Diagnostic Study of Accounting and Auditing
Full Review
Reviewed by: John Russell, Former Alternate Director for Australia, ADB
Review posted 16 January 2004
Review No. 7
Content: Reference material.
Publication Date: 1 January 2001
Audience: Government finance regulators and development professionals involved in program design or implementation in financial sector governance.
Size: 35 MB
Price: US$10
Manual needed: No
How to order:
Order by mail:
ADB Publications Unit
PO Box 789
0980 Manila, Philippines
E-mail: adbpub@adb.org
Tel: +632 636 2648
Fax: +632 636 2648
View CD-ROM content online.**This link takes you outside the ADBI website. Please use the back button to return to ADBI.org.
Content
Since the 1997 Asian Financial Crisis, ADB has devoted considerable resources to the study of governance issues in development. The finance sector and accounting and auditing matters have figured prominently in that work. The CD-ROM contains the results of studies of accounting and auditing in seven countries: Cambodia, People’s Republic of China, Mongolia, Pakistan, Papua New Guinea, Uzbekistan and Viet Nam. Similar studies have since been done in: Indonesia, Fiji, Azerbaijan, Marshall Islands, Philippines and Sri Lanka.
The CD-ROM contains a long “summary” report of 145 pages and each paper on the individual countries is of a similar length. The study identifies international best practice in accounting and auditing regulations and practice, reviews individual countries against best practice, identifies weaknesses and details action plans to overcome those weaknesses. The study has relevance beyond the countries covered. Designers of reform programs for subject countries should read the full country reports. Other users need not look beyond the summary report unless they require more detail.
The study is primarily a top-down analysis of international best practices in accounting and auditing and identifies the weaknesses of individual countries in this area. The problem with this approach is that it can lead to political correctness about good accounting systems and the recommendations offered may seem predictable. For example, before even reading the report, a reader could assume that major recommendations from professionals in this area would cover better training, better systems of accreditation, more consistent government regulation, an increase in status for accountants/auditors and more centralized overview of government accounting. These may well be the appropriate recommendations but there is little attempt in a top-down analysis to identify the specific country problems which would be overcome by adopting international best practice.
Despite its approach, the report itself is very good. It is an essential reference for development professionals and government officials operating in the countries covered. It provides useful baseline information on the state of the accounting and auditing professions and contains recommendations and action plans worthy of discussion. The summary section contains useful information on the importance of good accounting and auditing practices which enable banks and capital markets to operate more efficiently.
The study is especially interesting in comparative aspects of the development of accountancy standards across the range of countries. As the report highlights, the development of the accounting profession and the problems experienced in individual countries reflect prior economic and political history.
In most of the countries studied, the progress made in the development of accounting and auditing practices, is impressive. Especially when you consider that some of the countries included in this study have only recently changed from command economies to market economies. The effects of such a change on the accounting profession in these countries are significant. For example, Viet Nam has suffered the imposition of many different accounting systems over the last 40 years. It has used accounting systems promoted by China, the Soviet Union, France/United States, and the European Union. Hopefully, this report will encourage donors to take a wider view of the sector and be wary of asking developing countries to change their systems for marginal benefit.
The capacity of countries to implement the study recommendations may be problematic. In countries where the government lacks capacity, the report might have looked at options for the private sector to carry greater responsibility. For example, in Cambodia it might be possible to get commercial banks, rather than the government, to take the major responsibility in establishing professional associations, setting standards and generally overseeing professional development until an accountants’ professional body has developed the capacity to operate effectively.
As well as the individual country recommendations and action plans, the study looks at cross-country issues and actions that might be appropriate. That section covers such matters as public/private sector pay disparities, tertiary education capacity, training of tertiary educators, availability of training materials, and promotion of international public sector accounting standards.
Users
The study provides reference information for government officials in developing countries and for development professionals designing or implementing financial sector or governance programs. Although not a stated objective, the study also provides a valuable resource for the study of the principles and concepts of accounting and auditing and their application in different, and difficult, national systems. Accounting and auditing students from both developed and developing countries would benefit from viewing this CD-ROM.
User Friendliness
In essence, the CD-ROM is no more than a collection of worthwhile reading materials. Navigation requires a bookmarks window on the left side of the screen which shows the equivalent of a contents page. The reader clicks on the appropriate section of the contents page to move to the required section. Inclusion of a site map would improve navigation further. The instructions on opening and use of the CD-ROM are not entirely correct The individual country papers have no page numbers. The inclusion of page numbers would make the CD-ROM more usable as a reference document for information retrieval and for discussion between colleagues.
Interactivity
The CD-ROM has no interactive features.
Accessibility
The CD-ROM may be purchased from ADB’s Publications Unit for $US10 or it is available as a paperback for the same price. It may also be downloaded from the ADB website, free of charge. ADB publications are also available through a limited number of commercial distributors in ADB member countries. A list of the distributors may be found online.*
*This link takes you outside the ADBI website. Please use the back button to return to ADBI.org.
Sustainability
The ADB has produced an impressive series of similar reports on a number of developing member countries. The reports are partly intended to be benchmark studies that will be used in preparation of updated reviews on a regular basis. It is hoped by the authors that the study will lead to reform action making this particular report outdated in a relatively short time. Intended users should check the ADB website in the future for more recent studies.
To comment on either this CD-ROM or the review, please contact the CD-ROM Review Group. ADBI is not obliged to acknowledge or publish comments and may abridge or edit them before web posting.
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