By Prof. Lakshman R. Watawala
On the 33rd anniversary of the inauguration of the Association of Accounting Technicians of Sri Lanka, as its Founding President and the President of ICASL responsible for setting up AATSL, I thought to reflect on the early years and successes achieved over these three decades, at a time when we are all talking of the need for job-oriented tertiary education.
Although much prominence is given to higher education, it is rather sad that the same prominence is not given to professional education and qualifications which is the need of the day and can solve many of the problems faced by the Government in trying to provide jobs for university graduates and those after A/L and O/L.
The Institute of Chartered Accountants of Sri Lanka was set up on the recommendation of the L.M. De Silva report. A unique methodology was used by the Government, similar to other professional accounting bodies in the UK and India, where the Institute of Chartered Accountants of Sri Lanka was set up by an Act of Parliament in 1959 under the Ministry of Trade and Commerce with Government backing but operational autonomy. An initial grant of land and buildings comprising capital expenditure with an annual budgetary allocation for revenue expenditure, and income from charging a very reasonable fee from students with a provision for the Government to meet any shortfalls.
This is an example of a very valuable and viable professional educational project that was started in Sri Lanka, similar to UK professional accounting bodies and others in the South Asian region, which has indeed been a great success and produced many outstanding Chartered Accountants. This model was also behind the success of AAT Sri Lanka, but undertaken with many challenges and without receiving any capital or recurrent expenditure or other assistance; one could say that the founder brought up an orphaned child and groomed to blossom into a very successful adult. The results achieved during these three decades will show the success of the proper management and leadership served throughout this period. As the President of the Institute of Chartered Accountants of Sri Lanka from 1984 to 1987, one of the main issues that came to the Council’s attention was the Asian Development Bank 1986 Report and Master Plan on Accounting and Audit Education in Sri Lanka, which highlighted the shortage of accounting and audit personnel at middle or technician-level in Government departments, State corporations, audit firms, industrial organisations, commercial establishments and non-profit institutions. The report highlighted the need for middle or technician level accountants, the needs of which were estimated in 1986 to be 8,307 while the actual number available was 4353, creating a shortfall of 3954. They projected the number of accounting technicians required by 1990 to be 9350, 10,839 by 1995 and 12,566 by the 2000.
Over the past three decades, AAT Sri Lanka has provided professionally qualified and technically trained accounting technicians to the country, capable of performing all the functions required of them with the knowledge and expertise required for the 21st century. As it moves into its 33rd year, the Institute is gearing itself to meet the toughest demands of a competitive and dynamic environment
I was strongly of the opinion that an accounting technician body was needed, and the Governing Council of ICASL deliberated on the institute taking the lead in setting one up. However, it was found that the Auditor General too wanted to set up an accounting technician body under his control. The Auditor General was a member of the ICASL Council by statute, which resulted in conflicts subsequently arising in setting up said entity. I suggested that ICASL, as the prime accounting body in Sri Lanka, should set up the accounting technician body, despite fervent protests from the Auditor General who stated that ICASL had no power to do such a thing. However, the Council finally decided to support my suggestion.
We also had to decide the method of setting up the body. One option was to have it incorporated by an Act of Parliament similar to ICASL, and the other was to set it up as a company limited by guarantee, similar to AAT UK, but controlled by ICASL. The Council decided to go the way of AATUK, where all the professional accounting bodies had come together to create the AAT body under the Registrar of Companies as non-profit institution limited by guarantee. The use of the words “Sri Lanka” was also approved by the Minister of Trade.
And so the lawyers incorporated AATSL. The ICASL Council then appointed the new council of the AATSL, where I was appointed President, and the late Dayalan Tharmaratnam Vice President. Council members included M.N.G.C. Perera, H.G. Fonseka, N.A.L. Cabraal, S.M. Pasupathi and H.G. Dayananda. All were members of the ICASL Council.
Although AATSL was set up by ICASL under my leadership, they were forbidden from using the word “sponsored” and with great difficulty managed to use the words “on the initiative of the Institute Of Chartered Accountants of Sri Lanka” which still continues. Thereafter, A.W. Ariyadasa came in as the Vice President of AATSL; he was also the Vice President of ICASL and a great strength in preparing the syllabus and examinations in June 1988, where a total of 3000 students sat the exam, with registrations of around 3250. A ceremony was held at the BMICH to award 864 of these, who obtained initial membership. There were also seven members nominated from Government ministries to serve on the Council, bringing the total of Council members to 15.
All these were finalised in 1987, the last of my four years as President, completing two two-year terms. Once the AATSL was set up, I was given the Memorandum and Articles of Association and the newly-appointed Council.
However, no funding was allocated to AATSL, not even an office or staff – a very strange attitude of ICASL. This did not deter me nor the AATSL Council, and we went ahead with determination to commence a new project to take accounting to rural areas and provide them the ability to progress toward chartered accountancy. I remember we also applied to remove the words “Limited”, for which approval was granted.
AAT Sri Lanka was a company limited by guarantee and a non-profit-making institution without capital or funds. The ADB, which was engaged in the study, had pledged to give a loan of Rs. 800 million to the Government to set up the project. However, the Government did not make this available to ICASL, although it was an institute set up by an Act of Parliament and came under the Trade and Commerce Ministry. Nevertheless, we were able to save the Government from adding Rs. 800 million, a sum today worth billions of rupees, to the existing debts of the country, which were a major problem faced by the Government.
