by Indrajith Karunarathna

Qualified Mmanagement Accountants make a substantial influence to the economy at both national and international levels. It is important to understand as to how they contribute towards the growth of an organization as well as the development of a country.

Management Accounting provides the capability of scrutinizing the operational activities in such a way that the information can be utilized for the purpose of optimizing the profitability. Further, the management accounting practices would deliver the required information in order to plan out the activities within an organization. Thus, the organizations would adopt the future resource allocations in an effective way under this context. Sri Lanka is equipped with many qualified finance professionals. Amidst these professionals, Management Accountants are superior as they are typically considered as the information hub. Sri Lanka as a developing country requires information to plan and forecast the future development goals. Thus, the Management Accountants who are practicing and working in the corporates provide a tremendous contribution when generating such information on time.

The management accountants are mainly responsible for examining economic facts, preparing future forecasts, mitigating enterprise risk, planning financials, optimizing resource allocation, strategizing, exploring performance against targets, providing financial insights for decision-making, and ultimately contributing to strategic planning. Moreover, financial accounting and bookkeeping practices are beneficial in order to report the particulars about the historical financial performance within a particular set of guidelines. Those practices are not future oriented whereas they are more in to comply with the typical statutory requirements, international standards and disclosures. Nevertheless, the management further requires customized operational and financial information that should support the effective decision making which should be future oriented. Management accounting practices should be able to provide the ability to use such information in a flexible manner so that a conclusive understanding can be easily reached. Hence, management accounting practices in this context should promote making the right managerial decisions.

In Sri Lankan context, many Sri Lankan companies are doing well in terms of traditional responsibilities, including working capital management, performing typical annual budgeting process and improving the control environment etc. They are reluctant to excel at evolving tasks such as implementing strategy formulation, validation, and execution and supplying effective business insights. A discussion is going on whether management accounting practices are evolving to keep step with the changing needs of companies operating in an ever more complex business environment. Since the management accounting has the capabilities of identifying as to how the operational efficiencies are optimized, many Sri Lankan top conglomerates are now utilizing qualified management accountants for this purpose. Also, in Sri Lanka it is recently observed a trend of increasing the usage of forward-thinking management accounting techniques and the changing way in which management accounting practices are productively being used: from an old-style monitoring and control perspective to a modern business and support-orientated perspective. Consequently, the role of the management accountant has exceled with both operating concerns and strategic priorities. The Sri Lankan management accounting climate describes the current trends in management accounting such as identifying some of the environmental changes, ESG sustainability exposures that are driving management accounting change and discusses the impact of integrated information systems and the availability of financial information.

Despite its many benefits, there are a number of implications associated with improving the understanding related to the management accounting practices in Sri Lanka. The actual discourse requirements related to the management accounting studies are needed to be effectively developed. Further, localization of the understanding related to the management accounting practices is very important. In other words, while understanding the general management accounting concepts, the regional and industrial requirements related to the subject area also needs to be identified so that specific management accounting tools which are required by the common industries in the region might have to be industrialized with the right focus. This would offer other management practices with the right tools and capabilities in order to understand the operations related to the organizations and then make sure that they take right measures in order to optimize the profitability and economic value additions of the overall industries. This would eventually lead to industrial capabilities so that these industries can effectively compete in the international markets.

Management accounting remains a separate theme that needs to be effectively explored. There are a number of management accounting tools that can be used for the purpose of evaluating the cost, revenue as well as operational implications within an organization. Besides using modern management accounting tools professionals should have the capability of customizing them in line with the specific organizational requirements. This is the reason as to why the professionals with the right knowledge and the skill set related to the management accounting theme remains vigorous. The organization in the context of refining the knowledge related to the management accounting practices also remains a timely requirement of an emerging nation such as Sri Lanka. On the other hand, since the necessity of the management information becomes mandatory many top conglomerates should recruit qualified management accountants to their senior positions and obtain such specialized knowledge to meet the upcoming consequences. Sri Lanka is an emerging economy that has recently faced with challenging economic circumstances and will continue experiencing the negative implications. This is the reason that many organizations should have the capability of focusing on sustainable cost management while improving the overall economic value addition. They have to be competitive in the international markets in order to grow in the future. These indicators provide positive vibes as to see the successful future of the management accounting profession which adds a numerous value not only to the organizations but also to the development of Sri Lanka and its region.

