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| Sunday, 19 May 2002 |
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'Go back to basics to understand auditor's role' We should go back to basics and understand the fundamentals to enhance our knowledge of the role of auditors, was the view of panellists at the SEC consultation on the role of auditors, organised by the Securities and Exchange commission (SEC) of Sri Lanka. Ceylon Chamber of Commerce Chairman Chandra Jayaratna said: "Nobody, not even the auditor, understands the role of the auditor. "Large shareholders do not come for annual general meetings. They do not question or challenge the accounts. Though regulators write letters to the auditors, most of the time they pick on superficial issues rather than concentrating on core issues," he said. He said that companies should go back to basics to understand the fundamentals and increase their knowledge to understand the role of auditors. Chairman Colombo Stock Exchange Ajith Gunawardene, endorsing the views of Mr Jayaratna, said auditors have to play a straight-forward role, considering the needs of all stakeholders. Director Phoenix Ventures Trevin Jayasekera said: "We have to take a proactive approach and the task should be to assess the risk. We do not have a problem with our accounting standards, but we should be more transparent and build up confidence". Attorney At Law Dr Wickrama Weerasooria said Sri Lankans are very lucky as there is no litigation since we practise the Roman Dutch Law. He said that there are a number of grey areas in the Sri Lankan system. People who have sued takeovers, lenders, prospective investors and guarantors in lending have lost their cases. Senior Partner PricewaterhouseCoopers Deva Rodrigo said that no amount of rules and regulations will look after the independence of an auditor since it is a mindset that has to be developed. Retired Precedent Partner of KPMG Ford Rhodes Thornton and Co. G.C.B. Wijesinghe addressed the gathering on 'The changing role of Auditors -International trends and their relevance to Sri Lanka'. He said that in the West, the obligation of the auditor is to the state while in the East, it is to the family. Mr Wijesinghe said that since auditing can be a bit of a negative exercise, there should be a multi-cultural approach to auditing. The degree of assurance the report gives to stakeholders depends on the individual companies. "Therefore, leverage on the knowledge to create value." Mr Wijesinghe said that auditors were earlier involved only with accounting, but now the scenario has changed and it is multi-disciplinary. He said that prescribing structures is not adequate since the pre-requisite is good men to ensure good corporate governance. Mr Wijesinghe said that the three pillars of corporate governance are transparency, accountability and a true and fair view. Expressing his views on the audit reports per say, he said that it is an expression of opinion and not a certificate as the auditor has to rely on information which he/she cannot clarify. |
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