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S. A. Pasha's ArticlesS. A. Pasha's Articles

SUNDAY, 19 JUNE 2011

REPORTING STANDARD ON OPPORTUNITYLOSSES

Working in the public sector

environment evoke my soul many

times about the need of financial

reporting standard for discloser

requirements with regard of the

opportunity loss(es) if any pointed

out by the management/auditors

(whether internal auditors or

external auditors).

It is a serious issue especially in case

of state owned enterprises that are

not subjected to legislative scrutiny

by Auditor General of Pakistan (AGP)

or the Public Accounts Committee

(PAC) relating to the effective use of

public fund. The Board of Directors

(BOD) should consider about the need of the Accounts Committee

consisting of board of directors, whose report along with minutes of

meting should be submitted to Board of Directors and AGP or PublicAccounts Committee for review in good gesture for good

governance.

In the public sector it could also been observed that effective fund

management is missing. Public taxes/funds are usually been

placed/invested with lower rates of return although the opportunity of

higher yield fulfilling the organizational need as well as according to

the corporation policy is available. Beside the culprits this credit goes

to our bureaucratic attitude to obliged others and use the public fund

in personal interest.

As a policy matter it must be decided and instructed to all public

owned entities that placement could only be made to the highestreturn yielding financial institution, for contrary prior approval from

accounts committee / Board of Directors is required. The board of

the corporation must also give guidelines in regard of minimum credit

rating of the financial institution for secure placement.

The commercial audit wing of the Auditor General of Pakistan should

also perform a monitoring role for compliance for adopted standards

and good practices by state-owned enterprises. Monitoring role for

Public sector entities need to be improve. There is currently no Public

sector Enterprises Monitoring Boards as established in other

countries. This role is performed by the corporate wing of the

ministry of finance. There is little or no involvement of Auditor General

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