Indrajith Karunarathna is a Senior Chartered Accountant, Fellow Member of Certified Management Accountants Sri Lanka, Chartered Professional Managers, AAT, ACCA (UK), IPA (Australia), IFA (UK), Associate Member of Chartered Institute of Marketing (UK), a Qualified Risk Management Specialist, an Authorized Tax Representative, Registered Company Secretary and Company Auditor and holds an MBA and a BSc. Business Administration (Special) Hons. degree from the University of Sri Jayewardenepura.

By Hiran H.Senewiratne

The stock market was extremely bullish throughout yesterday and banking sector counters performed remarkably well due to positive debt restructuring developments. It is said that Citi Bank has been appointed manager for the exchange of bonds and for expediting the whole process and this created some impetus to market activities, market analysts said.

Further, the Official Creditors Committee (OCC) has given its consent to ending the debt restructuring process, thus enabling banking sector counters to perform well during the day.

Consequently, investor participation in the share market, inclusive of the retail and institutional sectors, has improved, while the turnover has also grown over the last few weeks, stock brokers said.

The All Share Price Index went up by 111.15 points, while S and P SL20 was by 51.72 points. Turnover stood at Rs 2.78 billion with seven crossings. Those crossings were reported in Commercial Bank, where 750,000 shares crossed to the tune of Rs 79.5 million; its shares traded at Rs 106, Central Finance 500,000 shares crossed for Rs 60 million; its shares traded at Rs 120, Sampath Bank 500,000 shares crossed for Rs 41.3 million; its shares traded at Rs 82.50, TJ Lanka 724,000 shares crossed to the tune of Rs 30.4 million; its shares sold at Rs 42, Pan Asian Bank 1 million shares crossed for Rs 20.8 million; its shares traded at Rs 189 and PickMe 520,000 shares crossed for Rs 20.3 million; its shares sold at Rs 39.

In the retail market top seven companies that mainly contributed to the turnover were; Sampath Bank Rs 311 million (3.75 million shares traded), Commercial Bank Rs 261 million (2.4 million shares traded), Pan Asia Bank Rs 255 million (1 million shares traded), Citrus Waskaduwa Rs 173 million (85.2 million shares traded), HNB (Non- Voting) Rs 109 million (620,000 shares traded), JKH Rs 100.4 million (531,000 shares traded) and NTB Rs 90 million (672,000 shares traded). During the day 169 million share volumes changed hands in 17722 transactions.

It is said that the banking sector was the highest contributor, especially Commercial Bank and Sampath Bank, to the turnover, while the manufacturing sector, mainly TJ Lanka and JKH, was the second largest contributor to the market.

Yesterday, the rupee opened stronger at Rs293.75/294.25 to the US dollar, from Rs 294.00/35 a day earlier, while bond yields were broadly steady, dealers said. A bond maturing on 15.12.2027 was quoted at 11.45/55 percent, down from 10.50/60 percent. A bond maturing on 15.02.2028 was quoted at 11.60/70 percent, down from 11.70/80 percent. A bond maturing on 15.06.2029 was quoted at 11.85/12.00 percent.

The Country Director of the Asian Development Bank (ADB) Resident Mission in Sri Lanka, Takafumi Kadono, along with a delegation, met President Anura Kumara Dissanayake today (07) at the Presidential Secretariat.

During the discussion, which focused on ADB’s ongoing commitment to support Sri Lanka’s economic and social development, the ADB reaffirmed its dedication to continuing its projects in Sri Lanka, with particular emphasis on bolstering key sectors crucial to the nation’s recovery. Tourism was identified as a critical sector that holds immense potential for Sri Lanka’s economic growth. In this regard, the ADB assured further assistance in developing tourism infrastructure to harness the sector’s full potential.

President Dissanayake highlighted the importance of promoting tourism in the Northern Region, requesting ADB’s specific support to develop this area. The ADB delegation expressed its willingness to collaborate and provide resources for this initiative.

Beyond tourism, the ADB also expressed keen interest in aiding the development of Sri Lanka’s energy sector, small-scale entrepreneurs, and financial sector, emphasizing their role in fostering sustainable economic growth.

This continued collaboration between Sri Lanka and the ADB is expected to contribute significantly to the country’s long-term development and recovery efforts.

Mr. Takafumi Kadono, Country Director ADB, Ms. Cholpon Mambetova, Country Operations Head ADB, Ms. Hasitha Wickremasinghe, Senior Economics Officer, Mr. K.M. Mahinda Siriwardana, Secretary to the Treasury and Ministry of Finance, Economic Stabilization and National Policies, Mr. D.A.P. Abesekara, Director General Finance Ministry and Ms. Udeni Udugahapattuwa, Director Finance Ministry, were present at the meeting.

[PMD]