Root of the problem

This refers to the article ‘Surviving without IMF!’ by Ashfaq Tola (December 6, Money Matters). One is compelled to say that were it not for the aggressive treatment of accounting policies in this country, it would probably not be in the fix it is in. It is, after all, true that the corporate sector has always worked to maximise its wealth through various accounting techniques. A conservative estimate of tax evasion puts the figure at well over Rs300 billion annually.

Balance sheets and profit and loss statements are not true representatives of the economic performance of an entity. In the absence of earning management disclosures, and tight regulatory controls, it is but fait accompli that we will continue to descend deeper into the quagmire of vicious multilateral and commercial debts. It is amazing that those committing the most heinous crime of widening the chasm between haves and have-nots, only consider rape and brutal murder to be punishable crimes. It is imperative that all the stakeholders of the economy sit together and agree on the generation of a regularised financial statements for entities instead of a range of financial statements meant for different stakeholders. We must rein in this unbridled profession. The Securities and Exchange Commission of Pakistan, Institute of Chartered Accountants of Pakistan and the Institute of Cost and Management Accountants of Pakistan should work to create better governance of the corporate sector of the country.

Waseem Afzal Jadoon

Abbottabad