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28 February 2012
According to the World Bank, there is need for high quality financial management in the public sector to provide the foundation for financial stability and growth in a country. Jennifer Thomson, Manager of Financial Management at the World Bank, urged countries to consider moving to more sophisticated accrual-based accounting and robust auditing systems to strengthen fiscal transparency and improve accountability, thus achieving good financial governance. Bangladesh, with its public sector operating mostly on the cash-based system, is considering this reform.
The Institute of Charetered Accountants of Bangladesh (ICAB), having seen other countries successfully switch to accrual accounting and keen to see the same happen for Bangladesh, organised a public sector financial mangement conference in Dhaka, Bangladesh on 23 February 2012. The conference, titled "Strengthening Bangladesh Public Sector Acounting & Auditing - Global Reforms and The Way Forward" aimed to demonstrate to public sector officials the benefits of moving to accrual-based accounting and to share other country's experiences in this reform.
The Confederation of Asian and Pacific Accountants (CAPA) fully supported the ICAB's initiative to improve Bangladesh's public sector financial management and was a co-organiser of the conference. This high-level conference, attended by over 400 officials and individuals invloved in public sector financial management from Bangladesh and other countries in the Asia-Pacific region, was inaugurated by AMA Muhith, Minister of Finance of Bangladesh, and GM Quader, Minister of Commerce of Bangladesh.
Supporting this conference is part of CAPA's continued efforts in promoting high quality public sector financial management and the adoption of International Public Sector Accounting Standards (IPSAS). It is the second conference of such nature supported by CAPA; the first was jointly organised with the Korean Institute of Certified Public Accountants back in May 2011 in Seoul, Korea. In his welcome remarks, CAPA President, Keith Wedlock, shared the story of the New Zealand government's change from cash-based to accrual-based accounting, and what was achievable today due to that change in terms of managing the country's finances.
CAPA Chief Executive, Brian Blood, who spoke at a technical session, stressed that failure to implement high quality financial management could lead to a crisis, as seen during the recent global financial crisis. He stated that only accrual-based accounting systems can provide the information needed for effective decision-making to support high performance in service delivery and sustainable economic growth. "The journey towards the goal may not be easy, but with strong will of the government, it can be done," he added.
Bangladesh Finance Minister, AMA Muhith said that Bangladesh faces many challenges in the standard and performance of public accounting and calls for a shift in the country's accounting methods. He agreed that the switch from a cash-based to accrual-based accounting system for the country will require a substantial mindset change and this will not be easy within the government.
ICAB President, Md. Syful Islam said, as a partner of Bangladesh's National Vision-2021, ICAB will extend unending support on issues affecting national economic development, and ensure that we will be at the forefront in the implementation process of the switch from cash-based to accrual-based accounting, as well as aligning the audit regime to international standards".
Materials from the conference can be found in the CAPA website Library under the Public Sector Accounting section at: http://www.capa.com.my/article.cfm?id=562
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