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"id": 196535,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/196535/?format=api",
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"type": "speech",
"speaker_name": "Mr. Mungatana",
"speaker_title": "The Assistant Minister for Medical Services",
"speaker": {
"id": 185,
"legal_name": "Danson Buya Mungatana",
"slug": "danson-mungatana"
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"content": " Madam Temporary Deputy Speaker, I thank you for giving me this opportunity to make my small contribution to the proposed Accountants Bill. As we can seen from the Memorandum of Objects and Reasons, one of the most important things that this Bill aims to achieve is to regulate the accountancy profession. Every time we talk about Bills to control professions of any calibre in this House, ordinarily, the thrust of most of the arguments goes towards the ethics and the professional conduct of the various professions. Madam Temporary Deputy Speaker, my argument, therefore, would be strongly based on the proposed Clause 30 on Professional Misconduct of the members of the accountancy profession. It proposes to create certain types of professional conduct and subject violators to disciplinary action. If you look at what has been proposed under this clause, you will see that there is a good attempt at defining some of the offences that could be deemed to be the subject of professional misconduct. There is, however, one thing which needs to be pointed out. Accountants are probably the most important professionals when it comes to keeping public money. There is no scandal that has taken place in this country - be it Goldenberg or Anglo Leasing and all the others we have read about in the Reports of the Public Accounts Committee (PAC) and the Public Investments Committee (PIC) - in which accountants have not been involved. Madam Temporary Deputy Speaker, I want to believe that not all the accountants would have been willing to participate in those scandals, or that they would have kept silence when those cases of misconduct were happening; if there was a way for them to be protected. This Bill has omitted a whole section on the protection of whistle-blowers in the accountancy profession. There is no protection at all! If there is an accountant who is employed, for instance, in a public organisation such as the Kenya Ports Authority (KPA) or the Kenya Ferry Services (KFS), who finds out that there is something wrong going on in the manner in which the accounts are being presented, or something is being hidden, there is no provision in this Bill to enable them to safely give that information and retain their jobs. So,the Minister needs to look seriously into provisions that will cushion accounts who want to be honest and patriotic and who would want to practise their profession with dignity. Madam Temporary Deputy Speaker, to this end, I propose that a whole new clause that talks about accountants and whistle-blowing as well as the way they can be protected within their profession, be created under this Bill. I support very much the sentiments by Members here who said that it would be necessary for this Bill to be referred to the relevant Departmental Committee before it is passed by this House. I hope that we will not close debate on this Bill, because we need to introduce certain clauses which are important and nationalistic in nature, and which will help to protect people, who want to be honest, from being removed from their jobs when they tell the truth. April 16, 2008 PARLIAMENTARY DEBATES 497 Madam Temporary Deputy Speaker, there is another section that has been excluded from this Bill. It is not the first time that we are regulating professions in this House. We did so when were dealing with the rules regarding the operations of quantity surveyors, architects and so on. Even the Law Society of Kenya, which is the one that we have referred to many times, has rules which show the ethics that professionals are supposed to uphold. Looking at the Law Society of Kenya Act, for example, there are rules which have been made, every member of the public would know that lawyers who are in active practice are supposed to uphold certain ethical standards, which are included in the Act. The public knows about it. However, in the proposed Accountants Bill, the rules or ethics, which are supposed to be clear to each member of the public, have not been set out. This is a very critical omission. It is my prayer that when this Bill is referred to the relevant Departmental Committee, its Members will be able to take advice from accountants who will come up with specific rules showing, for instance, that if an accountant does something in a certain manner will be deemed to have breached ethical standards and, therefore, a certain consequence will follow. The 26th President of the United States of America, Theodore Roosevelt, once said: \"To educate a person's mind and not his morals is to educate a menace in society\". To educate a person's mind and not his morals means to educate that person, but leave alone ethics. Therefore, the ethics that this profession needs to uphold must be very clear to every member of society. This also goes towards consumer protection. A notice of Motion has already been given to this House, of our intention to bring a Consumer Protection Bill. How will a consumer of the services of accountancy know that he has been cheated, or that he is being treated unethically, if the ethical standards of the accountancy profession are not set out clearly in this Bill? Madam Temporary Deputy Speaker, I would urge that for that particular section, when the relevant Departmental Committee on Finance, Planning and Trade will be looking at this Act before we take it to the Third Reading, they will get a chance to add that important section to it. If you turn to the proposed Clause 11 of this Bill, it proposes to create a membership of the council. That council of the accountants is to consist of 11 members: There is the chairman, one member to