Laos to adopt international accounting standard
Laos to adopt international accounting standard
The Lao accounting system will be reformed to meet the international standard once the government promulgates its newly revised accounting law.
The revised law is expected to come into effect later this year following its approval by the National Assembly last December, which gave the government the green light to adopt the international accounting standard.
Policymakers who drafted the law said the government's decision to adopt the international accounting standard was necessary because the country is now a member of the World Trade Organisation and will be part of the Asean Economic Community from 2015.
Accountants who work for international companies are facing difficulties writing accounting reports as they have to follow international accounting standards but Lao law does not encourage them to do so.
The policymakers said the revised law would make it easier for international companies to run businesses in Laos.
The government is currently encouraging international firms to invest in the country to boost and sustain national economic growth.
The revised law will make it easier for owners of international companies in Laos to audit the income and expenditure of their businesses, according to the drafters of the legislation.
The improved accounting system will make doing business in Laos easier but will also help the government collect revenue from businesses accurately by tightening gaps in the law that were causing revenue leakage, they said. The government is encouraging businesses to adopt the international standard accounting system to give tax officials a reference to go by when collecting taxes. At present, most small and medium-d enterprises do not have accounting systems and so pay their taxes by estimating their income.
An improved accounting system will also create conditions for more local firms to list themselves on the stock market, with transparency one of the main conditions for listing.
The government is encouraging companies to list on the stock exchange so they can gain access to long-term investment funds.
At present, the Lao stock market demands the companies that list on it have their auditing work carried out by a few select companies, all of which are international auditing firms.
The stock market wants to see the hundreds of local Lao auditing firms lift themselves to meet the international standard.
Once the government promulgates the revised law educational institutions in Laos will be encouraged to revise their accounting curriculums so new graduate accountants will be familiar with the international standard.
vientiane times
