; 7. To promote and develop state-of-the-art research compact; and 8. To carry out such other activities as are considered incidental or ancillary to the above or considered expedient in furtherance of the development of Accountancy profession in the SAARC Region.
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Member Bodies The current membership of SAFA represents the eight professional accountancy bodies in Bangladesh, India, Nepal, Pakistan and Sri Lanka. The following shall provide background of the member bodies, philosophies supporting the growth initiatives and contribution made towards development of the profession in respective nations:
Bangladesh The Institute of Chartered Accountants of Bangladesh The Institute of Cost and Management Accountants of Bangladesh
India The Institute of Chartered Accountants of India The Institute of Cost Accountants of India
Nepal The Institute of Chartered Accountants of Nepal
Pakistan Institute of Chartered Accountants of Pakistan Institute of Chartered Accountants of Pakistan The Institute of Cost and Management Accountants of Pakistan
Sri Lanka The Institute of Chartered Accountants of Sri Lanka The Institute of Certified Management Accountants of Sri Lanka Associate Member
Maldives The Certified Practicing Accountants of Maldives
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SAFA Past Presidents Sl. No. 01. 02. 03. 04. 05. 06. 07. 08. 09. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29.
Name P.N. Shah Lakshman R. Watawala E.S.H. Dahodwala M. Yunus V. Kalyanaraman Mian Mumtaz Abdullah Habibur Rahman K.M. Agrawal N.A.L. Cabraal Ebrahim Sidat Jamal Uddin Ahmad K.R.S. Sastry Khawaja Amjad Saeed Ch. Hafizur Rahman T.S. Vishwanath Lal Nanayakkara Pir Mohammed Kalia Zahir Uddin Ahmad Ashok Chandak Badruddin Fakhri Md Nurul Hassan Mr. Sunil Goyal Mr Indrajith Fernando Syed Muhammad Shabbar Zaidi Sheikh A. Hafiz Komal B. Chitracar A.N. Raman Muhammad Rafi Abdul Mannan
From ICAI ICASL ICAP ICAB ICWAI ICMAP ICMAB ICAI ICASL ICAP ICAB ICWAI ICMAP ICMAB ICAI ICASL ICAP ICAB ICAI ICMAP ICMAB ICAI ICASL ICAP ICAB ICAN ICoAI ICMAP ICMAB
Present OďŹƒce Bearers of SAFA 2014
Vice President Mr. Arjuna Herath ICA Sri Lanka
President Mr. Subodh Kumar Agrawal ICA India
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Permanent Secretary Mr. T. Karthikeyan ICA India
Year 1984 & 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
The Institute - A Brief Outline
The Institute of Chartered Accountants of Bangladesh The Institute of Chartered Accountants of Bangladesh (ICAB) is the National Professional Accounting Body in Bangladesh, established under the Bangladesh Chartered Accountants Order, 1973 (President’s Order No. 2 of 1973) for the purpose of regulating the profession of accountants and for matters connected therewith. The vision, mission, aims and objectives of the Institute are as follows:
Vision ICAB members hold a widely respected professional accounting qualification which supports enterprise, corporate governance and sustainable growth in the business environment.
Mission To promote and regulate high quality financial reporting and auditing in Bangladesh, to develop and maintain the competence of professional accountants and enhance the reputation of the accounting profession in all sectors of the economy.
Values - Integrity: ICAB members uphold the highest professional integrity and ethical standards. - Expertise: ICAB members conduct their professional responsibilities with a high level of knowledge, competency and skill. - Transparency: ICAB members conduct their activities in a clear and transparent way. - Accountability: ICAB members must be completely responsible for their actions.
Strategic Goals Grow ICAB Student and Membership numbers, and the financial strength of the Institute – a core activity of a modern professional institute. Align with Members’ Careers - ensure that ICAB’s activities are focused on the needs of members and students throughout their careers and are equally supportive of members working in the business, practice and public sectors. Increase ICAB’s profile within Bangladesh and Internationally - promote ICAB’s reputation nationally and ultimately achieving international recognition of the Institute. Work towards achieving reciprocity with other professional bodies. SAFA INTERNATIONAL CONFERENCE 2014 |
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Further enhance the reputation for professionalism and high standards – develop, uphold and promote the highest standards of probity, integrity and professionalism as defining characteristics of membership. Ensure ICAB become compliant with requirements of IFAC (International Federation of Accountants) membership – in particular the Statements of Membership Obligations (SMOs).
Aims and Objectives To accomplish its above mentioned mission and to achieve the aims and objectives, ICAB has been endeavoring to: > Regulate the Accountancy Profession and matters connected therewith in the country > Administer is members and students > Ensure sound professional ethics and code of conduct by its members > Provide specialized training and professional expertise in Accounting, Auditing, Taxation, Corporate Laws, Management Consultancy, Information Technology and related subjects > Impart Continuing Professional Development (CPD) training to its members; > Foster acceptance and observance of International Accounting Standards/International Financial Reporting Standards (IAS/IFRS) and International Standards on Auditing/International Auditing Practices Standards (ISA/IAPS) and adopt the same in Bangladesh as Bangladesh Accounting Standards/Bangladesh Financial Reporting Standards (BAS/BFRS) and Bangladesh Standards on Auditing/Bangladesh Auditing Practices Standards (BSA/BAPS) respectively; > Keep abreast of the latest developments in Accounting techniques, Audit methodology, Information technology, Management consultancy and related fields; and > Liaise with international and regional organizations to influence the development of efficient capital markets and international trade services.
Administrative Ministry The Ministry of Commerce, Government of the People’s Republic of Bangladesh is the Administrative Ministry of the Institute of Chartered Accountants of Bangladesh.
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Governance The Council-ICAB is the supreme authority responsible for the administration and management of the Institute in accordance with the ICAB Bye-Laws 2004 subject to the provisions of P.O. No. 2 of 1973. The Council is composed of twenty members elected by the members of the Institute from its two regional constituencies in Bangladesh, every three years. The President and the Vice-Presidents of the Institute are elected by the Council every calendar year to manage the affairs of the Institute. The President who is the Chief Executive of the Institute heads the Council. The Council is assisted by various Standing and Other (Non-Standing) Committees and Boards. For the purpose of assisting the Council and the committees/Boards in matters concerning their functions, the Council is empowered to constitute Regional Committees, the members of which are elected by the general members of the respective constituencies. Currently there are two Regional Committees in Dhaka, Chittagong and Overseas Chapters, London-based UK Chapter Management Committee and Toronto-based North American Chapter. The day to day running of the Institute is delegated to the Secretariat, headed by the Secretary.
Membership As of 01 July 2014, the Institute had 1499 members of whom 1347 are residing in Bangladesh and 152 in abroad. There are 862 Fellows and 637 Associates enrolled with the Institute as of 1st July 2014. Out of 1499 members, 368 are practicing as public accountants and the rest 1131 are either serving in various key positions in public and private organizations, both at home and abroad, and self employed running their own business. However, the total number of the members is now 1511 from 1st July to date.