represent the Ministry responsible for Finance, one person from the Capital Markets Authority (CMA) and so on. Then, there are six other members elected in the manner provided for in the Second Schedule. It has been a tradition in this House that whenever we are constituting boards, the rule has now been that we must reflect gender. The rule that the proposed Clause 11 is setting up is not categorical that there will be a specific number of ladies to sit in that membership of the council of accountancy. We need to legislate on what we speak outside. We have said that we want to bring our women up and I believe that this council must have a third of its membership from the fairer gender. Madam Temporary Deputy Speaker, it has also become a tradition now that whenever we are constituting boards through legislative action, we would always take into consideration regional distribution. So, I would urge the Minister and the relevant Departmental Committee to put in a section that regional representation will be reflected in the constitution of the council of the membership of the accountants. Why? Because the practice of accountancy and the experience they have in the coast region may not necessarily be the same--- Maybe, the conditions of practice are not the same in Nairobi or Eastern Province. That is why, even when you look at the Law Society Council of Kenya, you will find that there is a clear provision for regional representation. I also wanted to add my voice to Clause 13. It talks about the registration committee. Two of the members of the registration committee are supposed to be a user of accountancy services; one member not being a member of the institute nominated by the council to represent the users of accountancy services. That could be anybody and it is the reason why in a country like the United Kingdom from where we heavily borrow most of our legislative practice, they would allow for a person who is not necessarily a technical person of that particular profession to attend any meetings 498 PARLIAMENTARY DEBATES April 16, 2008 that are necessary with a technical advisor where it is necessary. But that provision here is missing! So, that means there will be one person who will come. He is a consumer of accountancy services. He could be a butcher or any profession outside accountancy. He will be coming to make important decisions and he does not have technical advice. The likelihood is that he will not provide quality contribution towards that board. What is going to happen is that he will be one of those floaters. He will just be one of those people who are added or lobbied towards making decisions which may not necessarily be useful to the country. Madam Temporary Deputy Speaker, on Clause 9, I wish to commend the Minister for proposing that the council of the institute shall issue standards of professional practice, including accounting and auditing standards which shall form the basis of accountancy practice for members of the institute in their preparation of financial statements. I would be much more comforted if an extra line is added there that would say the standards should keep up with international standards of the practice of this profession because in most occasions, the accountancy practice that we have here in Kenya borrows heavily from the practice and traditions of the English accountants profession. It would be good if we can measure the standards of our own professions here against the standards of the profession that is practised outside, so that our people and investors can have the same confidence in putting their money here as they would in putting their money in a country that is outside Kenya or in any other city, if our standards are such that they can compare to international standards. I would urge that, again, when the Minister is finalising, he should consider adding that provision. That is because this statute must be very carefully considered. Madam Temporary Deputy Speaker, we had a very bad experience where, in the Ninth Parliament, we passed what, in our opinion, were very good labour laws. However, today in the Press, we have read that the Law Society of Kenya (LSK) going to court to challenge one or two clauses within the same law that we passed. What happened, and I will testify, is that when we were passing the labour laws at that time, we were in a hurry because the International Labour Organisation (ILO) was meeting in Geneva and Kenya needed to file its report that we had made a lot of progress in terms of passing our legislation. What then happened is that some of those clauses were slipped in and now that legislation is in court for its constitutionality to be challenged. It means that, if it is declared unconstitutional or those clauses are declared so, then we have done zero work! I would urge that we go slowly over this one; we should not rush it. We should send it to the relevant Departmental Committee so that it is checked with a tooth comb so that, when it comes out, we do not have those other problems accompanying it. Even more so, today, we have read in the Financial Post - some newspaper that was circulated in the pigeon holes - about the most profitable banks; the best performing banks. If you look at that, what we are relying on are financial statements that have been done by accountants. If we do not create proper standards for them, then people are going to \"cook\" a lot of those financial statements. We are going to be fed with that information! Madam Temporary Deputy Speaker, as a result, the Kenyan public will buy shares in the stock exchange based on false information because we did not set the standards here. We might end up giving a lot of losses to many Kenyans because we did not do our job properly. Madam Temporary Deputy Speaker, I am sure that other Members would want to look and add more to this Bill to make it better. It is a good piece of legislation, but it can be made better. I hope the Minister, and the relevant Departmental Committee, will take all those concerns to make it better. I beg to I support."
}