INTRODUCTION
The theme for Accountants’ Week, “Promoting Accountability – An Imperative for Economic Development”, was largely influenced by the International Federation of Accountants (IFAC) “Accountability Now” initiative as well as the global movement towards improving financial reporting within the public sector.
The theme is also in keeping with the first object of the ICAEC as articulated in the ICAEC Agreement Act: “to promote, foster and maintain the highest standards of accounting in public practice, the public sector, the commercial and industrial spheres.”
While the ICAEC has done some work in the private sector promoting the use of International Financial Reporting Standards, we have had very little involvement with the public sector. This will have to change.
As taxpayers, we provide resources to our government for running the country. It is imperative that the government not only account for those resources, but it must do so in a timely manner. As resource providers, we have a right to receive financial statements that indicate how our tax dollars were spent. We are also entitled to receive reports on control and performance deficiencies that arise from the reviews performed by the government Audit Department.
In the Caribbean, the last financial crisis brought to light the fragility of the economies of the countries in the region and the institutional weaknesses of governments that are highly indebted and the challenges of managing and forecasting public sector expenditures and revenues. The journey towards high quality public financial reporting begins with governments adopting and implementing internationally-recognized financial reporting standards – IPSAS – that comprehensively capture their financial performance and position. The benefits of adopting and implementing IPSAS by government in the region and globally include:
• More effective and efficient management of public resources as a result of better informed public policymaking based on enhanced financial reporting will give rise to a widening range of quality public services, sustainable economic growth, and increased employment;
• More fiscal transparency, better assessment of public sector effectiveness and efficiency and increased public trust; and ultimately
• A better opportunity to tackle poverty and inequality.
Professional Accountancy Organizations such as the ICAEC can play a critical role in advocating and supporting the improvement of quality financial reporting and to contribute to national efforts to enhance accountability by supporting the implementation of accounting and auditing standards.
We aim to play our part in encouraging our government to take the necessary steps towards improvement of public sector financial management.
WHAT IS A CHARTERED ACCOUNTANT?
The International Federation of Accountants (IFAC) is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of over 175 members and associates in more than 130 countries and jurisdictions, representing almost 3 million accountants in public practice, education, government service, industry, and commerce.
The groupings that comprise IFAC are known as institutes or associations and the members of these groupings are called accountants or chartered accountants. The accounting profession has long been challenged by its origins and many people, who are not members of any accounting institute, refer to themselves as “accountants”. To distinguish their members from the unqualified people who wish to associate themselves with the profession, the professional bodies have adopted the nomenclature “chartered accountant”.
In the Eastern Caribbean, the profession is governed by the Institute of Chartered Accountants of the Eastern Caribbean (ICAEC) and its members are authorized by law to refer to themselves as chartered accountants. The Institute of Chartered Accountants of the Eastern Caribbean Agreement Act restricts anyone who is not a member of the Institute from using “Chartered Accountant” in relation to their activities related to accountancy.
To obtain membership of ICAEC, one must be a member of any of the international accounting bodies recognized by the Act, such as the Association of Certified Public Accountants (U.S.), the Institute of Chartered Accountants in England & Wales, and the Association of Chartered Certified Accountants.
A chartered accountant is a highly-trained professional who is engaged in all areas of business and finance, including taxation, audit, accounting, and management, generally. They are employed in both the public (government entities) and private sector, where some are engaged in public practice work. Those in practice are required to have practicing certificates from their professional bodies and only those persons are authorized to issue audit reports. Practicing certificates are renewed by their professional bodies annually and in order to get these renewed, members must undertake a minimum level of continuing professional development each year.
Each year, the ICAEC publishes the list of its members who hold practicing certificates. In Saint Lucia, this list can be obtained from the local branch at Mercury Court, Choc Estate, by email: [email protected] or by calling telephone number: 758 450 2205.
BUSINESS CONTINUITY AND RECOVERY PLANNING
Have you given any thought as to how your business will continue after a significant hurricane? In the absence of adequate arrangements, you stand to lose the entire investment that you have made in your business.
We take a brief look at some of the issues that need to be considered in getting your business up and running following a hurricane. This takes us to the concept of Business Continuity Planning and Recovery Planning.
What exactly is a Business Continuity Planning and Recovery?
Business Continuity involves the day-to-day processes that allow a business to meet the needs of its customers and other stakeholders, such as suppliers following a disaster, until it can return to normal operations. The following need to be considered:
1. There should be an internal communication plan for the IT department to run up-to-date back-ups of data and for employees to secure the building and equipment and business records;
2. You will need to identify the critical services and products that need to be delivered within the shortest possible time following a disaster as well as the supporting processes. In the case of someone who is running a grocery shop, for example, a critical service would be ensuring that items such as canned foods and water are available for sale;
3. It is necessary that the resources that will be required for the recovery efforts be identified:
• The personnel who will be required for the critical services and products and how they will be able to commute to work;
• A communication system for keeping in touch with employees and other stakeholders during and after the disaster. A call tree is recommended where individuals are assigned to communicate with other individuals. In that way, many people can be reached in a short time.
• The equipment that will be necessary, for example, computers, standby power facilities;
• Alternative accommodation arrangements for the recovery process should your building get destroyed;
• Security arrangements immediately after the disaster to protect property and reduce the incidence of theft;
• Arrangements for standby credit facilities in order that financing may be processed within the shortest possible time; and
• Insurance arrangements.
It is important that all employees are briefed about the plan so as to ensure that they understand their responsibilities. Depending on the size of your business, you may wish to create separate teams, for example, a Recovery Management team and a Communications Team. It is advisable that the plan be tested at least annually. A desktop approach may be used, in which case a scenario is presented and people are asked to act out their responses.