Our accounting standards on par with the world – KPMG partner

“Companies that practise good corporate governance enjoy high shareholder value…” says Reyaz Mihular

In the latest edition of LMD, the business journal speaks to a Partner at KPMG Ford, Rhodes, Thornton, Reyaz Mihular, on how he rates the accounting and auditing profession in Sri Lanka. “The current trend is to practise fair-value reporting, whereby a company is assessed according to its market value,” Mihular tells LMD’s Contributing Editor, Yamini Sequeira.

Claiming that the past five years has seen significant changes in financial reporting, he asserts that fair-value reporting has been successful in assessing assets and liabilities, enabling the reflection of a company’s true value and greater financial transparency. In this regard, he adds: “Sri Lanka is more or less on par with international accounting standards.”

Asked about corporate frauds, Mihular responds: “Scandals such as Enron were instrumental in expediting merits of transparency.” And he notes that US banks and financial firms have begun to reflect losses in the respective company books and “the International Finance Regulatory Standard (IFRS) is emerging as the most popular accounting standard internationally”.

Mihular also talks about the importance of annual reports to companies. “Since an annual report is a medium of communication between the company and its shareholders, it does play an important role,” he points out. But he adds that today, most companies also use them as corporate profiles and marketing tools.

The exclusive interview is featured in the April issue of LMD, the flagship publication of Media Services, publisher of LIVING, THE LMD 50, MOST RESPECTED, and presenter of BENCHMARK – the weekly TV programme for businesspeople, which airs on TNL every Sunday.