Challenge
Suriname’s decades-long absence from global markets and engagement with the Bank severely limited its access to financial resources to support private sector-led growth. Key factors in this limited access were:
- A lack of reliable financial information about the family-owned small businesses seeking credit.
- A paucity of professional accountants and auditors.
- An absence of acceptable accounting and auditing standards.
All three factors are critical for the development of a vibrant capital market. They reassure potential investors that rational investment decisions are being made. As the Governor of Suriname’s Central Bank noted, “With only 35 qualified accountants Suriname cannot develop its private sector.” Moreover, regulators of the profession and of the financial reporting requirements lagged behind regional comparators.
Solution
The Government of Suriname sought to re-engage with the Bank by inviting a Reports on Standards and Codes Accounting and Auditing (ROSC A&A) mission to assess the country’s financial architecture as it relates to accounting and auditing practices and wider public sector financial management performance. From December 2010 through June 2011 a Bank financial management team worked with the Central Bank, the Ministry of Finance, the Office of the Auditor General, the Suriname Association of Accountants (SUVA), and others to clarify the challenges, propose remedies through a country action plan, disseminate findings, and offer assistance for next steps to improve the investment climate.
The first steps taken were to:
- Establish a sound legal and regulatory framework for the profession.
- Foster the technical skills of accountants and auditors.
- Strengthen the institutional capacity of SUVA and of educational institutions offering training in accounting.
Results
The ROSC process led Suriname’s policymakers to value better accounting as central to private sector development and more efficient use of public finances. More broadly, the ROSC ended a 30-year hiatus in Suriname-Bank engagement. It led the Government to adopt international standards on financial reporting and auditing and to seek wider Bank support for public sector reforms. The resulting public financial management reform strategy resulted in a US$300,000 Bank Project supporting the development of Suriname’s accounting and auditing standards.
In addition, the Government agreed to organize in 2014 the annual conference of the Caribbean Institute of Chartered Accountants. This event will facilitate training for local accountants and heighten awareness by policymakers and the public regarding the value of a strengthened accounting profession and improved accounting and auditing standards.
The ROSC initiative has also led the Government to build relations with the International Finance Corporation (IFC), which is collaborating in establishing a credit bureau and engaging in the area of public-private partnerships. Finally, building on the ROSC missions, the Government has sought to align itself with the Extractive Industries Transparency Initiative, which will have trickle down effects on wider government transparency and on financial and economic stability and anticorruption initiatives.