2007年-世界发展银行全球_Nepal_-_Public_Sector_Accounting_and_Auditing___A_Comparison_to_International_Standards_88页_6mb

Nepal Public Sector Accounting and Auditing Country Report Summary (May 2007)

Core Content

This report assesses the current state of public sector accounting and auditing in Nepal in relation to international standards, with the goal of improving public financial management (PFM) through the adoption of more effective accounting and audit practices. It identifies gaps in the current system and outlines action plans to align Nepal with global best practices.

Main Objectives

1. To provide a common understanding of where Nepal's local practices stand in comparison to international standards.
2. To assess existing variances and chart a path to reduce them.
3. To offer a continuing basis for measuring improvements in the public sector financial reporting and audit systems.

Key Findings and Recommendations

Accounting Standards

• Current Status: Nepal's accounting system is primarily based on the cash basis, which is not fully aligned with International Public Sector Accounting Standards (IPSAS).
• Recommendations:
  • The government should adopt IPSAS and integrate them with Nepal Accounting Standards (NAS).
  • The Accounting Standards Board should be empowered to set IPSAS-based standards.
  • The financial statements of government entities should be prepared in accordance with the Cash Basis IPSAS.
  • A medium-term plan is needed to transition from cash-based to accrual-based reporting.
  • The government should issue consolidated financial statements and provide a separate audit opinion for them.
  • Accounting policies and explanatory notes should be introduced to enhance transparency and clarity.

Auditing Standards

• Current Status: Nepal has adopted INTOSAI auditing standards but still needs improvements in alignment with IFAC and IES.
• Recommendations:
  • The Office of the Auditor General (OAG) should adopt the Nepal Standards for Auditing (NSA) alongside INTOSAI standards.
  • The Audit Act should be revised to allow for more specialized audits, such as environmental and forensic audits, and to ensure greater independence.
  • The SAI (Supreme Audit Institution) should enhance its audit methods and technologies, including computer-assisted audit tools.
  • A more comprehensive and structured audit planning and working paper system should be implemented.
  • The education and training of auditors should be aligned with international standards, with a focus on recruitment and continuing professional development.

Institutional and Legal Framework

• The Accounting Standards Board (NASB) and Auditing Standards Board (NASB) are responsible for setting standards.
• The Office of the Auditor General (OAG) and Financial Comptroller General Office (FCGO) play key roles in public sector auditing and accounting.
• ICAN (Institute of Chartered Accountants of Nepal) and IFAC (International Federation of Accountants) provide guidance and standards for the profession.
• The Ministry of Finance (MoF) and Ministry of General Administration (MoGA) are central to the implementation of financial reforms.
• INTOSAI and ASOSAI provide international frameworks for auditing standards and practices.

Training and Human Resources

• Current training programs for accountants and auditors are insufficient to meet international standards.
• Orientation and in-service training should be extended and enhanced to ensure better understanding and application of international standards.
• A long-term strategy for human resources development is necessary to build the capacity of the accounting and auditing sectors.
• The OAG should collaborate with other SAI and professional bodies to support continuous education and skill development.

Corporate Governance and Accountability

• Audit Committees and Public Accounts Committees (PAC) are essential for improving corporate governance and accountability.
• The PAC should be strengthened through exposure to best practices and modernization.
• SOEs should be required to adopt relevant international accounting standards (IAS and IFRS) and have independent audit committees to monitor compliance.
• Legal amendments are necessary to support these changes and ensure proper implementation.

Key Gaps and Actions

Accounting Gaps

• No adoption of IPSAS.
• Inadequate alignment with IES.
• No specific code of conduct for public sector accountants.
• No formal body to prescribe public sector accounting standards.
• Financial statements not in line with international standards.
• Lack of required disclosures and accounting policies.
• No consolidated financial statements.

Auditing Gaps

• Audit planning and supervision not fully aligned with international standards.
• Inadequate internal control evaluation.
• Need for more specialized audit types (e.g., forensic audits).
• Limited use of modern audit technologies.
• Quality assurance programs need improvement in implementation.

Annexes Overview

• Annex A: Methodology used for the assessment.
• Annex B: Summary of accounting and auditing standards.
• Annex C: National accounting and auditing legislation.
• Annex D: Benefits of accrual accounting.
• Annex E: Staffing and training arrangements in Nepal.
• Supplementary Table: Matrix of current standards, status, and improvement options for accounting and auditing.

Conclusion

This report outlines a comprehensive roadmap for Nepal to align its public sector accounting and auditing systems with international standards. It emphasizes the need for legal reforms, enhanced training, improved corporate governance, and the adoption of modern audit and accounting techniques. The implementation of these recommendations is expected to lead to greater transparency, accountability, and efficiency in public financial management.