History of CIMA Sri Lanka

History of CIMA, UK

CIMA, which originally started in England in 1919 as the Institute of Cost and Works Accountants (ICWA), is one of the oldest accounting bodies in the world. 

The main object of the institute was to establish a new profession of cost accountants to handle the up and coming areas of costs of industrial activity, analyse those costs using new and comparable techniques and present reports to assist those responsible for industrial and commercial activity with a view to using accountancy as a means to increasing productivity. 

The name of the new institute implied that the emphasis was accounting for the cost of production and the cost of industrial work in industry as against the stewardship function of auditing, book keeping and recording of financial transactions to highlight profit and loss and assets and liabilities of business enterprises which was the main preoccupation of the members of the financial accounting fraternity, mainly of the members of the Institutes of Chartered Accountants throughout the Commonwealth who historically started as bookkeepers.

At the second stage of development, as the demands of the entrepreneurs increasingly changed, the cost accountants came up with innovative accounting techniques to use the cost figures to help management to achieve greater cost benefits. That function in good time came to be identified as management accounting. To keep in line with the changes in the name, ICWA was changed to ICMA, the Institute of Cost and Management Accountants, in 1972. And in 1986 by virtue of the grant of a Royal Charter the name of the Institute was once again changed, this time to CIMA, the Chartered Institute of Management Accountants. Today, CIMA is one of the largest accounting bodies in the world with over 100,000 Associate and Fellow Members spread over 174 countries where CIMA conducts its examinations.

 

The two cofounders in Ceylon 

Fifty years ago in September 1965 Frank Hayhurst and M. T. A. Furkhan, the Deputy General Manager and Chief Accountant respectively of one of the three largest conglomerates in Ceylon at that time, Walker Sons and Company Ltd., were at a business lunch organised by the Ceylon Chamber of Commerce at the Ceylinco Hotel. The Chief Guest at the function was the late L.A. Weerasinghe, the first President of the newly-formed Institute of Chartered Accountants of Ceylon, which was the successor to the Board of Registered Accountants – the original official accounting body in the country. 

In the course of the lunch, the late L.A. Weerasinghe said words to the effect “the more important challenges in the accounting profession in the country should be handled by chartered accountants, leaving the mundane functions of accounting to other professionals such as book keepers and cost accountants”! That stunned both Frank Hayhurst and M. T. A. Furkhan, who looked at each other in utter bewilderment. That was the trigger that lit the fuse.

That same afternoon, Frank Hayhurst and M. T. A. Furkhan had a private meeting at Frank’s office and discussed the implications of Weerasinghe’s remark which indicated to them that the cost accountants’ profession and their duties and responsibilities were not fully understood or appreciated even amongst the accounting fraternity. 

The two of them felt that this was not a healthy situation and therefore some positive action had to be taken in order to establish the correct role of the cost accountants in the accounting framework. They immediately decided that the answer was to get together with all the other ICWA qualified cost accountants resident in the country, form an association as a legal entity, promote the new profession to spread the knowledge about the profession, encourage newer entrants to the profession by visiting leading schools, organise and conduct classes for the examinations of the ICWA and generally do all that is necessary to establish an active Institute for Cost Accountants in Ceylon, thanks to L. A. Weerasinghe!

 

The founding

M. T. A. Furkhan being a Ceylonese volunteered to contact all the qualified cost accountants living in Sri Lanka and to summon a meeting to outline the above ideas, and Frank Hayhurst readily agreed to provide the leadership both locally and overseas. They recruited an “in-house” ally K. V. Kandarajah, ACWA who was the Deputy Chief Accountant of Walkers who readily agreed to assist. 

M.T.A. Furkhan being a UK qualified Chartered Secretary as well quickly drafted a Constitution which was vetted and approved by a lawyer friend. The first meeting took place on 1 October 1965 at which about 15 cost accountants turned up and approved the new Constitution. By unanimous decisions a full set of Office Bearers including Frank Hayhurst as President and M. T. A. Furkhan as Vice President plus a Hony. Secretary, Hony. Treasurer, and an Executive Committee were duly appointed.

M. T. A. Furkhan had got ready a Scroll and obtained the signatures of all those who were present at the meeting on 1 October, and later the signatures of others who were not present at the inaugural meeting were obtained to have in place a unique document recording the historical event. The 21 names of the members who signed the Scroll as pioneers in forming the association were F. V. Hayhurst, M. T. A. Furkhan, H. Dhanapala, O. Gunawardena, K. S. Venkataraman, M. V. Theagarajah, V. B. V. de Costa, M. T. M. Hamza, M. S. M. Thawfeek, P. Sivapalan, K. V. Kandarajah, P. Ramasamy, P. N. Wickramasuriya, S. Thillairajah, P. S. Mahawatte, E. de S. Wickramaratne, I. R. Peries, S. W. Nelson, Miss. G. de Alwis, M. J. Alles, and A. W. P. Samarasinghe. That Scroll has adorned one of the walls of the CIMA Members’ Room at Elvitigala Mawatha for the last 30 years.

A new institute was set up and a new profession was established in Sri Lanka, by the efforts of two men who were inspired by an innocent comment made at a business lunch by a highly-respected member of the accounting profession.

