Being fully aligned, ICAB expects effective and meaningful role of FRC
The alignment of role of the Institute of Chartered Accountants of Bangladesh(ICAB) with the Financial Reporting Council (FRC) is the sine qua non to promote transparency and integrity in the financial sector, and to make the FRC more effective and functional, the discussants told in a conference held on Thursday, 28 March 2019 at CA Bhaban in the city. The discussants also laid emphasis on increase of the audit fees which is the lowest in this region, to encourage the proper audit report.
Caption: As chief guest C. Q. K. Mustaq Ahmed, Chairman, Financial Reporting Council (FRC) was speaking at the conference while the Key Note paper presenter Dr. Javed Siddiqui, Senior Lecturer, Accounting, Alliance Manchester Business School, University of Manchester, UK, session chair A. K. Gulam Kibria FCA and ICAB President AF Nesarudding FCA seen on the dais.
The Members’ Conference on ‘Bangladesh: policy review on Financial Reporting Act (2015)’ was organized by ICAB. Dr. Javed Siddiqui, Senior Lecturer, Accounting, Alliance Manchester Business School, University of Manchester, UK., presented the Key Note paper in the conference. C. Q. K. Mustaq Ahmed, Chairman, Financial Reporting Council (FRC) was present as the Chief Guest while A. K. Gulam Kibria FCA, Partner, G Kibria & Co., Chartered Accountants and Past President-ICAB was present as the Session Chairman. Hundreds of Chartered Accountants attended the conference.
The Chairman of FRC C. Q. K. Mustaq Ahmed, said the government has introduced Financial Reporting Act (FRA) to restore the people’s confidence on regulatory bodies who are the responsible to bring discipline in the financial sector through protecting the interest of people. The economy of the country is expanding and the modes of financial transactions are becoming diversified. In this aspect, the chartered accountants have the skills to establish control over all the financial systems, he added. The Government wants not to control the chartered accountants rather it wants to control the public interest entities and the financial organisations through the auditors, the Chairman of the watchdog body said. Replying to the question regarding FRA, he said, FRC is interacting with the different stakeholders and in the course of time, to make the law more practical, government may bring amendment in the law.
The preparers of the financial statements play an important role in the financial reporting –they should be made accountable for any wrong and misleading reporting. Reasonable and respectable audit fee is a critical issue in ensuring quality audit, said AF Nesaruddin, President, ICAB. The President also pointed out three observations in FRA; formation of FRC, non-auditors like CIMA and CMA brought under the purview of the Act, and the provision of punishment. He urged the government to look into the matters to make FRC more practical in our country perspective.
Dr. Javed Siddiqui, said FRC may face some potential problem with expertise, resulting from the lack of presence of Chartered Accountants in its core functional areas. The Ministry of Finance might consider revising the existing formation of the FRC board so that the right balance between competence and independence can be achieved, he added. Alternatively, the ex-officio members (from MoF, MoC, Bangladesh Bank, NBR, FBCCI, BSEC) can nominate professional accountants who would represent these agencies in the board, the Bangladeshi origin UK professor suggested.
The keynote speaker described the present scenario of Audit profession in Bangladesh. He said, the implementation of IFRS and ISA is a challenge for many companies in Bangladesh. However, this is a mammoth task that will require significant resource commitments. The BSEC, even after 25 years of existence, still struggles to monitor the implementation of IFRS in listed public companies due to resource constraints, he added. The vast majority of accountants working in the PLCs do not have a professional accounting qualification, making implementation of IFRS difficult, he pointed out and said, if this remains unchanged, FRC inspections would not be very fruitful.
He also said, the FRC’s core functions do not include promoting standards and codes on corporate governance. Similar bodies around the world (like FRC in the UK) consider issuing codes on corporate governance (for companies) and stewardship (for investors) as one of their major functions, he added.