2015年-世界发展银行全球_Nepal_Report_on_the_Observance_of_Standards_and_Codes___Accounting_and_Auditing_40页_3mb

Nepal Report on the Observance of Standards and Codes (Accounting & Auditing) - Summary

Core Content

This report, prepared by the World Bank, evaluates the accounting, financial reporting, and auditing practices in Nepal against International Financial Reporting Standards (IFRS) and International Standards on Auditing (ISA). It aims to support the Government of Nepal in improving the quality of corporate financial reporting, thereby enhancing the business climate and fostering economic development. The report outlines key challenges and provides policy recommendations for strengthening the accounting and auditing environment in Nepal.

Main Viewpoints

• Financial Reporting and Auditing Quality: Financial transparency and disclosure are crucial for attracting investment and reducing market risk. The report highlights the need for improving the quality and consistency of financial reporting practices.
• Regulatory and Institutional Challenges: The current regulatory framework faces issues such as lack of enforcement, limited capacity, and inconsistent application of standards across different sectors.
• Professional Capacity Gaps: The accounting profession in Nepal lacks an enforceable quality assurance system and has a shortage of trained professionals, especially in the SME and public sectors.
• Need for Reforms: The report emphasizes the necessity of reforms to align with global standards, improve coordination among regulatory bodies, and enhance the overall institutional framework.

Key Information

I. The ROSC and Country Background

• The ROSC A&A is part of a joint initiative by the IMF and World Bank, focusing on assessing and improving the accounting and auditing environment.
• Nepal is a federal republic with a multi-party system, and its economic and financial context is influenced by political instability and a need for structural reforms.
• Nepal's economy has shown modest but stable growth, with a small export base and limited financial integration, making it relatively insulated from external shocks.
• The country recorded a budget surplus in FY14, becoming the only South Asian nation to do so, and public debt has reached historically low levels.

II. Accounting and Auditing Framework

A. Statutory Framework

• The Companies Act of 2006 mandates the audit of all companies, including SMEs, which creates a burden due to lack of tailored standards.
• The Securities Act of 2007 establishes NEPSE as the sole stock exchange and SEBON as the apex regulator.
• The Bank and Financial Institutions Act (BAFIA) of 2006 requires financial institutions to be audited by NRB-enlisted auditors.
• The Audit Act of 1991 mandates audits of state-owned entities (SOEs) by the Auditor General.
• The Insurance Act of 1992 establishes the Insurance Board as the regulatory authority for the insurance sector.

B. Accounting and Auditing Profession

• The Institute of Chartered Accountants of Nepal (ICAN) regulates the profession and has adopted the IESBA Code of Ethics.
• ICAN has two types of membership: Chartered Accountant and Registered Auditor.
• The profession faces challenges such as limited capacity, lack of enforceable quality assurance, and outdated training and education systems.

C. Accounting Education and Training

• Only an average of 25 Chartered Accountants are produced annually by ICAN, which is insufficient to meet market demand.
• Universities in Nepal offer limited courses on accounting and auditing, and curricula are not updated to reflect global standards.
• Continuing Professional Education (CPE) is not mandatory for all ICAN members, leading to a knowledge gap.

D. Accounting and Auditing Standard-setting

• The Accounting Standards Board (ASB) sets standards aligned with IFRS and is responsible for implementing NFRS and NAS.
• The Auditing Standards Board (AuSB) has developed 32 NSAs based on ISA.
• There is a need for the development of NFRS for SMEs, given that SMEs constitute 99% of businesses in Nepal.
• The standard-setting process is constrained by limited resources and part-time board members.

E. Enforcing Accounting and Auditing Standards

• The Office of the Company Registrar is responsible for enforcing the Companies Act but lacks the capacity to conduct reviews or investigations.
• SEBON and NRB are mandated to regulate and enforce compliance but face similar resource limitations.
• There is a lack of uniformity in financial reporting and auditing requirements across different laws and regulations.

Policy Recommendations

1. Establish a National Steering Committee to coordinate and champion accounting and auditing reforms.
2. Introduce a size threshold for companies required to have their financial statements audited to reduce the burden on SMEs.
3. Ensure uniformity in financial reporting and auditing requirements across laws and regulations.
4. Adopt IFRS for SMEs as the basis for developing Nepal Financial Reporting Standards (NFRS) for SMEs.
5. Create an enforceable Quality Assurance System for audit firms, involving multiple regulatory bodies.
6. Strengthen enforcement mechanisms by ensuring transparent, unbiased, and efficient decision-making processes.
7. Enhance regulators' capacity through recruitment, training, and logistics support.
8. Improve coordination among regulatory bodies to ensure consistent enforcement and compliance.
9. Strengthen ICAN's capacity by enhancing its training programs and aligning with IFAC membership obligations.
10. Introduce mandatory CPE for ICAN members not in public practice.
11. Revise university curricula to align with global standards and support the development of Chartered Accountants.
12. Implement awareness programs for the implementation of NFRS and NAS.
13. Conduct a study to assess the demand and supply gap for qualified accountants and develop a strategic plan accordingly.

Conclusion

The report underscores the importance of enhancing financial transparency and accountability in Nepal to support sustainable economic growth and attract investment. It calls for coordinated reforms across the regulatory and professional bodies to align with international standards and improve the quality of financial reporting and auditing practices.