Consulting With a Counterpart in Nepal.

Helping to develop the accounting profession in emerging countries is a responsibility that the Institute of Chartered Accountants in Australia takes to heart--and during the past year has taken to Nepal. Along with two colleagues, I've been traveling there with funding from the Asian Development Bank. The grant was awarded out of recognition that a properly functioning, independent accounting profession is essential to efforts by government and aid agencies to improve corporate governance and transparency in Nepal.

We've been working with the Institute of Chartered Accountants in Nepal, guiding the organization through needed internal change. Our work with the profession has been to analyze the Nepalese environment, prepare strategic and business plans for the accounting profession, develop boards for accounting and auditing standards, and deliver training programs.

Special challenges

The challenges for the accounting profession in Nepal are significant. Many leading government and private-sector organizations do not conduct an adequate audit of their accounts. Discretionary reporting of accounts--such as underreporting of profits by manufacturing entities, and failure to apply a disciplined approach to nonperforming loans in the banking sector--seems to be widespread. Our task has been not only to develop solutions to such problems and identify steps for creating a well-respected accounting profession, but to communicate to the Nepalese government, accounting firms, and the Nepalese Institute the enormity of the job involved in creating a viable professional body.

Expecting too much, too fast. One of the traps that these Nepalese stakeholders fell into was comparing themselves with the Australian profession and the Australian Chartered Accountant program, then expecting that Nepal could reach a similar standard within a short time frame. To help overcome this difficulty, we established a scholarship for a senior member of the profession and a key staff member to visit the Institute of Chartered Accountants in Australia. This proved invaluable in helping the Nepalese individuals put their challenges into perspective.

Being shorthanded. Another problem we faced was the shortage of skilled Nepalese volunteers at a time when the strategic plan required multiple task forces. Greater delegation to an enhanced management team and identification of talented young volunteers will provide part of the solution.

Outreach outcomes

The experience has been rewarding. By the end of our visits we will have left behind recommendations and structures that can be implemented in Nepal to build an effective and respected accounting profession.

For information about becoming involved in a similar project with the Asian Development Bank, go to www.adb.org.