U Win Thin: “Auditors need to make their opinions known clearly and candidly.”

AUDITORS in Yangon have said it is difficult for them to give the government accurate records of a company’s accounts for tax purposes because many Myanmar firms either falsify or do not provide sufficient financial data.

Speaking at a seminar on auditing procedures last month, U Khin Win, an independent auditor and a member of the Myanmar Institute of Certified Public Accountants, said insufficient records provided by companies were one of the main reasons the Internal Revenue Department was suspicious of the private sector’s tax payments.

“Auditing firms are finding it very difficult to obtain all required data from companies, which serve as the basis for all the financial statements,” U Khin Win said.

Myanmar companies must hire auditors recognised by the Myanmar Accountancy Council to prepare financial statements for the government, which are then used to determine taxes owed. The IRD frequently rejects financial statements on the grounds they are fraudulent.

Auditors, however, said they were caught between an obligation to present the companies employing them as accurately as possible and trying to please the firms so they could get repeat business.

“The majority of auditing firms here don’t give their true opinion on the financial statements of the companies that hire them due to fears they will not get the job next time,” said U Kyaw Tin, managing director of SGS Company.

U Win Thin, an accountant with Win Thin and Associates, urged companies to cooperate with auditors and reminded accountants they were responsible for acquiring all relevant information – a role that has led many companies to view auditors as working for the government even though it is the firm that must hire and pay them.

“If the management fails to provide all necessary data, the auditor needs to make their opinion known in the financial statement clearly and candidly,” U Win Thin said.

“Auditors must be honest, independent and professional, without showing bias.”

Under the Myanmar Companies Act, both the management of a business preparing its financial statement and the auditing firm giving its professional opinion on that statement can face legal action if the IRD suspects inaccuracies.

The Auditor General appoints recognised accountants to audit financial statements for state-owned enterprises and joint ventures in which the government is a partner.

Internationally, most countries practice a self-assessment system of taxation, wherein the use of a certified accountant is optional.

IRD director general U Sun Tun told businesspeople in October last year the department was considering introducing a self-assessment model to Myanmar.

However, officials from the department have said separately that the IRD remains hesitant to implement such a system due to concerns it would allow companies to further evade taxes, a problem the government has acknowled-ged is widespread.