Services Rendered While almost all the non-practicing chartered accountants serve in key positions of various government and non-government organizations, banks, autonomous & semi-autonomous bodies, listed and other types of corporate and non-corporate entities, educational institutions, etc. within the country and abroad, the practicing Chartered Accountants mainly carry out audits of financial statements of various enterprises as public accountants under the banners of various CA firms approved by the Institute.
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Apart from specialization in traditional accounting and auditing services, CA Firms are also engaged in: • Taxation services • Information Technology • Statutory and Liquidation services • Management consultancy services encompassing, inter alia, the following areas; > Valuation of business and shares; > Designing of accounting, internal control and operational systems for organizations; and > Rendering of miscellaneous services like maintaining computerized financial accounts of companies business process re-engineering, management selection and recruitment, disinvestments of government enterprises, etc. > Due diligence study, feasibility study etc.
International Affiliation ICAB is an active member of the following international and regional accounting bodies: • The International Federation of Accountants (IFAC) • The International Accounting Standards Board (IASB) • The Confederation of Asian and Pacific Accountants (CAPA) • The South Asian Federation of Accountants (SAFA)
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MOU & MRA Currently ICAB has effective Memorandum of Understanding (MoU) and the Mutual Recognition Arrangement (MRA) with some national & international organizations. Some of those key relationships are as follows: > MoU with the Institute of Chartered Accountants in England & Wales (ICAEW) > MRA with CPA Ireland > MoU for Local Governance Support Project in Bangladesh > MoU with Office of the Comptroller & Auditor General of Bangladesh (OCAG)
ICAB Publications ICAB publications include, inter alia, a quarterly journal titled ‘The Bangladesh Accountant’ and a monthly mouthpiece ‘ICAB News Bulletin’. The Journal provides primary opportunity to publish articles by the Members of the Institute and fellow academics elsewhere. Articles on different aspects of Auditing, Accounting, Financial and Economic issues, the latest ICAB events and news items of national and international importance, particularly relevant to Accounting profession and Bangladesh economy, are published in the ICAB News Bulletin. ICAB also publishes books and booklets on accounting profession and research materials.
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SAFA INTERNATIONAL CONFERENCE 2014 PROGRAMME INAUGURAL SESSION Venue
: Hall of Fame, Bangabandhu International Conference Centre (BICC), Dhaka Day & Date : Tuesday, 09 September 2014
09:00 am
: Registration
09:45 am
: Guests and Participants take their seats
10:03 am
: Recitation from the Holy Quran
10:08 am
: Address of Welcome by Chairman Conference Committee
10:15 am
: Address by President-ICAB
10:25 am
: Address by President, SAFA
10:35 am
: Address by Special Guest CA. Subodh Kumar Agrawal, President, South Asian Federation of Accountants (SAFA)
10:55 am
: Address by the Chief Guest Mr. Tofail Ahmed MP, Hon’ble Minister, Ministry of Commerce, Government of Bangladesh
11:25 am
: Presentation of Keynote Paper
11:50 am
: Presentation of Crest
12:00 pm : Tea Break
TECHNICAL SESSION I Venue
: Celebrity Hall, Bangabandhu International Conference Centre (BICC), Dhaka Day & Date : Tuesday, 09 September 2014
12:15 pm : Guest and Participants take their seats 12:16 pm : Introduction of Keynote Speaker by Session Chairman Prof. Lakshman R Watawala, President, CMA Sri Lanka 12:20 pm : Presentation of Technical Paper ‘Public Private Partnership in Development Strategy’ by Mr. Anwaruddin Chowdhury FCA, Member Council & Past President- ICAB 12:45 pm : Floor Discussion 01:00 pm : Summing up by Session Chairman 01:15 pm : Presentation of Crest 01:25 pm : Lunch Break
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SAFA INTERNATIONAL CONFERENCE 2014 PROGRAMME TECHNICAL SESSION II Venue 02:00 pm 02:01 pm 02:05 pm 02:30 pm 02:45 pm 02:55 pm
: Celebrity Hall, Bangabandhu International Conference Centre (BICC), Dhaka Day & Date : Tuesday, 09 September 2014 : Guests and Participants take their seats : Introduction of Keynote Speaker by Session Chairman Mr. Narendra Bhattarai, ICA, Nepal : Presentation of Technical Paper ‘Chartered Accountants- Transparency and Accountability’ by Mr. Naeem Akhtar Sheikh FCA, President- ICAP : Floor Discussion : Summing up by Session Chairman : Presentation of Crest
TECHNICAL SESSION III Venue 03:05 pm 03:06 pm 03:10 pm 03:35 pm 03:50 pm 04:00 pm 04:05 pm
: Celebrity Hall, Bangabandhu International Conference Centre (BICC), Dhaka Day & Date : Tuesday, 09 September 2014 : Guests and Participants take their seats : Introduction of Keynote Speaker by Session Chairman Mr. Showkat Hossain FCA, President-ICAB : Presentation of Technical Paper ‘Business and Profession for Development Strategy’ by CA Jay Ajit Chhaira, Central Council Members, ICAI : Floor Discussion : Summing up by Session Chairman : Presentation of Crest : Tea Break
VALEDICTORY SESSION Venue 07:00 pm 07:05 pm 07:10 pm 07:15 pm 07:25 pm 07:33 pm 07:55 pm 08:05 pm 08:15 pm 09:00 pm
: Celebrity Hall, Bangabandhu International Conference Centre (BICC), Dhaka Day & Date : Tuesday, 09 September 2014 : Guests and Participants take their seats : Recitation from the Holy Quran : Address by Chairman Conference Committee : Address by Rapporteur : Address by Special Guest Mr. Hedayetullah Al Mamoon, Secretary, Ministry of Commerce, Government of Bangladesh : Address by the Chief Guest Mr. Abul Maal Abdul Muhith, MP Hon’ble Minister, Ministry of Finance, Government of Bangladesh : Presentation of Crest : Concluding Speech by President-ICAB : Cultural Programme : Dinner SAFA INTERNATIONAL CONFERENCE 2014 |
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SAFA INTERNATIONAL CONFERENCE 2014
INAUGURAL SESSION
Tuesday, 09 September 2014 11.25 pm to 11.50 pm
Accountants for Growth: Perspective South Asia
Keynote Speaker
Dr. Mustafa K. Mujeri obtained his M.A. in Economics from the University of Rajshahi in 1970; and earned M.A. and Ph.D. in Economics from McMaster University in 1974 and 1978 respectively. He has long teaching and research career at different universities and institutions at home and abroad. Before joining BIDS as the Director General in 2009, he served as the Chief Economist of the Bangladesh Bank (central bank). He has published extensively in national and international journals. He has also served in various policy making and other committees at both national and international levels. His current areas of research interest include poverty and MDGs monitoring and analysis; post-2015 development agenda; macro policy analysis
Mustafa K. Mujeri Director General Bangladesh Institute of Development Studies (BIDS)
and strategic development issues; application of modeling and quantitative techniques in development policy; public policy analysis; food security and sustainable agricultural development; energy and infrastructure issues; social development; poverty reduction
strategy
and
policy/programme
development;
monitoring and evaluation of programmes/ projects, and monetary policy analysis.
