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FM
Former Member

W(h)ither the accounting profession?

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Introduction
At that age where reminiscing is one of life’s remaining pleasures it is with fondness that early memories of the accounting profession come to mind. It may be that it was unwarranted hero-worshipping, but many newcomers to the profession held those referred to in that bygone era who were respectfully described as “qualified” accountants in the highest esteem. Undoubtedly young and impressionable, we held onto those images that we had created for dear life and it drove new entrants to the profession to try to achieve great things so as to gain the approval of their heroes and be admitted into their realm. We aspired to be like them; we worked hard, studied hard and played hard, because that is what accountants did in those days behind the boring, stodgy facade. The seniors and partners at Pannell Fitzpatrick, (the largest accounting firm in Guyana at the time and grandfather of the current TSD Lal & Co) along with Willie Stoll, Victor Gangadin, Yesu Persaud, Alan Luck, John Barcellos, Ossie Baptiste and Sugrim Mohan, the pre-eminent accountants of the era, were men of mystery who every young accountant knew were the big men on campus and hoped someday to be like.Sadly today not too many in the profession possess that aura.

Those days have long gone, but still it was jarringly noticeable that in his speech calling for an assault on corruption the outgoing chairman of the Private Sector Commission (PSC) Mr Ramesh Dookhoo mentioned the accounting profession not once but twice. This reference could be interpreted in two ways: either the gentleman feels that the accounting profession has a role to play in attempting to curtail corruption or cynically, that it is already playing a role, but as an accessory. It was not an inopportune time, coming in the midst of a furore in which the highest ranking accountant in the country is embroiled in a controversy in which anyone, save those directly involved and those in the Guyana Government, can see an obvious and blatant conflict of interest. Such is the egregious nature of the situation that it moved no less a person than the Vice-President of the domestic accounting regulator, the Institute of Chartered Accountants, Mr Chandradat Chintamani – no stranger to conflicts of interest himself – to pronounce “…my position is that it is deemed as a conflict of interest.”

Mr Dookhoo of course speaks with some knowledge and experience of the shenanigans of the accounting profession and their sometimes inappropriate liaison with corporate management. He would know of instances in which management has been less than cooperative with the internal auditors – the frontline warriors against poor accounting and controls and the kinds of internal dealings engaged in by management. As a long-standing director of the Private Sector Commission he would have been privy to both anecdotal and empirical information and indicia on corruption and tax evasion. The PSC has often made noises about tax reform, even though when it comes to walking the talk it has failed spectacularly. So I have some empathy with the negative views of the profession expressed by Mr Dookhoo, even though I do not think it was a collective mea culpa.

Where I differ from Mr Dookhoo – and without holding any brief for the local profession which deserves even stronger criticisms than it currently receives – is that he fails to see or acknowledge the unholy alliance between corporate Guyana and their auditors, not unlike the complaint against the police or customs officer who is castigated and sometimes prosecuted for receiving a bribe while the perpetrator goes unpunished.

Mr Dookhoo will be familiar with the improper transactions in which many company directors engage with their companies; unrecorded sales and related parties transactions; under-the-table payments by them, the source of which is never pursued and their destination never accounted for; and the tax free payments made to staff as “non-taxable” allowances to facilitate a reasonable take-home pay. As an accountant I can say that the avenues of tax evasion are varied and many, but like the rest of the private sector, the Private Sector Commission has never ventured to categorise tax evasion as corruption; rather it is euphemistically called tax minimization. Nor did Mr Dookhoo unambiguously question the role in all of this played by significant segments of corporate Guyana which are then prepared to reward their accountants commensurately. He was lucky that the President was in a charitable mood and did not respond to his call for him to address corruption at high government levels by pointing out that the public sector does not have a monopoly on corruption and that the private sector plays a not insignificant role in the scheme of things.

If the Private Sector Commission wants to achieve more than mere positioning itself on the right side of the corruption debate, then its officers must do more than just make farewell speeches. Mr Dookhoo’s statement about the profession would have had even more credence and weight if he had called on the President to ensure that the Public Procurement Commission is established without delay, associated the PSC with Transparency Institute’s call for anti-corruption legislation; pledged its support for the national efforts to stamp out tax evasion; and had reminded the President that the Tax Review Committee needs to be reconceived to replace the one that was stillborn. Hopefully his successor would take a stronger stand in the national interest.

Noble profession?
Members of the profession should not be surprised if the latter of the two interpretations of the remarks by Mr Dookhoo is embraced by anyone. In fact the statement offers an opening and a challenge to those still committed to practise professional values while offering leadership to those aspiring young accountants who have hitherto seen accounting as a noble profession. Why should they and the rest of society not be cynical about the declarations concerning integrity, high ethical standards and professionalism, when they see them being trampled upon and violated by members of the profession? The question we must answer is how did the profession arrive at this place where worldwide it is on the verge of becoming synonymous with greed and financial scandal?

