Financial Daily from THE HINDU group of publications
Thursday, Dec 02, 2004
Industry & Economy
ICWAI enthused by Pak bank move
Kolkata , Dec. 1
MEMBERS of the Institute of Cost & Works Accountants of India (ICWAI) can draw inspiration from their Pakistani counterparts, thanks to a decision by State Bank of Pakistan which is said to have gone in favour of ICMA, the body representing cost and management accountants of Pakistan.
A section of ICWAI members has already sought to draw the attention of others by referring to a message issued recently by ICMA, aimed at Pakistani accounting professionals.
The latter have been informed that the State Bank of Pakistan has amended certain regulations pertaining to corporate and commercial banking, including prudential regulations for small and medium enterprises.
The amendment has allowed banks and development financial institutions (DFIs) to accept copies of financial statements audited by practising cost and management accountants in case of a borrower other than a public company or a private company that is a subsidiary of a public company.
The development in the neighbouring country, say ICWAI sources, should be noted by professionals who are operating in India as well.
In Pakistan, the move is expected to create new opportunities for cost and management accountants.
It may be mentioned that the prudential regulations of State Bank of Pakistan for corporate /commercial banking and SMEs had prescribed that "Bank/DFIs shall, as a matter of rule, obtain a copy of financial statements duly audited by a practising Chartered Accountant, relating to the business of every borrower who is a limited company or where the exposure of a bank/DFI exceeds Rs 1 crore, for analysis and record," it was stated.
A case was taken up with the bank, and after "months of vigorous efforts and follow-up", the authorities have decided to recognise the role of practising CMAs, especially in terms of audit and certification of financial statements of borrowers.
This, the Pakistani institute has felt, is an achievement; it has also hoped that members will be able to take advantage of the opportunities that arise from this development.
ICWAI members have also referred to some measures mooted by the ICAI (Institute of Chartered Accountants of India) council, ones that may have an impact on cost and works accountants.
ICAI, for instance, has focused on capacity building measures of CA firms and has started working on ideas such as brand names.
Further, greater networking of CA firms has come into being - affiliation with other firms is being allowed under networking to enhance strength by combining turnover, expertise and location.
Besides, ICWAI sources have noted, there are suggestions such as rendering internal audit into an exclusive function for ICAI members and allowing attestation of financial statements only by CAs.
Some of these proposals - provided that ICAI members will get greater statutory avenues for practice - are expected to have a negative impact on the profession of cost accountants, it is felt.
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