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Âť Presentation of Keynote Paper
Accountants for Growth: Perspective South Asia Mustafa K. Mujeri Director General,
Bangladesh Institute of Development Studies (BIDS)
I
ntroduction
South Asia presents an interesting case study for development. While it is the second fastest growing region in the world, it is also the home to the largest concentration of people living in poverty. Although poverty rates in South Asian countries have declined with economic growth, poverty has not fallen fast enough to significantly reduce the number of poor people in the region. Moreover, despite variations across countries, social indicators such as human development, child and maternal health, and gender parities in general have not kept up with the pace of income growth. Thus although South Asia is fast becoming an emerging global economic powerhouse, it is yet to make a significant dent in poverty, human misery and deprivations, and gender disparities. Although South Asia as a region has significant diversities in many respects and the performance of the countries differs, it is widely recognized that regional cooperation is vital for the region to prosper and fulfill the development objectives of individual countries. Along with more integrated efforts at regional cooperation, meeting the development challenges of the South Asian countries also requires a reform agenda that cuts across both domestic economies as well as the framework for regional cooperation. This, however, is not an easy task as the implementation of necessary actions is frequently weak in South Asian countries having diverse backgrounds. Furthermore, effective regional cooperation and integration takes time to develop and requires incremental, gradual and flexible implementation with visible payoffs. In the above context, the role of effective regulatory regimes is important both in furthering regional cooperation and in promoting economic growth and development since the South
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Âť Presentation of Keynote Paper
Asian countries are striving to achieve rapid progress in the quality of life of their population. In practice, regulation can take many forms. Over the years, the form of regulation policy adopted by the countries in South Asia has shifted significantly. Until the 1980s, the public sector played the key role in development in these countries with direct government involvement in productive activities by promoting industrialization through import substitution, investing directly in industry and agriculture, and by extending public ownership of enterprises. However, following the success of market liberalization and private sector led development approach, significant reforms were introduced in these economies to redefine the role of state regulation. The emphasis shifted on ensuring an undistorted policy environment in which efficient markets could operate. The current regulatory state model in South Asia implies leaving production activities to the private sector where competitive markets work well and using government regulation where significant market failure exists. In view of the changing realities, growth acceleration in South Asian countries requires creating an environment in which the private entrepreneurs, both domestic and foreign, would come forward to undertake investment and production activities on a broader scale to unleash the forces of economic growth which in turn would promote social development. An important prerequisite for creating such a conducive environment is the ready availability of credible and reliable financial information needed for taking investment and production decisions in the economy for which the contribution of the accountants is critical. This also requires effective regulatory framework for generating relevant financial and other decision making information in a credible manner.
Regulatory framework and economic growth It needs to be recognized that building effective regulatory structures in South Asian countries is not simply an issue of technical design of the regulatory instruments; it is also concerned with the quality of supporting regulatory institutions and capacity. In these countries, many of the institutions that support markets are publicly provided and the effectiveness of these regulatory institutions is an important determinant of how well the markets function. It is
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Âť Presentation of Keynote Paper
understood that the quality of regulatory governance will affect regulatory outcomes which, in turn, will create impact on economic growth. One would expect that good regulation is associated with higher economic growth. One must, however, also recognize the issue of causality. It may be argued that instead of regulatory quality determining economic growth, regulatory quality could be determined by the economy’s level of growth. Economies that grow faster are able to generate higher levels of income and are therefore able to support the development of better institutions. Alternatively, there may be simultaneity such that institutional quality generates more sustained economic growth, which in turn supports more and better regulatory institutions. For the countries of South Asia, the provision of a regulatory regime that promotes rather than constrains economic growth is therefore an important part of good governance. The ability of the state to provide effective regulatory institutions is an important determinant of how well the market and the economy will perform. Thus the impact of regulatory institutions on economic growth will depend on both the efficiency of the regulatory policies and instruments that are used and the quality of the governance processes that are practiced by the regulatory authorities. It is well known that the major function of the accountants is to produce accurate financial information. Financial information is used by all types of decision makers in both private and public sectors, for example, to take decisions regarding investment or level of spending. For getting meaningful outcomes, this information needs to be of a high standard and must be understood in a consistent manner. By profession, accountants are trained to adhere to
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consistent, high standards in producing financial information. This means that those who are interested in the information which the accounts produce, like investors in the private sector or lenders to the public sector, can trust the information that they are given and feel confident about the decisions they take. A strong and vibrant accountancy profession thus plays a fundamental role in developing the financial market and in assisting the countries in accelerating economic growth and development. An active and well-established professional accountancy body is essential to developing an accountancy profession that would be able to provide consistently high quality service in the public interest. Investing and lending, particularly in the private sector, is a vital part of national wealth creation. In the public sector, governments and donors want to be certain that the money they provide is used for its intended purpose. In both sectors, good financial information and professional ethical standards help to reduce the likelihood for corruption and improve governance, and therefore make more resources available for attaining a country’s socioeconomic objectives including poverty reduction.
Reliable financial reporting: Foundation for rapid growth in South Asia In the modern world, high quality financial information prepared by qualified accountants contributes to economic growth and development in a number of ways such as by encouraging investment, assisting the government in economic planning and taxation decisions; helping to avoid accounting scandals; supporting anti-fraud and anti-corruption efforts; assisting good governance and management control; and supporting social development and poverty reduction. Credible and reliable financial information is fundamental to investment in any economy. It builds investor confidence which, in turn, facilitates business development, contributes to employment growth, and leads to a reduction in poverty, promotes financial prosperity and inclusion, and facilitates social development. Banks and lenders are more likely to provide credit to business entities that demonstrate a commitment to reliable financial reporting and good corporate governance. An essential pillar of the financial reporting infrastructure is strong ethical and independent standards. Ethics and integrity are essential to maintaining
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public trust and confidence and in protecting public interest. The credibility of financial reporting is therefore dependent on professional accountants adhering to high standards of ethical conduct. This is the reason for adopting the IFAC Code of Ethics which establishes five fundamental values that apply to all professional accountants: integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour. For producing high-quality financial information, the need is to adopt internationally accepted standards and ensure the availability of qualified accountants who are properly trained and display high standards of ethical behaviour supported by a well-designed statutory framework for monitoring and enforcement. For the South Asian countries, rapid growth can be sustained with strong, independent professional accountancy bodies that are supported by the government and speak confidently in the public interest. Such bodies derive their authority from the quality and ethical standards of their members. As South Asia is rapidly globalizing, financial information has to be produced in a consistent and uniform manner for which accountants will have to work with the highest professional standards by upgrading their professional skills and knowledge to the global standards. The South Asian countries would derive considerable benefits from the development of a well recognized group of professionally qualified accountants. Most of these countries have active, vibrant, effective, and independent professional accountancy bodies. These national bodies are founded with guidance and support from their governments, which recognize that these bodies are critically important to economic success. Today, the members of these professional bodies function in virtually all sectors of society, including industry and commerce, public practice, public sector, and academia. In fulfilling their various roles, professional accountants serve public interest by providing high quality services while adhering to the values of integrity, transparency and expertise. In South Asia, professional accountants in public practice play a central role in contributing to improved quality of financial reporting, thus enabling existing and potential investors to take better informed decisions. It is well known
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that the investors are far more apt to invest their funds in markets that provide reliable and credible financial information. Professional accountants help to develop well-informed capital markets. Professional accountants, working as advisors, contribute to economic growth through wealth creation and financial planning services. As such, professional accountants serve the public interest by contributing to investor confidence, enhancing economic development and, ultimately, improving the financial well-being of citizens. Similarly, professional accountants employed in businesses and industry serve public interest by supporting strong governance and promoting sound financial reporting within their jurisdictions. In the public sector, professional accountants are essential to effective, efficient and ethical operation of the government and protection of the rights of citizens. Professional accountants in the public sector play a critical role in protecting public interest by promoting accountability, ensuring effective financial management and good governance. This helps to control corruption and ensure more efficient and effective use of limited public resources. Professional accountants in the public sector are also involved in supporting performance and encouraging innovation in the delivery of public services to citizens, consumers and other stakeholders. Efficient and reliable credit and capital markets are a prerequisite for ensuring economic stability and growth in the modern world. The bedrock of sound credit and capital markets is high quality and reliable financial information; information based on ethics and integrity, high quality international accounting and auditing standards, and sound judgment of professional accountants. In South Asian countries, as elsewhere in the world, an organized accountancy profession is a central element for establishing and maintaining a sound and stable financial infrastructure, attracting domestic and foreign investment, and operating the economy efficiently and effectively and in the best interest of the citizens.
