10:40 June 21, 2010
Opinion – By Thakur Ranjit Singh.
Those who have been attending Fiji Institute of Accountants congress for some years would have received a pleasant shock when the Chief Guest for the 2010 congress, Prime Minister Frank Bainimarama, hit out at the accounting profession. Many believe those in the profession consider themselves as little Gods.
While this myth had been shattered some ten years ago in the Enron scandal, Fiji’s internationally-franchised auditors still remained protected under the professional skirt that hitherto provided them a sense of security despite major failures in Fiji. Bainimarama hit out saying accountants were responsible for numerous failures worth millions in Fiji.
Bainimarama hit at the lapses in the profession that saw the failure of certain multimillion dollar projects in Fiji despite being supposedly professionally audited with a clean audit opinion based on supposedly international standards. National Bank of Fiji scandal and the Fiji National Provident Fund (FNPF) write-offs constituted some $600m wastages. For a country with an annual budget of some $1b, this is an astronomical loss for a country with the relative size of Fiji.
Speaking at the Accountants Congress at the Shangri- La Fijian Resort and Spa at Yanuca Island in Sigatoka, Fiji on June 11 2010, Frank Bainimarama observed that accountants in public practice, whether calculatingly or otherwise have escaped the ire of the public despite the failure and collapse of organizations supposedly cleared under the radar of accounting and audit standards of Fiji accountancy firms.
He questioned whether accountants were involved when problems pertaining to Natadola and Momi were taking place. He queried whether accountants owed a responsibility to bring it to the attention of public. This was especially relevant when some parties were paid monies which were not commensurate with the services and expertise that were allegedly provided.
Bainimarama queried if proper audit vigilance would have avoided collapse and losses at some state-owned enterprises in Fiji.” Would the debacle at NBF (National Bank of Fiji) have been picked up earlier if the auditors and accountants rather simply highlighted matters , brought it to the fore, brought it into the public domain?” While he agreed that the excuse for silence was shrouded under the cloak of professional privilege, nevertheless the case of misrepresentation of the books to the people of Fiji by the then board of Fiji National Provident Fund (FNPF) should have been exposed for public interest.
He also accused the accounting firms of observing double standards. While accounting firms claimed it adhered to rules such as professional privileges, they breached their own code of ethics. “Your manual on codes of ethics states that firms should not audit companies in which the firm’s employees or partners have relatives employed. Yet this had happened in the recent past by supposedly reputable firms. Furthermore there was no disciplinary action taken by the Fiji Institute of Accountants.”
Bainimarama hit at the accountants and said the irregularities, while not being illegal, constituted dubious actions, gross negligence and misrepresentation to the public. He accused the profession of continuing to overlook inherently flawed internal systems and procedures because it did not want to upset the apple cart and the status quo and had vested interest in not risking losing their clientele and income base.
For somebody who first attended the Accountants Congress some three decades ago whilst working for the then Coopers and Lybrand corp, and continued attending them till some six years ago, I can vouch that never before has anybody tackled the bull by its horns as Bainimarama did to the accountants in the 2010 Congress.
Never has a no-holds-barred awakening call been made to the movers and shakers whose standards have increasingly come under spotlight. The past Chief Guests had a habit of loading praises for their hosts and the accounting profession in exchange for a free weekend at the Accountants Congress which some dub as the accountants’ piss-up party. As in most cases, Bainimarama stood tall in his uncompromising attack on a profession which has much to answer to the people of Fiji.
Of all the professional Fiji organizations, Fiji Institute of Accountants holds the highest relative respectability and professional status in Fiji. The profession consists of most powerful movers and shakers in Fiji, including directors and CEO of Fiji’s corporate leaders and commercial sector.
The fact that they had invited Frank Bainimarama as their Chief Guest speaks volumes for the acceptability of the current government in Fiji and pragmatism of Fiji Institute of Accountants and Fiji’s business sector.
They appear to have recognized the reality of the situation and engaged with those who are in the driver’s seat, if Fiji was to be taken forward. Foreign Ministry of New Zealand and Australia need to take the cue from Fiji Institute of Accountants and adopt the pragmatism of the moment.
Australia and New Zealand can ignore and in fact despise Bainimarama, but they cannot ignore a country called Fiji with some 800,000 people who still regard its stronger neighbours as friends.
Bainimarama also did not give a damn for the Accountants when he slated the profession for dereliction of their professional responsibility and accountability. He may have a reason for this. Fiji is a small country where virtually most business people and accounting profession are closely connected. There are individuals from the business community who occupy partnership or senior positions in the accounting and audit firms. In some cases, the semblance of detachment, neutrality, impartiality and objectivity may be oblique. Hence such familiarity may breed complacency and the vested interest of retaining limited financial and audit business opportunities by accounting firms may contribute to dilution of the standards that we take for granted in New Zealand. Like Fiji’s democracy, it appears that its accounting and audit profession have also been seen to be flawed and wanting.
New Zealand and Australian media and their governments have been projecting Frank Bainimarama as a self-centered dictator with more brawn than brains. His latest attack which would have ruffled quite a few professional feathers did make good sense and logic but hardly made any news in New Zealand. Only those matters that show Frank Bainimarama and the Fiji Government in bad light seem to make news in New Zealand and our publicly-funded national broadcaster, Radio New Zealand is also one of the culprits. And that, ladies and gentleman, is the free and independent media of New Zealand.
BACKGROUND: According to Wikipedia, the Enron scandal, revealed in October 2001, eventually led to the bankruptcy of the Enron Corporation, an American energy company based in Houston, Texas, and the dissolution of Arthur Andersen, which was one of the five largest audit and accountancy partnerships in the world. In addition to being the largest bankruptcy reorganization in American history at that time, Enron undoubtedly is the biggest audit failure. This audit failure led to enactment of certain legislation that, among other things, increased the accountability of auditing firms to remain objective and independent of their clients. When this failure took place, overnight the local firm in Fiji with Arthur Anderson franchise jettisoned that name and adopted another international franchise and has since been operating normally.
Thakur Ranjit Singh is a post graduate student in Communication Studies at Auckland University of Technology (AUT).