…Jordan raises concerns; points to shortcomings at AG’s office

THE APNU+AFC coalition government has hinted that it is dissatisfied with the quality of work put out by some certified accountants recruited to conduct forensic audits after it was elected in May 2015.
Government had commissioned a number of audits following its victory at the polls, but few have led to prosecution of any of the alleged wrongdoers. Speaking at the 35th Annual Conference of the Institute of Chartered Accountants of the Caribbean (ICAC) which kicked off on Friday at the Marriott Hotel, Minister of Finance, Winston Jordan, said while there was a clamour to investigate the state of the country’s finances, it was discovered that the audits were done without consideration of the accounting landscape. “We soon learnt that there were not many forensic accountants within our midst. So, even though we contracted a range of local individual accountants and accounting firms, with specific terms of reference, the work product, in several cases, fell far short of what one expected from a forensic audit,” said Jordan.
The two-day conference gives those professionals the opportunity to discuss issues that affect their individual territories but also look at the various commonalities that can be assessed and corrected. Jordan explained that the allegations of widespread acts of corruption and unaccountable governance during the former Peoples Progressive Party (PPP) administration warranted the forensic audits.

Revealing findings
However, the Minister of Finance said despite the shortcomings, the findings were “many, varied and revealing.” But the inadequacies highlighted by virtue of the conduct of the forensic audits were not unique to private accountants but also to those within the Auditor General’s Office. “The findings also reflected shortcomings in our own Auditor General’s office, both systemic and in human capacity. I do not know whether this problem is peculiar to Guyana or whether it is observed across the Caribbean accounting family,” said Jordan who requested that the issues be given attention over the next few days of the conference.

Technology
Meanwhile, the Finance Minister noted that technology has somewhat transformed the manner in which accountants work and communicate with clients. As such, he recognised the need to guard against cyber threats and noted that hackers have become more sophisticated. He charged the Region’s accountants to “build adequate and secure defense mechanisms against such attacks.”

“In this regard, the adoption of appropriate cyber security must be given the desired prominence, because, like banking, trust remains vital in your relationship with your clients,” said Jordan. He told the grouping of Caribbean accountants that accountants have many roles to play in the development of economies, while noting that a country’s growth rate hinges on the efficiency with which available resources are managed and utilised. “Accounting is all about savings, which is at the heart of economic development and growth. Certified Accountants also play a pivotal role in strengthening the internal control mechanism employed by businesses and organisations, to ensure efficient and effective operations, and compliance with relevant laws and regulations,” the Finance Minister added. He stressed that certified accountants are depended upon to provide high quality financial reporting that reflects the true business transactions of their clients and at the level of government; they (accountants) hold the key to the efficient management of public funds, good governance, accountability and transparency.

Economic Transformation
Stating that Guyana is chosen for the fourth time as host country for the event, Jordan reminded that the country is on the cusp of major economic transformation and pointed to the recent major oil discovery by U.S oil giant, ExxonMobil and its partners. He noted that with the oil company indicating that it will pump US$4B into the recovery of oil, there will be a significant inflow of resources and influx of personnel here. Given the future, Jordan said the efficient utilisation and management of the revenue from this source and the changes that will arise in our tax and regulatory regimes, will trigger an upsurge in the demand for qualified accountants and allied fields.
“We will be pursuing a path of economic diversification that is essential to avoiding the so-called “Dutch Disease” and “Resource Curse” that many oil-producing countries have experienced. Our intent is to expand core underdeveloped economic sectors; focus on value-added products; and invest heavily in infrastructure and human development,” the Finance Minister said, stressing that the scale and magnitude of the activities will require the skills of qualified accountants at the level of the government and the private sector. Jordan noted that the time is ripe for accountants (local and regional) to position themselves to take full advantage of the opportunities that are on the horizon.

Climate Change
Speaking of Guyana’s green agenda, the Minister of Finance, who represented President David Granger at the event said, climate change poses severe risks to Small and Medium Enterprises in key sectors, such as tourism, agriculture and services. He noted that despite the role of the government in the adaptation and mitigation processes, certified accountants have the opportunity to provide assistance to their clients in identifying their vulnerabilities to these changes and help them to build business resilience and competitiveness. This, Jordan said is critical here as many of the small and medium businesses are susceptible to climate change, which can impact their contribution to the country’s Gross Domestic Product (GDP).

Money Laundering
Meanwhile, Jordan disclosed that Guyana recently completed its first Money Laundering/Terrorist Financing National Risk Assessment and the findings from that exercise will help policy makers to identify and assess money laundering and terrorist financing threats and vulnerabilities that are relevant to Guyana.
“A key finding that is of relevance to this distinguished group is that the accountancy profession carries a high risk for money laundering in Guyana, a situation that is common to many developed and developing countries.”
As a result, Jordan called on the accountants to let their country’s anti-money laundering laws take precedence over your professional privileges “and ensure that your offices do not facilitate predicate crimes”. The Minister also alluded to the Region’s economies being affected by new regulatory measures imposed on the international financial institutions by global standard setters such as the Financial Action Task Force (FATF). These regulatory measures he said have resulted in corresponding banks in developed countries severing or reducing their relationships with jurisdictions that are considered high risk. Guyana, Jordan alluded, is working to strengthen its Anti-Money Laundering and Corrupt Financial Transactions (AML/CFT) regime.
Given the new framework and the expansion of the regulatory perimeter, there will be a higher demand for accountancy services. “Accountants are also expected to undertake appropriate Client Due Diligence. They are called upon to know who their clients are; what are their motives; and what is the nature of their businesses,” the Minister added. The Conference is themed “New Horizons- Charting the Course Together”.