Saturday Dec 14, 2024
Saturday Dec 14, 2024
Wednesday, 22 February 2017 00:00 - - {{hitsCtrl.values.hits}}
It is an honour to share such a great profession as a Chartered Accountant (CA). A profession that has been evolved over thousands of years, weathered various storms and tested for time. Accountancy profession not only survived but also thrived to be one of the demanding professions globally.
Being an entrepreneur, it was my father who inspired me to become a Chartered Accountant. Even though I was not so studious during those days, the sudden death of my father made me determined to make his wish come true. I am really grateful to him today since he opened the way for me to enjoy such a wonderful profession.
Even during our time there was this wrong perception that becoming a Chartered Accountant was a difficult task. However, I later understood that there was no merit in such thinking. Besides that I determined to achieve something that was perceived as difficult.
During the process I realised that a CA stands out among the others because of its mandatory training requirements. We had to undergo four years of training compared to three years of training requirement today. Four years of audit firm training was the differentiator.
I always think that an audit firm is like a university in its own territory. It has got a vast knowledge platform. A kind of knowledge even you can’t gather through a renowned university. It is lively and all that practical. CAs develop co-competencies only through this audit firm training since it gives exposure to various industries, various business models, different IT applications, different management styles, etc. Not only that, it gives opportunities to build up a strong business network. It also helps to develop strong work ethics at an early stage of life.
All these together provide a strong insight to business environment. So, it is not like getting stuck in one place to complete your training requirements. Every day spent at an audit firm would be challenging and would certainly add something new to your knowledge base. The results of all these would be an industry-hardened product who is ready to go and serve the society and would finally contribute to the development of our country.
For instance in the Army you find ordinary infantry soldiers as well as specially trained and battle hardened commandos and Special Forces soldiers, who are ready to face any challenges. In a similar way a CA would stand out in their own territory. I have personally experienced what I have stated above.
Soon after completing both training and examinations within four to five years, I had the opportunity to join the international job market. By that time I only had the CA qualification though I managed to earn some other qualifications later on. This means CA qualification gave me the passport to enter to the international job market.
My international career spans from Southern African Region (Botswana) to the USA, and with the world’s number one professional accountancy firm as per the rankings at that time. The time I spent in Africa had been a pleasant memory. It was a different lifestyle with usual Friday and Saturday night barbecue parties, safari tours, etc.
The time I spent in the USA, particularly the time I spent in Manhattan, New York, was challenging and rewarding. I must mention that, I had the opportunity to work at the international head office of the world’s largest professional accounting firm during this time. It gave me the opportunity to work with the smartest of the smartest and initially I was a bit nervous thinking whether I would survive.
As once stated by late Lakshman Kadirgamar, later I understood that “the cake was duly baked at home” (The Cake that was Baked at Home, Ajita Kadirgamar). This means the education and most importantly the training that I was given back home really helped me to fulfil my work commitments without any difficulty.
The lifestyle and work ethics in New York was quite different. We had to hit between 12-16 hours during the so-called busy season. I mainly got involved with Sarbanes Oxley related work and amidst busy schedules, we enjoyed our lives also to the maximum. This busyness and complexities in the business environment made me think how such a simple barter system evolved over a period of time to become such a complex financial and economic environment. That was the time a seed had been planted in my mind that had eventually resulted in writing this article today.
Since then I started to explore for an answer. I wanted to know when the accountancy profession was started, how the money came into the system, how the currency that we use today replaced the currency in the form of metal, how the international trade was started, how the tax systems and the custom procedures were started and so on and so forth.
Even though the questions were of an economics nature, we have to understand the fact that economics and accountancy go hand in hand. I later understood these two subject areas are interdependent because without proper accounting you can’t take stock of economic activities of a nation. Without that how can you define fiscal and monetary policies of a country? Well this is a question that needs further deliberation and I would do it in a later phase of my career.
Having completed a successful tenure in New York. I came to Sri Lanka for a vacation and then again went back and started working in Philadelphia for the same firm (Philadelphia happens to be the first capital of the USA before Washington and the place where the Declaration of Independence was signed).
