Institute secures World Bank grant

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MASERU — The Lesotho Institute of Accountants (LIA) says it has secured US$435 000 from the World Bank to help improve accounting standards in the country.
The capacity building grant from the World Bank is given to deserving professional institutions upon application.
In an interview with the Lesotho Times this week LIA technical manager, Moahloli Mphaka, said the institute was committed to improving public sector standards in the country.
“We are in the process of developing the public sector accounting standards together with the government and the advanced tax planning framework.
“We have managed to create a successful working relationship with the government and this will help improve the standards of the public sector accounting and the accounting profession as a whole,” Mphaka said.
He said during the past year the institute had offered training to both public and private sector accountants.
“The accounting standards are always changing and it is important to be at par with the international standards.
“It is important to always improve and update the skills of our professionals,” he said.
Mphaka said the institute performed reviews on six auditing firms in the country and is set to review four more firms in the coming few months.
He said the reviews were necessary to ensure compliance with accounting standards and requirements by members.
He said the institute was not pleased with the level of compliance to international accounting standards.
“We are really not happy with the level of applications to the standards.
“The level of compliance by our members was not satisfactory during the reviews,” he said.
Mphaka said although most of the firms had partially fulfilled the requirements “this is not enough in the world of accounting where we are driving for full compliance with international standards”.
He said the results of the audit were mixed.
“The compliance of firms and individuals to the international standards have to be in line with standards set by the country such as tax laws and registration of the companies in which we found that the firms were fully compliant,” he said.
Asked about his views on the Integrated Financial Management Information System (IFMIS) introduced by the government last year, Mphaka said the system had several advantages that should be tapped.
He said IFMIS, if applied properly, could result in good financial control making it easy to handle the ever changing demands of modern accounting standards.
“IFMIS is a good system because it improves on controls.
“(But) the question has always been whether the system was properly taken up by the staff,” he said.
“The other issue was training of staff and human morale which is sometimes difficult to address. Sometimes people can be resistant to change,” he said.
IFMIS, which was introduced on April 1 last, has caused a lot of anguish within government departments with hundreds of service providers failing to get paid on time.
The new system replaced the Government of Lesotho Financial Information System which was blamed for the weak management of government finances.
The government says the new financial management system will enhance transparency and accountability in the management of public funds.
Mphaka said the government was currently carrying out a pilot project to train accountants in the public sector on international public sector accounting standards.
He said he was convinced that managing resources effectively will help the country improve its struggling economy.
“Good management of resources especially finances and the country’s minerals will help improve the economy of the country.
“We can also improve the level of our exports against the high imports we currently have in the country,” he said.
He said the level of compliance to international financial reporting standards is already high as most companies had adopted international standards in their operations.
Mphaka feels that the standards of financial reporting are at par with international standards as “there are some new financial reporting standards such as the international financial reporting for SMEs which was introduced in November last year. This will make it cheaper for small and medium enterprises to comply.”

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