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Adopting international accounting standards Available research identifies several important determinants for adopting international accounting standards, especially by the developing countries. Economic development is indeed the fundamental variable that deeply influences the development of accounting showing that it affects other functions in society. The adoption of international accounting standards is more likely to take place in countries with high economic growth. This confirms the fact that accounting development is not dissociated from economic development. There are several other factors that facilitate the adoption of international accounting standards. For example, the quality of financial information is a major ingredient in the development and efficiency of capital markets. In fact, the main challenge for adopting the international financial norms and practices lies in facilitating the stock market to operate effectively hence protecting the investors’ interests. The investors constantly need sophisticated information to gain the ability to analyze investment opportunities and optimize their choices. Similarly, understanding, interpreting and applying the international standards necessitates a certain level of education and training. Certainly, a country’s openness to the outside world does enhance economic growth; at the same time it engenders greater risks in terms of security and scale of international pressure. These pressures are reflected in the volume of economic activity. The application of internationally recognized standards reduces some of the pressures faced by the firms open to the outside world and facilitates their access to the world market. The legal system of a country is also important in adoption of the international accounting systems. In fact, accounting standards are the product of political actions and are determined by the interaction of legal practice and political culture.
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Conclusions Following the recent financial and economic crisis, the regulatory authorities in the South Asian countries have sought to improve the quality of financial disclosure and communication in the context of rapid globalization. This has led to the implementation of a set of reforms, governance practices and financial communication including the urge to put in place international accounting practices and prudential norms in the South Asian countries. These factors show that the South Asian countries are well poised to implement as well as develop and strengthen the international accounting methods. The countries have all the compulsions to adopt these practices since they are experiencing high economic growth and have high level of education and developed legal systems. Collectively considered, these countries have favourable institutional environment and macroeconomic fundamentals. For facilitating the process of transition to full adoption of evolving international accounting practices, the accounting community in these countries should explore several issues, such as what are the effects of adoption of international practices on existing domestic accounting practices; what effects do such adoption has on the macro economy; and how does the contents of international methods enable to improve accounting information in the country. The professional bodies should organize relevant skills, knowledge and abilities necessary to develop accounting as a dynamic profession along with relevant education, ethics and quality assurance norms consistent with the international standards. For ensuring effectiveness, accounting professional bodies should have a direct and strong working relationship with the government. In the South Asian context, the government’s role should be more of nurturing the accounting professional bodies, particularly in the formative years. However, such nurturing should not compromise the independence of these bodies in any manner. The government has the legislative authority to establish the accountancy profession and ensure proper oversight of the profession. The government itself should act as a major trainer of accountants to work in public financial management. As we have emphasized earlier, the ability of the state to provide effective regulatory frameworks would largely determine how well the accountants would contribute and the market and the economy would perform. Moreover, the impact of accountancy profession on economic growth will depend on both the efficiency of the regulatory policies and instruments that are used and the quality of the underlying governance processes that are practiced by the regulatory authorities.
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SAFA INTERNATIONAL CONFERENCE 2014
TECHNICAL SESSION i
Tuesday, 09th September 2014 12.20 pm to 12.45 pm
Public Private Partnership in Development Strategy
The Resource Person
Anwaruddin Chowdhury is a Member Council and Past President (2001) of the ICAB. He is presently a Director of the Confederation of Asian and Pacific Accountants (CAPA) Board for 2011-15 term and serves as Bangladesh Representative on the CAPA PSFM Committee. He served as a Technical Advisor to the IFAC Board and as Executive Secretary of SAFA. He served on SAFA CITAG and is now as Member of SAFA PAIB Committee. He served on the UNCTAD ISAR Advisory Committee and Task Force for three years and was the first Chairman of ISAR’s Workshop on Corporate Governance. He drafted the ICAB CPE Document and pioneered the Introduction of ICAB National Awards for BPAR in 2001.
Anwaruddin Chowdhury Member Council & Past President The Institute of Chartered Accountants of Bangladesh (ICAB)
He is presently engaged as DTL and Challenge Fund Manager of the UK DFID funded five year Programme on Business Finance for the Poor in Bangladesh. He was the founder Managing Director and presently serves as Technical Advisor to the Credit Rating Agency of Bangladesh Ltd. He is a founder Partner of ACNABIN, Chartered Accountants and Director of Amtras Ltd. He served as a Director of Dhaka Stock Exchange, NHFIL, and as Director of several public utility organizations. He served as Challenge Fund Manager of Remittance and Payments Partnership Project, which effected automation of Bangladesh Bank and implemented manifold innovations in financial sector services. A dedicated academic, he has been serving as a faculty for over two decades. He has prepared several technical manuals and conducted a number of training programmes for public and private sector entities, professional bodies and financial institutions He served as a resource person and presented many Technical Papers and Reports in various national and international conferences and seminars on contemporary financial, macro-economic topics and professional issues -including Infrastructure Development, Regional Integration, HR Management, Fiscal Policies, Capital Market Development, Credit Rating, MFIs and SME Reporting, Risk Management and SMPs, the IAS/IFRS and the ISA, Harmonization of Financial Reporting and Audit Practices, Corporate Governance, Professional Ethics, Implications of GATS/WTO Regime, Public Sector Accounting and Auditing, Sustainability and Integrated Reporting; Professional Vision, Innovation and Leadership. He is a Financial Management Specialist, with varied experience in the corporate, financial services and development sectors, and in the fields of professional training and academia. He specializes in economic, financial and management consultancies. A strong proponent for Harmonization of financial reporting and audit practices, Anwaruddin is now focused on strengthening PSFM and implementation of sustainability and integrated reporting in the financial and corporate sectors of Bangladesh.
