2007年-世界发展银行全球_Maldives___Public_Sector_Accounting_and_Auditing_A_Comparison_to_International_Standards_72页_1mb

Summary of Public Sector Accounting and Auditing in the Maldives: A Comparison to International Standards

Core Content

This report assesses the current state of public sector accounting and auditing in the Maldives, comparing it to international standards and identifying areas for improvement. It outlines the necessary steps for aligning local practices with global benchmarks in order to enhance public financial management (PFM) and accountability.

Main Objectives

• To provide the Maldives' accounting and audit authorities with a clear understanding of how local practices compare with international standards.
• To evaluate the causes of existing variances in accounting and auditing.
• To outline a path for reducing these variances.
• To establish a framework for ongoing measurement of improvements.

Key Findings

Public Sector Accounting

• Current Status: The Maldives primarily uses a cash basis of accounting, which does not fully capture the true financial position of the government.
• International Standards: The International Public Sector Accounting Standards (IPSAS) are recommended for better financial reporting, including both cash and accrual basis systems.
• Institutional Framework:
  • The Auditor General is responsible for setting accounting standards.
  • The Public Finance Act does not explicitly require compliance with IPSAS, but proposed rules will allow its adoption.
  • The current system lacks a formal body for prescribing public sector accounting standards.
• Education and Training:
  • Public sector accountants are not adequately trained in international standards.
  • A training program aligned with the IFAC International Education Standards (IES) is needed.
  • There is no comprehensive local training institution, and reliance on international programs is suggested.
• Code of Ethics:
  • The existing code is not aligned with international standards.
  • A new code of ethics, based on the IFAC Code, should be developed to enhance professionalism and compliance.
• Accounting Arrangements:
  • Each ministry should have a professionally qualified Chief Financial Officer (CFO) to manage internal financial controls and prepare financial statements.
  • The role of the accountable officer is not yet fully defined, but it should include functions such as managing internal controls, ensuring compliance, and preparing financial accounts.

Public Sector Auditing

• Current Status:
  • The Auditor General has a statutory framework that aligns with the INTOSAI standards.
  • The current audit manual is based on international standards but not formally adopted.
  • The SAI (Supreme Audit Institution) is not fully equipped with the necessary audit methods and technologies.
  • There is no formal code of ethics equivalent to INTOSAI standards.
• International Standards:
  • The INTOSAI and IFAC audit standards should be adopted.
  • The SAI needs to develop quality assurance programs to meet international standards.
• Audit Process:
  • Audit planning and supervision are in line with international standards.
  • Internal control evaluation and compliance assessment are also compliant.
  • However, audit analysis of financial statements to ensure compliance with accounting standards is lacking.
  • Audit recommendations and reports are not made public, which reduces the effectiveness of the audit process.

Action Plans

• Adopt IPSAS: The Auditor General should prescribe the adoption of IPSAS for the Maldives, with a transition from cash basis to accrual basis.
• Develop a Code of Ethics: The Ministry of Finance and Treasury (MoFT) is tasked with developing a national code of ethics by December 2007.
• Improve Education and Training: A joint proposal by MoFT, Ministry of Higher Education, PSTI, PSC, and AG should be drafted by June 2007 to establish a training program aligned with IES.
• Enhance Audit Impact: The audit process should be improved to ensure that recommendations are effectively implemented and reports are publicly accessible.
• Implement Modern Audit Reporting: The new Audit Act (enacted in March 2007) should be implemented to introduce modern audit reporting and a modern audit organization.
• Technical Assistance: The World Bank is providing technical assistance through an IDF grant to support the development of the audit office and the implementation of the Public Accounting System (PAS) project.

Key International Standards and Frameworks

• IPSAS: International Public Sector Accounting Standards developed by the IPSASB.
• IFRS/IAS: International Financial Reporting Standards and International Accounting Standards.
• INTOSAI: International Organization of Supreme Audit Institutions, which supports the development of auditing standards.
• ISA: International Standards on Auditing, developed by the IAASB.
• IES: International Education Standards for Professional Accountants, developed by IFAC.

Conclusion

The report highlights the need for the Maldives to transition from a cash-based to an accrual-based financial reporting system, align its accounting and auditing practices with international standards, and improve the professionalism and transparency of its public financial management system. These improvements are expected to enhance accountability, decision-making, and the overall effectiveness of public financial management in the country.