MONTEGO BAY, Jamaica – Earl Jarrett, General Manager of Jamaica National Building Society, called on nation states to produce annual audited financial statements and use that as the basis on which to make decisions about their economic direction.
These balance sheets, he added, should record all the liabilities of the country and should be subjected to independent review by international auditing firms.
The call was made during Mr. Jarrett’s address to 80 participants from 14 countries attending the KPMG TOG (The Offshore Group) 2014 Partners’ Conference, which was held in Montego Bay, May 4 to 7.
“Nation states should produce balance sheets and accrue for liabilities to provide good quality data for investments and economic decisions; and to ensure that the decisions that are taken are underpinned at the core by the integrity of the financial data,” he stated.
Mr Jarrett’s charge came against the background of allegations during the recent Budget Debate in Jamaica that approximately $22 Billion of liabilities was not reflected on the budget of the current Administration.
Such a move, he opined, would present a true picture of the country’s economic health and improve the ability of nation states to attract international funding.
“This level of transparency would change outcomes significantly, which would affect the kind of funding nation states receive. It would also significantly expand the accountability of government ministers and others in treating with the state’s resources,” he continued.
The JNBS General Manager compared the growth of businesses in the Caribbean region to thestatus of the regional economies; and stated that, the contradiction in growth between the two was due, in part, to the quality financial data used to inform decisions.
“I am of the firm view that some of this simply relates to proper accounting at the state level; and ‘know-how’, in terms of the management of nation states; as well as, the people who are running businesses and those who are administering our governance,” he declared.
He pointed to the success of publicly traded companies, many of which are audited by KPMG, and the significant gains they have made as a result of producing independently audited financial statements.
“The success of these companies is indicative of the importance of producing quality accounting data to influence business decisions and outcomes. A similar outcome may also emerge for nation states, if such an approach is adopted in terms of their financial planning at the macro level,” he maintained.
Mr Jarrett encouraged the international audit, tax and advisory services firm to join the call to encourage nation states to adopt this practice; and, thereby, become more accountable to their citizens, lenders and donors.