Although it is not clear when parliamentarians will debate the Cambodian Accounting and Auditing Standards draft law, which was approved last week by the Council of Ministers, advocates say its passage is vital to bringing Cambodia’s economy on-line with the developed world.
Undersecretary of State for the Ministry of Finance Ngy Tayi said he hoped the legislators will pass the bill by the end of the year, because such laws are necessary conditions for countries to obtain membership in the World Trade Organization.
“We cannot run business operations without a national accounting and auditing law. Without this law, we cannot run a stock exchange,” Ngy Tayi said.
Once the law is passed, every company, both public and private, will be required to follow it, Ngy Tayi said. The law conforms to international standards and is similar to legislation used in 126 other countries, he added.
“It is not a French system or an American or English or Anglo-Saxon. Our accounting law is international. I did not make it alone. I invited many experts of accounting to the talks, and they came from America, Australia, France, Singapore, the [Asian Development Bank] and the European Union,” Ngy Tayi said.
The law could also help the government with tax collection and public accountability because it tightens government budget management of both the public and private sectors, Minister of Finance Keat Chhon told a conference early last month.
Some opponents of the measure say the government put the law together without enough input from the private sector.
“I read it. It seems like a complicated accounting system. I can’t understand what it means exactly. I think the Ministry of Finance should have invited all the country’s accounting experts to issue free ideas around this accounting law,” said Heng Vanda, principal at the Vanda Faculty of Accounting.
Its international characteristics will undermine a great many students currently studying accounting, Heng Vanda contended.
“We teach students the American accounting system and the British, Anglo-Saxon systems. I believe [countries] everywhere are using the American system, like most of the countries of the world are using the US dollar,” he said.
Various accounting systems use different languages and different calculations as their base. The international style is supposed to be a composite of the systems, Rural Development Bank president Sor Koun Thor said.
The legislation currently under review will help private businesses, but not non-profit NGOs or government ministries because they use different systems, Heng Vanda said.
The law as structured will also require a massive reprogramming of computers and software, Banana Center spokesman Sok Keoun said. Most of the computer systems in the country use programs based on the Anglo-Saxon style of accounting, he said.
While the Banana Center is willing to conform to national standards, the proposed laws stymie thousands of students, according to Sok Keoun.
“Thousands of students have already learned Anglo-Saxon,” he said.
But most of Cambodia’s biggest businesses already use the supposedly more complex International system, so the transition will not be as difficult as critics make out, according to a government banking and stock exchange consultant who asked not to be named.
The law is designed to bring some regulation to the way Cambodia’s government and enterprises keep their books, the consultant said.
While acknowledging the law can be complicated, and could cause problems for some, it is needed to bring some sense of order to Cambodia’s often chaotic government and business climates, Ngy Tayi contended.
“It is the spine law of any economy,” he said.
(Additional reporting by Pin Sisovann)