I was staying at an apartment just by the Rittenhouse Square Park. Right in front of my apartment, there was a public library and need not say that I took the membership. There I came across this great book written by Adam Smith, titled ‘The Wealth of Nations’. A book that was originally published in 1776. Even though I knew about this great piece of work, I never had an opportunity to read that book. I was immediately attracted to the book after going through the ‘Contents’ section and the ‘Introduction’ and this is because it answered so many questions that I had on my mind which I highlighted in an earlier paragraph.
Amidst my busy work schedule, I somehow found time to read this book. That was the book I was searching for some time. It sheds light on the famous “invisible hand” or rather the demand and supply theory, history of the economic activity of the humankind, how the simple barter system evolved over a period of time, starting of the merchandising system, tax system, international trade, various forms of currency, division of labour, specialisation, colonisation, accumulation of wealth, etc.
I believe every accountant should read this book. When you read it only you would understand without a proper accounting system at individual level, entity level and national level, economic activity of humankind wouldn’t have been developed to greater heights like this. There had been some form of accounting that supported this development.
I would not hesitate to say that the origin of accountancy goes back to the history where men and nations started accumulating wealth. It need not necessarily be the double entry accounting but a form of single entry recording method. I feel that a greater injustice has been caused upon the accountancy profession by identifying Luca Pacioli as the father of accounting since 1494 AD. There is no doubt that he is the father of the double entry accounting system but may not necessarily be the father of accounting. This statement is based on the facts that I have presented so far and also based on the facts that I am going to present below.
Even though I had a great accountancy career in the USA, I always wanted to get back and settle down in Sri Lanka. So I returned and joined BDO Partners as a partner in year 2008 when the war was at its peak. Later on I wanted to add some academic flavour to my career and then decided to follow the MBA in finance offered by the University of Colombo.
Obtaining the MBA in Finance was one of the best things that happened in my life. There I had the opportunity of meeting Bandara Rajapakse, who was a senior lecturer at that time. He once gave me a copy of a piece of research work done by him jointly with Pasan Amarasinghe. The theme of the research is ‘Accounting and Accounting Practices of Sri Lanka’.
The researchers have given reference to inscriptions related to the money transactions of Sri Lanka from the First Century to the 16th Century. Amongst all these I would like to give reference to the inscription laid down by King Mahinda the 4th (958 A.D), which says that all money receipts and payments of Maha Vihara at Anuradhapura should be recorded daily and on the basis of those a monthly report should be prepared. At the end of the year a statement needs to be prepared and it should be reported to the monks of the temple, incorporating all information in monthly reports.
A reasonable argument can be developed to say that without proper accounting how were the taxes imposed, collected and routed towards public welfare such as building tanks, establishing temples and pirivenas, maintaining currency systems, facilitating international trade with countries such as China and Arab, financing for various battles, etc. However, adequate research has not yet been carried out covering this aspect in our history. I am sure at least a well-developed single entry accounting system would have prevailed in our country.
Having deliberated on the accounting practice in Sri Lanka, let’s have a look at the history of accounting practices from an international perspective. I recently came across an article written by Dr. Richard Willis, a visiting research fellow at the University of Adelaide. According to him there are eight landmarks that had substantially contributed for evolving the accountancy profession.
It is a privilege to share such a great profession which has got acceptance across the world. Demand for Sri Lankan Chartered Accountants (CAs) got further enhanced after getting converged with the International Financial Reporting Standards (IFRS) regime. With the competencies developed on the IFRS, the international mobility of CAs increased.
It is the responsibility of the present and future accountants to safeguard the respect of this noble profession. Having a long history is not a free ride to ensure success in future; amidst dynamism in the business environment there are new skill sets an accountant has to develop to remain relevant in the profession. My next article would probably cover the changing skill set demanded from the professional accountants.
I have aligned my thoughts above for the love of our noble profession.
(The writer, FCA, CPFA (UK), ACMA, CISA, MBA (Finance) (Col.), is Head of Audit and Assurance at BDO Partners.)