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SAFA INTERNATIONAL CONFERENCE Theme ACCOUNTANTS FOR GROWTH - PERSPECTIVE SOUTH ASIA Dhaka, 9 September 2014
Technical Session-I PUBLIC PRIVATE PARTNERSHIP IN DEVELOPMENT STRATEGY
ANWARUDDIN CHOWDHURY Member Council & Past President ICAB Director, CAPA Board
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PREAMBLE
ALLAH Swt’s Revelation of the holy Quran upon Prophet Muhammad (Saw) Religious, Philosophical Perceptions of Knowledge & Accounting GATS-WTO Regime Recognition SAARC Islamabad Declaration Corporate Frauds of New Millennium – (Enron) Role of Auditors and Rating Agencies (Anderson) Strengthening CG Practices - (Regulatory Oversight) Recent Developments – Impact on CR / FR & AP Global Financial Crisis/ Economic Recession Changing Global Scenario – Euro zone Debt Crisis Regulatory Failure – Sub-prime Lending/Derivatives
G-20 Pittsburg Summit 2009 Declaration Critical Nature of Financial Markets Convergence to Globally Harmonized High Quality Independent Accounting/FR Standards (Financial Instruments) Crucial Role of Accountants in-Global Recovery & Mrkt Confd. Lessons Learnt & Way Forward 7
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CONFERENCE THEMATIC OVERVIEW
ACCOUNTANTS FOR GROWTHPERSPECTIVE SOUTH ASIA
Technical Session 窶的 Public Private Partnership in Development Strategy
Technical Session 窶的I Chartered AccountantsTransparency and Accountability
Technical Session 窶的II Business and Profession for Development Strategy
TOPIC THEMATIC OVERVIEW
PRIVATE SECTOR
PUBLIC SECTOR
DEVELOPMENT STRATEGY
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TOPIC THEMATIC OVERVIEW
INTRODUCTION - CONCEPTUAL DIMENSIONS of PPP in DEVELOPMENT STRATEGY
Topicality, Significance and Dynamics of Conference Theme Ensuring Sustainability of PPP in Development Strategy Multifaceted Aspects of PPP in Development Strategy Accountants driving economic growth through: Vision – Leadership – Ethics – Innovation – Sustainability Rationale for PPP in Development Strategy Methodologies in PPP Areas /Types of PPP Risks/Challenges in PPP Benefits / Opportunities in PPP Framework of PPP Implementation Differential Models of PPP Implementation Budgetary Allocation for PPP Way Forward for PPP in Development Strategy
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INTRODUCTION MEANING OF PUBLIC PRIVATE PARTNERSHIP The PPP is collaboration between public and private sectors, aimed at deriving synergy in implementation of projects or provision of services traditionally provided by the public sector. In PPP, the parties complement each other, in performing their tasks in the best practicable manner. PPP is a cost-effective way to establish and implement infrastructure and other projects and in delivery of public service in an optimal manner. Under PPP, each party draws its own benefit, proportionate to its interest and involvement. PPP is a service or a business venture funded, managed and operated through a partnership between government and one or more private sector agencies / entities. PPP model leverages the strengths of both the public and the private sectors and overcomes weakness of both sectors. Standard & Poor’s definition of a PPP is any medium-to-long term relationship between the public and private sectors, involving the sharing of risks and rewards of multi-sectors skills, expertise and finance to deliver desired policy outcomes.
STRATEGIC CONTEXT OF PPP FOR ACCOUNTANCY PROFESSION PPP a form of collaboration bringing resources together to achieve common objective which each acting alone cannot achieve. PPP meets the emerging challenges through collaboration between the public and private sector professional bodies (OCAG- ICAB). The Accounting professions around the globe are repositioning the reap the synergic benefit of PPP. Inclusive development require a harmonized approach for all organs of the system of financial accountability to function effectively. The accounting profession –public or private working together to improving the development strategy through Government policy standards and practices. The WB funded project on “Promoting PPP for Improved Audit Quality Assurance” between the ICAB & OCAG. Refer MoU ToR.
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RATIONALE FOR PPP
Deriving Synergy between Public and Private Sector Increase in global population by 2.3 billon to 9.3 billon in 2050 Increase in urban population by 2.6 billon to about 2.6 billon Rapid industrialization and enhanced living standards raising global economic growth and per capita GDP from US$10K to 21K
Increase globalization of supply change and regional increasing regional economic integration
Massive infrastructure, power, telecom and other project Technological innovation Development Strategy in 5 year Perspective Plans of GoB – PPP Top Priority PPP Implementation Framework in Bangladesh Legal Basis of PPP Framework in Bangladesh
AREAS OF PPP IN DEVELOPMENT STRATEGY
PPP in Transport Infrastructure PPP in Power/Energy & Mineral Resources PPP in Air Transport & Tourism PPP in Industry PPP in Health & Family Welfare PPP in E-Governance Strategy: a) b) c)
Strengthening e-Governance Framework; Increase awareness of ICT and enhance access to ICT education; ICT infrastructure development.
PPP Harmonization of Accounting Financial Reporting and Audit Practices PPP in Harmonized of Public Sector Reporting & Best CG PPP for Improved Audit Quality Assurance PPP in Implementing IPSAS & ISSAIs and IAS/IFRS & ISAs PPP in Tax Audit for Revenue Collection
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TYPES OF PRIVATE INFRASTRUCTURE PROJECTS - PPP FINANCING METHODOLOGIES
Build-Operate-Transfer Build-Own-Operate Capitalization Securitization Build and Transfer Build Lease and Transfer Build Transfer and Operate Lease Management Agreement Management Agreement Rehabilitate-Operate-Transfer Rehabilitate-Operate-Maintain Service Contract Supply-Operate-Transfer Joint Venture Agreement
BENEFITS OF PPP
Improved Project Selection Accelerated Infrastructure Provision Whole Life-cycle Cost Optimization Revenue Innovation The Government, the private sector investors and the public can all benefit if private sector involves in infrastructure development under PPP. For public sector, the likely benefits to relevant parties encompass: maintaining economic stability; private sector innovation and expertise; logical expenditure estimates; achieving desired growth rate. For private sector, the likely benefits include: expansion of business & innovation. For public/users, likely benefits cover: accountability; & more responsible Government.
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RISKS/CHALLENGES IN PPP
Restricted Control & Flexibility Transaction & Monitoring Time and Costs Regulatory Failures Incomplete Contracts Public Budget Risks There is no apparent fiduciary risk if infrastructure is developed under PPP without significant Government investment. There might be some risks related to: loss of ownership of public properties through transfer entitlement; approval of inflated costs at the time of project implementation through higher valuation; overlooking public interest when pricing the goods and services; and dysfunctional infrastructure once ownership is handed over to the government. Such risks may be reduced by formulating appropriate rules and regulations, strengthening institutional framework conducive to serve the public interest, through relevant contractual stipulations, regular monitoring by professional experts.
PPP MODELS
The PPP models vary from short-term simple management
contracts (with or without investment requirements) to longterm and very complex BOT form, to divestiture. These models vary mainly by: Ownership of capital assets; Responsibility for investment; Assumption of risks; and Duration of contract.