AATSL is strong financially, although it started with zero capital when the founding president only had the Memorandum and Articles of Association in hand with no money or even a place to set up office. Founding President Prof. Lakshman R. Watawala, Vice-President A.W. Ariyadasa and the Council were determined to make it a success, sacrificing their time and money and procuring financial assistance from donors to start the project. Special mention should be made of M. Manoharan, Chartered Accountant and a past President of the OPA, when he made available a room in the Professional Overseas Services Centre at Albert Crescent (of which I too was a director), enabling us to commence our activities and meet regularly. We were able to obtain donations and in the first year received Rs. 157,500, and when student and member registrations started we collected Rs. 949,625. We provided our services free of charge and were able to finalise the syllabus and examinations, that we were able to conduct with the assistance of the Examinations Department. The first exam was conducted in June 1988.
Affordability is a key challenge in attracting students for private tertiary education programs. AAT’s inclusive approach to education characterised by cost-effective fee structures, trilingual examinations and an extensive geographical reach has enabled students from rural and low-income families to obtain the AAT qualification, thereafter choosing a professional qualification with exemptions in Chartered, CMA, CIMA or ACCA
Through the years of its operation, AAT Sri Lanka has gained recognition as an institute that provides both affordable and market-oriented skills as well as training for newcomers and accounting professionals, equipping them with the knowledge and skills required to succeed in life.
AAT Sri Lanka was registered under the Companies Act No. 17 of 1982 and re-registered under the new Companies Act No. 7 of 2007 as a company limited by guarantee. Two years after its incorporation, the Institute was admitted to the Associate Membership of the International Federation of Accountants, the apex body for global accountants, comprising 125 countries including those from UK, USA, Australia. It obtained full membership 28 years later in 2017, a creditable achievement for Sri Lanka.
AAT Sri Lanka also has the distinction of being the first Associate Member of the Confederation of Asian and Pacific Accountants (CAPA), a leading network of accounting bodies in the region since September 1989, receiving its full membership in 2015 after 26 years.
The outstanding achievements of AATSL is attributed to the sacrifice and dedication of the Founder Prof. Lakshman R. Watawala, the founding Council and the presidents and Councils whose contributions are evident in the figures taken from the 2018/2019 Annual Report below.
AATSL has been at the forefront of developing the country’s middle or technician level accounting professionals, adopting an inclusive approach to education. As at today, it has registered 332,000 students, a membership of 5650, and 34,000 students operating through a network of 106 islandwide Accredited Education Centres (AECs). It has produced 35,000 passed finalists, with 14,526 students registering for the year. During the year there were 2,044 passed finalists.
Having begun with zero capital in 1988, the AATSL now has a strong financial position, with its own land and a four-storeyed building at Elvitigala Mawatha. The land was purchased and built during the initial period using its own funds, which as at 31 March 2019 stands at an accumulated value of Rs. 648 million with total assets of Rs. 792 million. The turnover for the year was Rs. 275 million with a net profit of Rs. 61 million.
Institutions such as AAT Sri Lanka were required to take the lead in drawing G.C.E. (O/L) and G.C.E. (A/L) students to a professional qualification as an alternative route to tertiary education, to develop their skills and competencies via practical training while studying, and thereafter obtain a good job either in the private or public sector.
Given the constraints faced by the university system in admitting students with a delay of over a year at minimum, this is of paramount importance. State university students also graduate much later than those who commence professional courses at ICASL, CMA, CIMA, ACCA while in school and continue uninterrupted to a qualification by age 21 or 22. The professional education being conducted alongside practical training in business organisations and audit firms enables students to put their theoretical knowledge into practice and obtain a job very easily.
Affordability is a key challenge in attracting students for private tertiary education programs. AAT’s inclusive approach to education characterised by cost-effective fee structures, trilingual examinations and an extensive geographical reach has enabled students from rural and low-income families to obtain the AAT qualification, thereafter choosing a professional qualification with exemptions in Chartered, CMA, CIMA or ACCA.
Some of the opportunities for accounting technicians lie in initiatives taken by the Government to build awareness on the ‘Self Employment Promotion Initiative (SEPI)’, as well as the SEPI loan scheme, increase in the number of SMEs, increasing demand for mid-level accountants in new industry sectors such as BPO and IT, and specialised training in the areas of BPO, SME, multinational and public sector. These also help bridge the gap between the requirements of job creators and the expectations of job seekers.
Over the past three decades, AAT Sri Lanka has provided professionally qualified and technically trained accounting technicians to the country, capable of performing all the functions required of them with the knowledge and expertise required for the 21st century. As it moves into its 33rd year, the Institute is gearing itself to meet the toughest demands of a competitive and dynamic environment.
The staff members who have contributed from the initial stages to dedicate themselves to build AATSL from scratch and realise the objectives of the founding fathers deserve special mention and appreciation. Today, the skills, attitudes and work ethics of the 68-strong AAT staff is vital in driving strategic aspirations and inspiring youth in the right direction.
ICASL, the major body controlling the appointment of the Council members, has nominated exceptional members and past presidents who have contributed to the success of AATSL. It should be noted that AATSL from its inception, with our intervention, has provided all passed finalists the opportunity to do the chartered exam, which has now been expanded to the other professional accounting bodies CMA Sri Lanka, CIMA and ACCA. Having led ICASL and founded AATSL, I can proudly state that the setting up of AATSL and its success should be used to provide more opportunities to youth at technician level, with a pathway to becoming a professional that can be begun from the O/L exam. A most cost-effective scheme catering to inclusive education and attaining global recognition, which is indeed a great honour for Sri Lanka.