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SPEECH FOR
DATO SERI PADUKA HAJI SELAMAT BIN HAJI MUNAP,
DEPUTY MINISTER OF FINANCE,
FOR THE LAUNCHING OF THE INTERNATIONAL ACCOUNTING STANDARDS IN BRUNEI DARUSSALAM,
2ND AUGUST 2000 ,
ORCHID GARDEN HOTEL

Yang Mulia Pengiran Haji Moksin and Yang Mulia Awang Haji Mohd Rozan, The Co-Chairs of the International Accounting Standards Technical Committee, Yang Mulia Dato Paduka Haji Yakub bin Abu Bakar and Yang Mulia Pengiran Dato Paduka Maidin bin Pengiran Haji Hashim, Permanent Secretaries of the Ministry of Finance, Honoured Guests, Ladies and Gentlemen.

Assalamualaikum Warahmatullahi Ta’ala Wabarakatuh and Good Morning.

I am honoured to be invited to be the guest of honour and to officially launch the International Accounting Standards as the Brunei Accounting Standards. The International Accounting Standards have been adopted and accepted throughout the world. It will be of no doubt that Brunei Darussalam will benefit greatly from adopting such a standard.

Ladies and Gentlemen:

Brunei 's priorities have remained the same in principle especially from the macro point of view. The Brunei Economic Council report has highlighted the micro aspect that needed to be tackled. The Council highlighted that in order to have sustainable growth requires an integrated strategy which strengthens government finances, private sector and foundations for growth. The government through the various agencies will carry out the tasks that have been identified by the Council's report.

Among the objectives of economic policies of Brunei Darussalam is to maintain and improve the standard of living of the people through economic growth, increased productivity and greater diversification of the economy. However the growth and development has largely been powered by government expenditures. This government driven strategy of development is unsustainable over the long term. The economic policies of Brunei Darussalam have not changed: essentially the objectives are to maintain and improve the standard of living of the people through greater economic growth, increased productivity and greater diversification of the economy.

But the government driven strategy of development has now been reviewed and greater emphasis is now being placed on the role and participation of the private sector in the growth and development of Brunei . The Council has identified that some assistance from the government is needed and a sum of $200 million will be allocated to assist the private sector.

At the same time, to give greater emphasis on development by the private sector, a number of steps are being undertaken. In the financial fields, we are forging ahead with our fiscal consolidation, including gradually restructuring the budget, gradually increasing revenues through additional and new charges and fees. Fiscal consolidation is also effected through commercialisation of certain government services, imminent corporatisation of government agencies as a prelude to their privatisation.

In the meantime, we have turned Brunei Darussalam into an International Offshore Financial Services Centre. We are pushing Brunei to be the Service Hub for Trade and Tourism (SHUTT) for the BIMP-EAGA Region.

Ladies and Gentlemen:

All these policies require a strong and stable financial and economic environment. The international financial sector has pushed for a new International Financial Architecture. In Brunei Darussalam, we have also played our part in joining the international financial community in creating a new financial architecture.

Among others, a strong accounting and auditing industry form part of this financial backbone. This in turn requires for the rules and standards governing the industry to be made standard, clearer and more transparent.

A common accounting standards need to be in place so that all the firms can audit and prepare financial statements which can be read by everyone else. An accounting standards based on the International Accounting Standards will mean that our companies’ financial statements can be read by the international community.

This can ease investors’ reservations when investing in our local firms. An internationally acceptable accounting standard will enable us to get more investments into our local firms and into our country.

Ladies and Gentlemen:

At the end of last year, His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam has consented to the first of a series of policy changes designed to increase local participation in the accounting and auditing industry. Yet at the same time, these policy changes will maintain the quality and standard of auditing of financial statements. Among others, the new rules require for all foreign authorized auditors to be present in the country for a period of at least 90 days a year, auditing firms to put into place a localization program over the next 3 years as well as making the pre and post qualifications more transparent.

This was put into practise when the licenses for authorised auditors were awarded for this year. As a result, in 1999 we had only 2 authorised foreign auditors resident in Brunei Darussalam but for this year we have 7 authorised foreign auditors in residence in Brunei Darussalam. This will also mean that currently authorised foreign auditors in Brunei Darussalam not resident in Brunei will no longer be awarded licenses in the future.

However I am sad to say that currently we only have 3 local authorised auditors and we still do not have any authorised bumiputera auditors in Brunei Darussalam currently. Hopefully with the localization program that we have in place, we will have more local and bumiputera authorized auditors in the future.

We welcome professional foreign auditors practicing in Brunei Darussalam. All we ask for in return is for them to assist and transfer their professional knowledge to our locals. We do not want foreigners who come into the country, earning money in this country but without any commitment and making any return whatsoever into the country.

The Ministry will continue to review the present rules. We want more accountable auditing and accounting professionals. We want to increase local and bumiputera participation in the auditing and accounting industry. Future plans include the possibility of upgrading the status of the Brunei Institute of Certified Public Accountants (BICPA) to be a more professional body capable of regulating all accountants and auditors in the country. In the long term, we will also be looking at the possibility of enacting a professional Accountants Act in line with our neighbouring countries.

Ladies and Gentlemen:

Accounting standards are crucial and central to the goals and policies of the Brunei Government. Our International Offshore Financial Centre is now in place. Banks, financial institutions that will be registering with us will be submitting financial accounts that will be certified by our local authorized auditors. Local support services will also be preparing financial statements. These tasks will be made much easier with the International Accounting Standards in place.

Ladies and Gentlemen:

We need to work together in ensuring that all these policies can be effected. This successful launching of the IAS by the The Technical Committee is an example. The Committee is made up of both the members of the Brunei Institute of Certified Public Accountants and officers of the Ministry of Finance. It has shown that the private sector and the government sector can work together successfully.

Ladies and Gentlemen:

I congratulate the IAS Technical Committee in their efforts to ensure that the International Accounting Standards as the Brunei Accounting Standards. I hope that the Committee will be able to complete this task so that the by the year 2002, all financial accounts will be submitted with the IAS standards. I look forward to the day when Brunei Darussalam joins the world in implementing the IAS.

Ladies and Gentlemen:

With the kalimah Bismillahirahmanirahim, I now declare the Launch of the International Accounting Standards. Wabillahitaufik walhidayah, wassalam mualaikum warahmatullahi wabarakatuh.
Thank you.

(c) Dato Selamat Munap/Rozan Yunos