SPECTRUM RELATIONSHIP IN PPP
Parallel Activities - Competitive Activities Complementary Activities - Contractual Services Cooperation and Collaboration The PPP models can be classified into four broad categories
based on extent on cost and risk sharing. These include: Supply and management contracts; Trunkey projects; Lease; Concessions; and Private ownership of assets.
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PPP IMPLEMENTATION FRAMEWORK
World Economic Forums - PPP Best Practice Framework
PPP FRAMEWORK STATUS in BANGLADESH
1996 - Government adopted private sector power generation
policy to promote private sector participation. 1997 – IDCOL established to promote private sector investment IIFC established for evaluation of technical proposals 2004 - PSIG formulated as basis to boost PPP investment 2007 – IPFF setup - with BDT 4.18 billion (USD 60 million) was set up in BB to finance approved PPP infrastructure projects 2008 – Policy for private participation in power sector. 2009 - 10 Budget formally introduced PPP concept 2010 – Government promulgated Policy and Strategy for PPP, and guidelines for formulation, Appraisal and Approval of Large medium and small projects
Legal basis for the PPP under the present frameworkEffectiveness of present regulatory framework?
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PPP PARTNERS IN BANGLADESH WORKING UNDER DIFFERENT FORMS Public Sector Partners
Private Sector Partners
National Government District Administration Municipal Authorities Local Government Bodies State Owned Banks & FIs Sector Corporations &SOES State Universities and Research Organizations
Commercial Enterprises Development-Focused NGOs Cooperative Societies Community-based Organizations Religious Societies Professional Institutions Research/Academic Institutions Trade Unions - Households
ROLE OF ACCOUNTANCY PROFESSION Motivate Mindset Changes for promoting PPP in Development Strategy
between public and private sector agencies & other stakeholders Maintain regular interaction/consultation with Government agencies and private sector chamber bodies Provide necessary professional skills and expertise for PPP projects Render guidance to government policies for PPP Development Strategy Pricing of PPP tariffs for infrastructure, power and other projects Devising financial methodologies (BOO/BOT models) for PPP projects Other Roles ………………………
ICAB EXPERTISE FOR PPP IN DEVELOPMENT STRATEGY Well positioned to develop awareness of PPP benefits and challenges
to promote the implementation of PPP in public and private sectors Well equipped to provide necessary technical expertise for devising PPP strategies , tariff /pricing structures, legal basis for PPP framework Assist the Government, central bank (BB) and public sector agencies in devising PPP Development Strategy in GoB Perspectives Plan. Developed relevant knowledge, skills and professional competence for effective involvement in formulation & implementation of PPP projects Devising financial methodologies (BOO/BOT models) for PPP projects
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PROSPECTS AND OPPORTUNITIES Elucidate …………
CHALLENGES AND IMPEDIMENTS Elucidate …………
POLICY ISSUES & RECOMMENDATIONS
Composition of multi-disciplinary Task Force for prioritization
formulation and implementation of PPP projects Formulation of effective policies for monitoring-evaluation and reporting of PPP projects Financing models and methodologies for PPP projects Impact Assessment of PPP projects on GDP growth and economic development of Bangladesh Others issues and recommendations …………..
WAY FORWARD
Developing a comprehensive PPP strategy and standardized framework based on multi-stakeholders program review
Realizing the value of a strategic PPP program in the context of the national infrastructure plan Keeping flexible and realistic expectations, beyond PPPs Monitoring & evaluation of PPPs performance delivery, using WEF Best Practice Framework Others measures ………………
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CONCLUSION
PPP is a long term relationship between public and private sectors to deliver an output (performance). It is based on: Payment upon delivery; Risks allocation; VFM whole-life costing and Competition to get best value. There are many models, each with pros and cons. It is important to ensure that a national PPP program is well set up. (ADB)
Many
SAARC and ASEAN countries have successfully implemented PPP projects and increased production capacity without additional pressure on government revenue. Given the uncertain external environment, Bangladesh can raise GDP growth 10% by 2017 only if infrastructure is developed under PPP initiatives, aimed at the 2021 vision for a prosperous and developed Bangladesh.
Think global > See regional > Act local
message Lets’ Go Ahead and Enhance the Professional Image Through Implementation of PPP In Development Strategy for SocioEconomic Development and Growth of the SARRC Region !
May ALLAH’s Providence be Our Guide !!
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Appendix-1
Appendix-2 -3
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Appendix-4 WILL IR GET OFF THE GROUND ? or Will it have a spinning effect?
Looks Like –Yes,
(If so-How and When ? Implications ?) (If not –Reasons & Remedies ?)
THANK YOU
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TECHNICAL SESSION ii
Tuesday, 09 September 2014 2.05 pm to 2.30 pm
Chartered Accountants -Transparency and Accountability
The Resource Person
Mr. Naeem qualified as a Chartered Accountant in 1989 and worked as a Partner Tax in S M Masood & Co. Chartered Accountants from July 01, 1992 upto 30 April 2006.Then heleft as senior partner to form his new practice Hassan Naeem & Co. Chartered Accountants. He is an expert in the field of Taxation and is the National Partner Tax of the firm. He carries with him rich experience of two decades both in Taxation compliance & litigations. Mr. Naeem Akhter Sheikh was the member of the committee formed for Administrative Reform and restructuring of Federal Board of Revenue (FBR) by Government of Pakistan in 2001, headed by Mr. Shahid Hussain (Senior Vice President of World Bank). This committee did some instrument work which laid basis for reforms which are being carried out for last ten years and have significantly improved the performance of the Board.
Naeem Akhtar Sheikh FCA President The Institute of Chartered Accountants of Pakistan (ICAP)
He is also an expert in the field of financial management, contract negotiation and corporate finance. He has a special niche for real estate development projects and his project include successfully negotiation of real estate project worth US $ 500 Million for multi story housing complex and golf course project. He has already acted as financial advisor to Pakistan Army and was also financial advisor to Defense Housing Authority Lahore. He also holds valuable experience towards change management, corporate reorganization & research studies. He has numerous lands Mark reported cases to his credit. His Other Achievements He was elected member of Council 2009 – 2017 and of the Regional Committee 1993 - 2001. Has extensive experience of 13 years on all spheres of Professional Accounting Organisation by servingboth at regional and central level, in numerous committees and positions. As Chairman Education and Training (2012-13) developed and implemented road map for educationreforms in ICAP through restructuring of professional qualification, revision of syllabus anddevelopment of study packs. As Chairman Investigation Committee ( 2012-13) initiated reforms in investigation by suggesting more independence and transparency in the system. Has served on different regional bodies and currently is on the SAFA Board. Worked with USAID and IFC for securing funding for ICAP's education reforms project and capacitybuilding. Has diversified experience in organising international conferences, workshops and seminars of ICAP.