Sounding the alarm
As far back as 1985, long before the much publicized demise of Arthur Andersen resulting from the Enron scandal, the American Institute of Certified Public Accountants was beginning to press the panic button. A report by its Special Committee on Standards of Professional Conduct had this depressing but prescient observation:

“There has been an erosion of self-restraint, conservatism, and adherence to basic professional values at a pace and to an extent that is unprecedented in [the] profession’s history… we believe the profession is on the brink of a crisis of confidence in its ability to serve the public interest” (Special Committee 1985 3-4).

The most damning portion of this statement is the last, that warns of a crisis of confidence in the ability of the profession to serve the public interest. The warning was vindicated with the spate of accounting scandals bearing the name Enron. Users of financial statements over time have relied on accountants to use their professional, training, skill and judgment to give objective assessments of financial information. The profession – until the relatively recent past and the repeated black eyes it has received as a consequence of aggressive practices, greed, and disregard for ethical standards – has been by and large self-regulating in many countries, and this is still the case in Guyana.

The view of the professions, and accounting was no different, was that their members possessed the requisite skill and would exercise due care in the execution of their duties. They were perceived as being special and therefore they were allowed to set their standards, establish their own rules and were given the authority to discipline their members. This works well if their membership maintains those standards which over time establish and reinforce the credibility and integrity with which to serve the public interest.

Without this a profession is of no consequence and many countries recognizing the failings of the accounting profession have increasingly introduced regulations to compensate for its shortcomings. It is time that the fig leaf of self-regulation be revisited in Guyana – but then what do we do about the incompetent, incapacitated Audit Office? We are in a real dilemma.

Impeccable record?
The Institute of Chartered Accountants of Guyana (ICAG) has been noticeably absent from the public discourse on any issue, even if it has direct implications for its members or relates to matters on which it has a responsibility to educate the public. In Guyana, the impeccable record of the profession has never, as far as this writer can recall, been tarnished by any disciplinary action against any of its members; an amazing accomplishment perhaps worthy of recognition by the good folk at the Guinness Book of Records. Based on recent events, however, it appears that there is a blot on that record on the horizon because surely the Institute of Chartered Accountants of Guyana must now deal with the twin issue of the Minister of Finance and his wife who are both professionally qualified accountants and subject to the strictures of the local body. It is hoped that the usually indolent body will now move expeditiously in a manner that restores Mr Dookhoo and the public’s faith in the ability of the accounting profession to regulate its members.

Hard choices
There has been enough adverse publicity for the profession almost on a daily basis, so there is no point dwelling on the litany of scandals with which it has been confronted worldwide. The focus should be on whether the members of the profession are prepared to engage in the introspection necessary to redeem their reputation. The deafening silence in the face of both public and private sector abuses must no longer be the cloak behind which the protection of fees takes precedence over the discharge of statutory and professional obligations. While the profession throughout the world has issues, my concern is with what is happening in Guyana, and the worn out clichÉ that there are problems everywhere does not cut it. The ICAG has a duty to take principled positions when necessary even if they are unpopular and have a financial cost, because it is the only way to carry out its mandate of serving the public interest. It also must not shy away from exercising its authority to institute disciplinary measures against any of its members, high or low, whenever necessary if it wants to restore its credibility in the eyes of the public.

Conclusion
Accountants who want to be respected as professionals must walk the walk or they do grave disservice to the profession, the public and all those many young people who are just getting into or are thinking of embarking on careers as accountants.

The almighty dollar must not be the shrine at which pseudo professionals are prepared to sacrifice their principles and ethics.

Perhaps there is a message in Mr Dookhoo’s statement perhaps not; only he knows that. What everyone does know is that the reputation of the accounting profession, though not quite in tatters, is not a long way away from achieving that status. It may be that an unintended consequence of the fallout from this latest exhibition of arrogance on display from the Finance Minister and his colleagues is the long awaited awakening of the ICAG from its long, deep slumber. Its Vice-President has left the door ajar; maybe other members will have the courage to kick it open. One can only hope.

On a final note, Mr Dookhoo also appended the legal profession to his charge. It is not certain whether that profession is any better than the accountants. But since it is known for its prolixity, the legal profession might wish to say something to help restore its own image and the reputation of its practitioners.

- See more at: http://www.chrisram.net/?tag=i...sthash.Yn7xLK57.dpuf

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We aspired to be like them; we worked hard, studied hard and played hard, because that is what accountants did in those days behind the boring, stodgy facade. The seniors and partners at Pannell Fitzpatrick, (the largest accounting firm in Guyana at the time and grandfather of the current TSD Lal & Co) along with Willie Stoll, Victor Gangadin, Yesu Persaud, Alan Luck, John Barcellos, Ossie Baptiste and Sugrim Mohan, the pre-eminent accountants of the era, were men of mystery who every young accountant knew were the big men on campus and hoped someday to be like.Sadly today not too many in the profession possess that aura.

FM

This great accountant published

 

 

A brief outline of the imposition in Guyana of income tax, corporation tax, capital gains tax, withholding tax and property tax with special reference to foreign corporations operating in Guyana, through a branch establishment or an agency

Victor J. Gangadin
FM

Kishan B.

 

A well know tax lawyer whose last name is Gangadin fathered a couple of kids for young teenage girl who was poor and had place to live.. Before you and Ram boast of ethics and accounting, please investigate these background first.

 

Billy Ram Balgobin

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