Audit service privatisation
23 July 2010
Royal Audit Authority (RAA) has set up an accounting and auditing standards board to look into possibilities of privatizing audit services in the country.
The need to privatize audit services was felt due to the increasing number of agencies to be audited, RRA said at its 13th annual conference in Thimphu yesterday.
There are over 1,000 agencies under the purview of RAA, but it can cover only half of it. Auditing of corporate, financial and private companies are outsourced to audit firms abroad at the cost of companies themselves, said Auditor General Ugyen Tshewang.
According to him, the board will oversee setting up of private audit firms in the country under the purview of RAA.
He said that prioritizing agencies for annual audit is one of the challenges of RAA.
“Every agency wants to be audited annually, while our coverage at the moment is only about 50 percent,” he said.
The minister for works and human settlement, Lyonpo Yeshey Zimba, in his inaugural address at the conference on Wednesday, said that it would be economically beneficial if auditing expertise could be enhanced among the Bhutanese.
“We have the potential among our financial and accounting graduates, and it will also help the country socially and economically,” Lyonpo said.
Meanwhile, the auditor general said that the recent 20 percent increase in allowance of auditors helped RAA retain its staff.
“Before, I often used to receive letters from auditors who wanted to leave the job for better opportunities, but now it rarely happens,” he said. As of June 30, the RAA had 230 staff members. The new risk-based approach to auditing is an
attempt to manage better coverage with the present capacity. With this system, RAA plans to direct resources to high-risk areas, thereby reducing the auditors’ time in areas of minimal risk.
The accounting and auditing standards board will hold its first board meeting on July 26. The board has representatives from both government and private sectors.
By Puskhar Chhetri
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It is a great idea to privatise the auditing services in the country. If private audit firms are established in the country, they provide relatively cheaper services. It does open the employment opportunities to the Bhyutanese. Outsourcing auditing services might look better auditing, but becomes quite expensive to the organisations/companies who got to be audited in their own expenses.
But Bhutan Audit Authority should regulate, monitor and constantly evaluate the accounts audited by the private firms through regular cross-checkings so as to avoid fraud that takes place frequently in this sector . It may be a good idea to place one supervisor from Bhutan audit authority to each private audit firm in the initial years to provide training and technical support besides monitoring and supervising.
We should remember that the fiscal and financial laws have no meaning when the audit authorities/firms themselves involve in fraudulent “under-table bribery” activities.
Why to throw money to Audit firm of India. It adds value to Govt. exchequer. Further, it paves way to develop expertise of Bhutanese citizens. It should be implemented without giving a second thought. The Audit firm hope will cover the entire gamut- corporations & Private Company’s alike.
I do not accept to open or create private audit firms. Once it is privatized, personnel relation has strong hand and more posibilities of misuse that will overrule in the powers and more misuse mainly indirectly .