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Chartered Accountants – Transparency and Accountability By Mr. Naeem Akhtar Sheikh President ICAP September 9, 2014
The Institute of Chartered Accountants of Pakistan
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Societies roadmap to success Happiness & Prosperity
Professional Accountants
Economic growth
Sustainable Society
Building Public Trust
Accountability & Transparency
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Professional Accountants “A distinguishing mark of the accounting profession is its acceptance of the responsibility to act in the public interest.” - IFAC’s Code of Ethics
Building Public Trust
Accountability & Transparency
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Outline Transparency & Chartered Accountants Accountability & Chartered Accountants Way Forward for South Asia
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As public practitioners, accountants are auditors, tax consultants and business advisors
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Transparency in Accounting Profession A. Producing Quality Product B. Quality of Practice C. Auditors’ Report D. Auditor Appointment E. Audit fee - Impediment in Quality
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Transparency in Accounting Profession • Ensuring completeness & standardisation of disclosures, compliance with best international practices a well as local laws & regulations. • Ensuring Quality & effectiveness of audit.
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Transparency in Accounting Profession A. Producing Quality Product • Attracting talented students
▫ ICAP’s SDAI & extended University program ▫ National talent hunt program ▫ Extensive outreach
• Continues enhancement assessment processes • Structured Training development.
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Transparency in Accounting Profession B. Quality of Practice • Licensing & Inspection regime • Sustainable operations/Creating business opportunities • Promoting and facilitating growth of Practices • Quality Assurance system (ISQC 1)
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Transparency in Accounting Profession B. Quality of Practice: Pakistan • Practices divided into regulated & non regulated area • Regulated area be subject to practice review • Public Practice Program once in three years 1. Code of Ethics, 2. Chartered Accountants Ordinance, 1961, Chartered Accountants Bye-Laws, 1983; & 3. Applicable Technical & Professional Standards
• Compliance with the training regulations • Compliance to professional and quality control standards
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TECHNICAL SESSION III
Tuesday, 09th September 2014 12.20 pm to 12.45 pm
Business and Profession for Development Strategy
The Resource Person
B.Com., LL.B., F.C.A., A.C.M.A., M.F.M., M.B.A.(Fin.), P.G.D.F.M., M.F.C., M.Bk.M., M.Phil.(Mgt.), M.A.(Eco), M.Com.(CIM), D.B.M., D.B.F., I.S.A.(ICA), M.B.A.(Inv.), A.D.B.A., P.G.D.Maths., D.I.M., P.G.D.I.M., P.G.D.I.B., P.G.D.Ent., P.G.D.H.R.M., C.F.A.(L2)(U.S.), A.D.M.A. (London). Studied Advanced Management at Italy, Germany, U.K., U.S., China. Visiting faculty at a number of Institutes & Universities in India & abroad. Awarded by the President of India for getting first in India in Research. Also awarded by Chief Minister for Science & Research. State level winner in Painting, Singing, Elocution, Drama, etc. Participated in Akshay Kumar International Martial Arts Competition at Mumbai. Member of Civil Defence, Government of Gujarat. Selected for World Youth Peace Summit, Geneva. Represented India at various forums of Higher Education at Los Angeles, Milan, Ghunagzhou, Phuket, Paris, etc.
CA. Jay Ajit Chhaira Central Council Members The Institute of Chartered Accountants of India (ICAI)
Elected as Student leader at School, College and University level. Declared as “Star of Surat” by Health Minister, Gujarat in 2008, “Jewel in the Crown” in 2009, “SuratnaSitara” by Mayor of Surat in 2010, “Youth Icon” by leading newspaper group DainikBhaskar, 2011. Associated with ICAI activities from 1998 as active member/coopted member/ managing committee member. Climbing the ladder, elevated to the position of Chairman WICASA Surat, 2004, Chairman Surat Branch of ICAI, 2005. Elected as Regional Council Member and escalated to the position of Vice Chairman, WIRC, 2012. Elected as Central Council Member for 2013-2016. Currently, Member of Accounting Standard Board & Editorial Board, Chairman of Committee for Financial Markets & Investor’s Protection, Vice Chairman of Young Members Empowerment Committee. Worked in Committees for Direct Taxes, Indirect Taxes, International Tax, Public Relations, Women Member’s Empowerment, Finance, Research, CPE, etc. Associated with organisations like South Gujarat Chamber of Commerce and Industry, SuratManavSevaSangh, AISEC, Nature’s Club, Prayas, Rotary Club and others. Elected as the President of Rotary Club of SuratRound town 2008. Hobbies include painting, playing piano & drums, trekking, photography, singing, cricket, martial arts.
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Business and Profession for Development Strategy CA. Jay Ajit Chhaira Member Council & Past President The Institute of Chartered Accountants of India (ICAI)
W
ith the fast pace of globalization, the traditional role of professional accountants has undergone a sea change. Accountancy profession is recognized as contributing to every sector and aspect of the global economy. Today professional accountants are not solely auditors but they work in diverse field as management accountants, business leaders, corporate financiers, business advisers. Professional Accountants function in virtually all sectors of society, including industry and commerce, public practice, the public sector, and academia. In fulfilling their various roles, professional accountants serve the public interest by providing high quality services while adhering to the values of integrity, transparency and expertise.
Professional Accountants in Public Practice Professional Accountants in public practice play a central role in contributing to the improved quality of financial reporting thus enabling existing and potential investors to make better informed decisions. Investors are far more apt to invest their money in markets that promote reliable and credible financial information.
Time for Business and Profession for Development Strategy
Professional Accountants, working as auditors, help to facilitate fair well informed capital markets. Professional Accountants, working as advisors, contribute to economic growth through wealth creation and financial planning services. Professional Accountants in practice, therefore, serve the public interest by contributing to investor confidence, enhancing economic development and ultimately improving the financial well being of citizens.
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Professional Accountants in Business and Industry While there is a high awareness and appreciation of the role and importance of professional accountants in public practice, there is a less understood, but equally important need for professional accountants in business and industry to design and maintain mechanisms to assure that effective, ethical and responsible corporate governance and control is achieved. The roles that Professional Accountants in Business perform include implementing and maintaining operational and fiduciary controls, providing analytical support for strategic planning and decision making, ensuring that effective risk management processes are in place, and assisting management in setting the tone for ethical practices. The bottom line is that the performance of the Professional Accountant in Business is critical to the reputation and the credibility of the business firm, its management and the accountancy profession. In today's increasingly competitive and uncertain business environment, organizations fighting for customers face a number of factors and issues which they may not be able to control and which affect performance. Professional accountants have a vital role to play in commercial success, by using their increasingly valuable knowledge in a way which gives their organizations or clients a competitive advantage. Professional Accountants operate at many levels and in several different roles within all types of organizations. Although some accountants operate in an advisory role to management,
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Transparency in Accounting Profession C. Auditors’ Report • Public perception too many caveats • Auditor needs to take more responsibility & exercise judgment • IAASB has issued a discussion paper on the Audit Report format
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Transparency in Accounting Profession D. Auditor Appointment • Independence in appointment • Options
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Transparency in Accounting Profession E. Audit fee - Impediment in Quality • Quality has a cost • Change in the mind set Pakistan Experience • ATR -14 • CCP notice 2008
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Accountability in Accounting Profession • Investigation by Accounting Regulator • Investigation by Corporate Regulator • Public Oversight Board
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Accountability in Accounting Profession A. Challenges in Investigation • Public perception • Effectiveness of disciplinary action • Slow adjudicating process
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Accountability in Accounting Profession A. Challenges in Investigation Pakistan Experience • Independence in the Investigation process • Lessor involvement of the Council • Effective penalty regime
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Accountability in Accounting Profession B. Challenges in Investigation by Corporate Regulator
Pakistan Experience
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Accountability in Accounting Profession B. Public Oversight Board • Post Enron gave rise to public oversight in the form of: •
• Sarbanes Oxley Act etc.