Both Frank Hayhurst and M. T. A. Furkhan were thereafter very active in organising seminars, lectures, and frequent get-togethers, to give publicity to the new Association. One of the most important items on the Agenda of the new Association, named Association of Cost and Works Accountants of Ceylon (ACWAC) was to organise classes for the new students who were given every assistance to register with the ICWA UK and follow lectures. 

The first set of classes were organised by M. T. A. Furkhan by renting classrooms at his old School, Zahira College, Colombo. Beginning June 1966 two six-month courses were offered by the new Association for two parts of the Examinations, and in the second year lectures for the Part III Examinations too were conducted. A number of the cost accountants enthusiastically supported the project by offering their services to lecture at the classes free of charge in the subjects that they were competent in. The first set of lecturers were Frank Hayhurst, M. T. A. Furkhan, A. N. Jayatheva, P. Ramasamy, K. V. Kandarajah, Vernon B. de Costa and M. V. Theagarajah.

Much to the surprise of everyone the demand for entry into the new profession exceeded all expectations. By the second year there were 207 new student enrolments. It was a meteoric rise all the way, there was no looking back.

Both, Frank Hayhurst and M. T. A. Furkhan also offered their services to lecture at other institutions, starting with the Institute of Chartered Accountants, the Ceylon Technical College, and as visiting lecturers at Aquinas. Before long the demand being so great, commercial establishments entered the tution providing field which in a way relieved the new Association of the burden as the numbers for ICWA classes were so large virtually making it impossible for the Association to handle the classes alone.

The affairs of the Association were initially handled from the office of the Chief Accountant of Walker Sons and Company Ltd., where after hours, both M. T. A. Furkhan and K. V. Kandarajah were able to attend to the clerical and other functions. It was realised that one of the greatest needs of the students was the text books which in addition to being expensive were not readily available in the country. The first cupboard to start a Library was donated by M. T. A. Furkhan which was housed initially at his office at Walkers.

 

A viable institution

Before long the Association was able to stand on its own feet financially and moved to its first rented office premises on the first floor of a building in Galle Road, Bambalapitiya, where the most important feature was the provision of a Library, with borrowing and study facilities for students. In the ensuing years ACWAC in Sri Lanka took off like a house on fire as the number of students increased exponentially and so did the membership. Fortunately, due to the hyperactive economic activities in the country at that time, there was a demand for accountants which enabled the newly qualified cost accountants to readily find suitable employment in industry and commerce. 

From the very beginning Frank Hayhurst was in touch with the ICWA UK to keep them informed of the developments of the new body in Ceylon. The response from UK was excellent in that they gave every encouragement. Unfortunately, they could not readily offer official status as the local Institute had only just started and there were no provisions in the UK Constitution to accommodate newly-started overseas Associations. However, they gave every support as they saw the potential when they realised the phenomenal increase in the student registrations in a short time. 

The presence of an Englishman member in the country at that time was a blessing as Frank Hayhurst with his amiable personality was an excellent leader who held the new outfit of enthusiastic Ceylonese together. He together with M. T. A. Furkhan were always there to guide the new Association which undoubtedly had to face many a challenging situation.

 

Branch status

After four years Frank Hayhurst left the country in 1969, and as soon as he reached UK, he made his presence in the affairs of the UK Institute and it was not long before he was elected the President of CIMA UK. Those who remained in Sri Lanka, especially M. T. A. Furkhan and his colleagues actively pursued the development of the profession in the island. 

On the departure of Frank Hayhurst from the Island in 1969, by a unanimous decision P. N. Wickramasuriya was appointed the President of the new Association to give an opportunity for a non-Walkers person to be at the helm of the affairs of the Institute. M. T. A. Furkhan continued as Vice President and succeeded P. N. Wickramasuriya as President in 1971. He served the Association for 10 years in all, six years as Vice President and four years as President. It was during his period as President that he lobbied and secured the official recognition of Branch Status, which made him the first Branch President. He is also the only member who was elected President twice, the first time from 1971-1974 and again by invitation for a year in 1982-1983. 

 

CIMA, SL – A creditable performance

CIMA Sri Lanka is a unique institution for any developing country in the world in that with no assistance whatsoever from the State, through the noble voluntary efforts of dedicated men and women, over 50 years they have educated more than 100,000 Sri Lankans in accountancy and allied subjects to work in the accountancy profession here and abroad. From a cost benefit point of view the foreign exchange received from CIMA part and fully qualified Sri Lankans living abroad far outweighs the foreign exchange spent on registration of students, examinations and membership fees. Up to now about 7,000 Sri Lankans have completed the CIMA Examinations, of whom only half are currently resident in Sri Lanka. The other half described as “an International Accounting Mafia” by the London Economist are some of the finest unofficial Ambassadors of our country overseas.

CIMA Sri Lanka Chapter is a living testimony and a lasting monument to enterprise in education, and in the annals of Sri Lankan and perhaps world history this stands as a unique testimony for the most cost effective and unparalleled private sector effort in national development.

The yeoman services rendered by the two Founders, Hayhurst and Furkhan, and the other 19 Pioneers, the Members of the Executive Committees and Councils since and very importantly the dedication and tireless efforts of every single Past President and Divisional Director and CIMA Staff in the formation, promotion and development of the management accountancy profession in Sri Lanka should be acknowledged and remain written in gold letters for posterity as a shining example of public service.