SPEECH BY NAOKO ISHII – WORLD BANK COUNTRY DIRECTOR 30 November 2007. Members of the Head Table, Ladies and gentlemen, It is my pleasure to be here at the Institute of Chartered Accountants of Sri Lanka for the 2007 Best Annual Reports Awards competition. I would like to congratulate the ICASL for keeping up the tradition of organizing this event to recognize and reward firms that adopt relevant standards and incorporate best practices in financial reporting. The World Bank is proud to be associated with this event. The World Bank strongly supports that businesses adopt best practice financial disclosure standards. Reliable accounting is one of the key elements of transparency, accountability, and a conducive business environment. Reliable accounting helps investors make more informed investment decisions by giving them better understanding of the financial health and stability of business performance. Worldwide, the World Bank has actively encouraged and assisted countries to move from national to international accounting standards. However, we are also mindful that such a transition is a challenging undertaking. Among other things, it requires an appropriate statutory framework, effective monitoring and enforcement systems and education and training. Perhaps most importantly it also requires that the accounting profession conforms to high ethical standards. The transition to international standards is important for two reasons: First, in an increasingly globalized environment it is becoming increasingly important for investors to be able to compare firms using a globally accepted yard-stick. Secondly, international accounting standards require more stringent disclosures than national standards, thereby providing better protection for stakeholders. Sri Lanka has made considerable efforts in aligning its accounting and auditing practices with international standards. Corporate accounting and disclosure practices, particularly for publicly traded companies, have improved over the past decade. The enactment of the Sri Lanka Accounting and Auditing Standards Act and establishment of the Sri Lanka Accounting and Auditing Standards Monitoring Board were positive, early steps. Nevertheless, in order to complete the transition towards adopting international accounting standards, Sri Lanka needs to strengthen its regulatory capacity, strengthen enforcement mechanisms, and promote compliance with guidelines of the International Federation of Accountants. In this regard let me point to a possible benefit the country can derive by developing its Business Process Outsourcing (BPO) industry. As you know, the traditional outsourcing of low-skilled, low-value-added activities to developing countries is rapidly being replaced by out-sourcing of higher-skilled and higher value-added activities. According to industry-data, the global BPO market expanded by almost 60 percent in the first 9 months of 2007 alone and BPO now account for more than 40 percent of world-wide outsourcing. Going forward, I believe that the BPO industry in Sri Lanka could be further developed, and that professional institutions like the ICA would have a major role to play in ensuring a steady flow of high caliber and competent accountants to help take advantage of these global trends. In closing let me say that I believe that the work of accounting professionals and accounting bodies such as the ICA in Sri Lanka, is instrumental in establishing a sound financial reporting system in the country, which can help the country achieve its ambition of becoming a commercial and financial hub in the region. I wish to congratulate the companies that are being honored tonight, and wish you all the best for continued growth in future. Thank you. |
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