By Kyriakos Iordanou, General Manager – Institute of Certified Public Accountants of Cyprus
Recently I had the opportunity to visit China as an official guest of the Chinese government and the Chinese National Audit Office (CNAO). It was an honour for me to represent ICPAC at the international seminar organized by CNAO which was addressed to Supreme Audit Institutions. So had the pleasure to be among the Auditor Generals and Deputy Auditor General of other six South-Eastern European countries.
The overall experience was fantastic but, I have to admit, I returned with mixed emotions. On the one hand, I was overwhelmed with what I encountered in China and the unique hospitality enjoyed, and, on the other hand, I couldn’t refrain from comparing what I saw there with the actual reality in Cyprus!
It was a truly eye and mind opening trip. If I were to summarize the lessons learned, i would do it in three simple words: Vision – Strategy – Commitment!
The Chinese government is clearly working with a vision, set not so far in the past, deploying relevant strategies, employing all necessary resources and remaining dedicated and committed on their goals and targets.
Although the Chinese National Audit Office was only established around the 80’s, what it has achieved is magnificent. It currently employs more than 95.000 staff (!!!) and performs audit work on all governmental institutions and companies owned by the State. It is committed to continuous training at all levels, hence they have their own academy based in Nanjing, at the Nanjing Audit University whose premises and facilities are shared.
Fundamental element in CNAO’s work and training is technology, exhibiting a successful adaptation of its operations to today’s advanced technological era. To mention just an example, CNAO changed its auditing strategy in 2004 as the available internet speed at the time was considered slow and insufficient (ie only 10mbps!!!). Compare current internet speeds in Cyprus for business or home use . . . No further comment! In addition, CNAO introduced big-data audit techniques on a large scale in order to foster efficiency and minimize costs! This also helps significantly in ensuring that the audit results are predominantly objective, free from bias, obtained on time and derive from a wider and deeper evaluation.
Furthermore, CNAO’s mandate also includes what it calls a “performance and accountability audit”. Thus, CNAO reviews the performance of the government officials versus the results achieved, while investigating whether those officials have taken advantage of their position for personal benefit!
It is obvious that China has decided to become a world leader in a number of areas and the country is hugely investing in order to achieve this aim. They decided that becoming more outward looking and learning from others will improve them further. They pursue to partner with states and international organisations on projects outside China, giving special emphasis to developing their networks of cooperation.
To demonstrate the above, I had the honour to be hosted during my stay at three official dinners with the Deputy Auditor General, the Auditor General herself and the Vice Mayor of Shanghai, respectively.
Shanghai is an example that ought to be followed all over the world. In just 25 years, the authorities have turned the place around, converting the city into a spectacular creation. Despite its size (more than 24 million permanent inhabitants) Shanghai is a blend of a traditional Chinese city and a western type metropolis, where vision, perception, design, construction and execution combine perfectly with environmental concerns. The result is phenomenal! And as the Vice Mayor said, Shanghai is very much interested in further development and cooperation with the rest of the world to render the city a global financial – shipping – tourist – technology – trade – innovation centre. This is their vision and everyone is working relentlessly to realise that.
Goals have been set and strategies designed in a manner that would best support this vision and everything is underpinned by latest technological advancements, which are the cornerstones of the city’s growth and development. This is their new culture. They work on the future in today’s terms, or, to put it differently, they work today for tomorrow!
So, coming back to our reality now, we can easily spot the differences.
It is crucial that we go back to the drawing board in order to define our vision for the country, the economy and each sector individually, with all being congruent. We need to be honest and realistic in identifying our core competencies and our comparative advantages. This calls for a collective effort, where nobody can be spared, ie the political establishment, the public and private sector, academia and, of course, the younger generation of this country. In my opinion, it is of paramount importance to summon the institutional stakeholders of the economy and society rather than individual persons, as current practice stands, so that to avoid possible conflicts of interest and engage those stakeholders as entities.
We must then devise our long and short-term strategies and policies, coupled by the necessary resources and means, and given our objective capabilities. In order to accomplish the above, commitment, dedication and consistency are essential.
At the same time, our future and modus operandi has to be based on technology, passing into a digital transformation phase and rendering Cyprus digital. It is about time to think outside of the box, and foresee the society, economy, business we want to have in the near future and start to work on it from today, in a defined business plan.
All of the above need to be structured within a clearly defined vision and embraced by a new culture, where all of us would be stakeholders. Should we truly decide to move onwards, there would be no alternative, no turning back. We only need to learn from better examples, adopt best practices, adapt to the new state of play and improve; otherwise, we are doomed to remain stranded in our nirvana, lagging behind the rest of the developed world! The need for a vision at national level is more than urgent.