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Accountability in Accounting Profession C. Public Oversight Board cont. Pakistan Experience • Quality Assurance Board • Regulators wish for more independent process • Hybrid Model ▫ ▫ ▫ ▫
Embedding the Oversight in Accounting Institutes Independence of composition Participation of all stake holders Technically supported by regulator
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Accountability in Accounting Profession PIAB Challenges to overcome • Finance leadership in organizations is largely unregulated. • Onus is on organizations to ensure they employ finance leaders:▫ Professionally competent ▫ Functionally Independent
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Accountability in Accounting Profession The CFO more accountable less accountant • Independence in appointment • Sanctity of the CFO position • Eligibility criteria in CCG
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SAFA Initiative in promoting transparency & accountability • • • •
SAFA BPA Award Guidelines for network firms Best practices on corporate governance SAFA Accounting & Financial Reporting Standards For SMEs
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Q&A
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others go on to managerial positions, within firms of accountants which they themselves may own, on the board of public limited companies, or in the public or voluntary sector. An accounting background has proved invaluable to many people who have progressed to be directors and chief executives of large multi-national companies or their own companies, as it provides them with crucial knowledge and insight into business. Professional accountants in business play crucial roles identifying and addressing unique challenges facing big, small and mid-sized enterprises in strategic management, corporate governance, risk management and internal control, financial reporting and accounting and other areas.
Professional Accountants working in Government Sector Professional Accountants are essential to the effective, efficient and ethical operation of governments and to the protection of the rights of their citizens. Professional accountants in the Government Sector play a critical role in protecting the public interest by promoting accountability, effective financial management and good governance. This helps to ward off corruption and ensure more efficient and effective use of limited public sector funds. Professional accountants in the Government Sector are involved in supporting performance and encouraging innovation in the delivery of public services to citizens, consumers and other stakeholder groups.
Professional Accountants in Capital Markets Professional Accountants are playing an important role in Capital Market operations as efficient and reliable credit and capital markets are a prerequisite for a nation’s economic stability and growth and to the health and welfare of its citizens. The bedrock of sound credit and capital markets is high quality and reliable financial information. Credible and reliable financial information is fundamental to investment. It builds investor confidence which, in turn, facilitates business development, contributes to job growth, and leads to a reduction in poverty, and individual financial prosperity.
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Banks and lenders are more likely to provide credit to business entities that demonstrate a commitment to reliable financial reporting and to good corporate governance. As business and industry prospers, so does the surrounding economy and, ultimately, the living standards of all citizens are raised. The public interest is thus served by promoting an economy where investors have the information they need to make informed decisions and where businesses can raise the capital and credit they need to hire workers and expand into new markets.
Role of Professional Accountants in Business Strategy Development and sustained growth Worldwide, more than one million professional accountants work in commerce, industry, financial services, education, and the public and not-for-profit sectors, many of whom are in positions of strategic and/or functional leadership. These professional accountants in business are well-placed to create long-term sustainable value for their organizations. Professional accountants in business have a range of skills and abilities to help their employers deal with current challenges. They can help their employers to ensure that strategy effectively connects short-term actions with long-term aspirations, and with the key drivers of sustainable success. Professional accountants support their organizations in a wide range of job functions at various levels, including: •
Leadership/management: chief executive officer (CEO); chief financial officer (CFO)/financial director (FD); chief operating officer; director of governance or operations; treasurer. SAFA INTERNATIONAL CONFERENCE 2014 |
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Operational: business unit controller; financial or performance analyst; cost accountant; resources manager; business support manager; systems analyst
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Management control: business assurance manager; risk manager; compliance manager; internal auditor
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Accounting and stakeholder communications: group controller; head of reporting; investor relations manager; financial or management accountant
Within these roles, professional accountants can be categorized as creators, enablers, preservers, and reporters of sustainable value. •
As creators of value, by taking leadership roles in the design and implementation of strategies, policies, plans, structures, and governance measures that set the course for delivering sustainable value creation.
•
As enablers of value, by informing and guiding managerial and operational decision making and implementation of strategy for achieving sustainable value creation, and the planning, monitoring, and improvement of supporting processes.
•
As preservers of value, by ensuring the protection of a sustainable value creation strategy against strategic, operational, and financial risks, and ensuring compliance with regulations, standards, and good practices.
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As reporters of value, by enabling the transparent communication of the delivery of sustainable value to stakeholders.
Professional accountants in business play a key role in the performance dimension by supporting sustainable value creation—delivering adequate returns in the short- and medium-term, while continuing to develop the organization’s competitive position so as to sustain its success. They also play a key role in the conformance dimension by facilitating compliance with relevant rules and regulations.
Skill sets required from a Professional Accountants The ability of professional accountants in business to help drive sustainable value creation is based on a range of professional skills and a particular attitude and mindset. To meet the needs of organizations, the professional accountant mindset needs to embrace five key areas.
Professionalism and ethical behavior Professional accountants should uphold high ethical standards in accordance with the Code of Ethics for Professional Accountants. They also have an important role in driving and supporting a high standard of ethics across the business, and fostering a values-based organization.
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Professional judgment Professional judgment is a differentiating factor for high-performing professional accountants. This includes balancing organizational nimbleness and quick and intuitive decision making with a need for evidence-based decisions.
Organizational and environmental awareness Professional accountants can be expected to perform as integrators and navigators by linking functional disciplines and organizational units, as well as facilitating a common and unifying perspective on an organization’s business model and key success factors. Organizational and environmental awareness and understanding are critical in helping them to perform these roles and to reconcile the detailed aspects of operational performance with the strategic aims.
An investor and wider stakeholder focus Professional accountants, particularly those in CFO/FD roles, can be expected to lead in managing relationships with investors, other funders, and regulators. They also can bring a wider stakeholder perspective into the organization to challenge managers to ensure risk and performance is managed in the long-term interests of various stakeholders.
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Change, uncertainty, and complexity Professional accountants have to be able to adapt to changing circumstances and apply professional skills and judgment to often ambiguous and imperfect information. Whether creating, enabling, preserving, or reporting sustainable value, the role of a professional accountant at all levels has evolved into one focused on managing uncertainty, complexity, and strategic decision-making, within an overall context of heightened focus on implementing effective governance, risk and control. Experience in various roles helps professional accountants strengthen the attitude and mindset that enables them to enhance their performance within organizations and, as a result, the performance of the organizations themselves.
Conclusion Today Professional Accountants are functioning in virtually all sectors of society and their role is critical to the reputation and success of the organization with whom they are associated. Professional Accountants can help the organization in developing their business strategy and in connecting short term actions with long term aspirations. Professional accountants play key roles in organization that often go far beyond the stereotypical perceptions of accountants. It may not be readily apparent to all employers and business owners, but they can capitalize on professional accountants’ training, knowledge, and skill sets to help guide their organizations toward long-term sustainable success.
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