| Username |
Post |
| Prajesh |
Posted
on 07-Feb-04 11:50 AM
NRB to be audited by a foreign company
The government has appointed a foreign company, Lodha, to perform the auditing of Nepal Rastra Bank (NRB). Lodha, is an Indian partner of BDO which is an international auditing corporation, a report said Friday.
This ‘special auditing’ is to find out if the accounting and auditing processes adopted by the NRB are of international standards. The key donors of the NRB, International Monetary Fond (IMF) and World Bank (WB) have been criticizing the apex bank for its poor accounting and auditing processes.
However, a few economists and government officials have flayed the idea of inviting foreign companies to perform auditing in the central bank as it would leak ‘the secrecy’.
Moreover, the IMF had suggested Nepal, in 2001, to carryout auditing in the NRB from an international company prior to Nepal’s participation in the Poverty Reduction and Growth Facility (PRGF) program. Noteworthy, Nepal got permission to participate in the PRGF program only after its acceptance to perform auditing in the NRB from an international company.
Earlier, the Auditor General Office used to audit the NRB, Spacetime Dainik reported Friday. nepalnews.com pd Feb 06 04
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| Prajesh |
Posted
on 07-Feb-04 01:00 PM
I am a little surprised and sorry reading this news (nothing against the Indian Firm) but the government didn't trust a local firm to undertake the project. I know lot of Chartered Accountants in Nepal who are very capable to undertake any project within or without Nepal.
If I read the news right Lodhas will find out whether NRB is following the International Standard on both accounting and auditing processes. My concern here "is the government bypassing the Institute of Chartered Accountants of Nepal and the standards promulgated by this body by measuring the NRB's accounting and auditing (must be internal auditing, unless the government wants a seperate set of standards to audit NRB's financial statements) process with International yardstick", as far as I Know ICAN is the only body authorized by the law to promulgate and enforce accounting and auditing standards in Nepal (unless things has changed in last 5 years).
I will appreciate if anyone out there can shed some light. Thanks!
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| Bhunte |
Posted
on 07-Feb-04 01:27 PM
It appears a pressure from IMF. I am not aware of any accounting malpractices of local accounting firms, but wondering why IMF doubted?
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| Biswo |
Posted
on 07-Feb-04 01:31 PM
Prajesh:
I think it will be more enlightening to know your opinion about this, as you are a related professional yourself, if my memory serves me right.
What do you think would be good for our country? Aren't the Nepali auditors doing the audits all the time and yet NRB is in dire state? Again, it is not the issue of competency. Let's remember that Arthur Anderson was a great accounting firm, among top 5 in the world, no question about its competency, and yet it was the one that wrongfully audited Enron and defrauded American investors. We should do what is good for our country and people. And I am sure you know better than us. So, let's hear your opinion first.
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| ashu |
Posted
on 07-Feb-04 06:54 PM
>>>>However, a few economists and government officials have flayed the idea of inviting foreign companies to perform auditing in the central bank as it would leak ‘the secrecy’. <<<<
To apply the inward-looking arguments of the Nepal Media Society and other such cartels: Banking is a sensitive sector. Inviting foreigners (translation: Indians) to examine the books of a state-supported bank in Nepal is NOT in Nepal's "national interests".
Let's start a protest rally against a foreign auditing firm!!
On another note, what would happen, my God, if others find out how much of a mess that Nepali management had made at the other bank Nepal Banijya Bank before (gasp, choke!) foreigners had to be invited to take over its management about two years ago or so.
********
Prajesh, unfortunately and conceptually: it's for "signalling" purposes. Nepali CAs can
no doubt do an excellent job. But having it done through a competent non-Nepali third-party (at least the one trusted by the IMF and the World Bank) sends signals to others around the world that the books at the NRB have been vetted without any bias of any kind. If the books are in order, it raises NRB's standing all the more, ad that would be
in Nepal's national interest.
Lodha may hire a few local CAs as short-term consultants anyway.
oohi
ashu
ktm,nepal
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| Prajesh |
Posted
on 09-Feb-04 07:44 AM
Biswo,
Sorry, I was out yesterday (actually didn't open my computer). Will get back to you shortly on what I think.
Ashu,
If I read the news right, they are much interested to know the standards that were followed to record a particular transaction not whether the books are in order.
Talk to you guys soon!
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