‘Help maintain good governance at BFIs’

NEPAL Rastra Bank Governor Yuba Raj Khatiwada said on Sunday the malpractice of balance sheet manipulation at banks and financial institutes (BFIs) could take down the banking sector along with the entire economy. The governor’s remark has come at a time when chartered accountants’ failure to indicate practices against corporate governance resulted in crisis at some financial institutions. It has been found that chartered accountants have failed to indicate huge embezzlements by BFI directors which led a few financial institutions to trouble. Speaking at a programme organised by the Auditors’ Association of Nepal to mark its eighth anniversary, Khatiwada urged the auditors and chartered accountants to help maintain good governance in the financial sector through good audit reports. Highlighting the role of the auditors and chartered accountants, Khatiwada expressed the need for transforming the country’s audit system into international standard. He asked them to adopt advanced technology in the auditing system to assess BFIs’ financial report effectively. Chiranjivi Nepal, chief economic advisor at the Finance Ministry, said the lack of transparency in the audit system has helped increase financial crime at BFIs. “Ineffective audit system is also the key factor for emerging problems in cooperatives,” he said, stressing on the need for an effective role of the Institutes of Chartered Accountants of Nepal (ICAN) to curb the ongoing misconduct by its member auditors. ICAN President Mahesh Kumar Guragain said the current accounting standards must be implemented while auditing savings and credit cooperatives where huge public funds have been deposited. He said ICAN was coordinating with government agencies to implement the accounting standard in the entire small and medium enterprises and other institutions that use funds received from the government and donors. “It can help control funds misuse.” Insurance Board chairman Fatta Bahadur KC stressed on the need for capacity building to enhance competence of auditors.