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FRC chief allays fear of auditors, businesses

Promises to work in cohesion with other regulators


FE Report | October 24, 2017 00:00:00


Financial Reporting Council (FRC) chairman CQK Mustaq Ahmed on Monday tried to allay fear of auditors and companies about imposing irrational issues by the FRC and assured them of solving difficulties in coordination with other regulators.

"There is nothing to be worried … this council will not impose anything irrational on auditors and companies," he told a seminar, amid concerns raised by the auditors and businesses over possibilities of multi-regulations, duplications, overlapping and over regulations in financial sector after formation of the FRC.

Mr Ahmed said the FRC will coordinate with other regulators and fill up the gaps to ensure best corporate practices in the country.

"Concern should not be about regulations, rather concern should be whether regulator is helping to run the operations comfortably," he said.

Dhaka Chamber of Commerce and Industry (DCCI) organised the seminar titled "Financial Reporting Act 2015 and Its Economic Implication" at its auditorium in the capital.

The FRC chairman said that there must be some authorities to regulate reporting system though accounting professional bodies do regulate themselves. The people in the developed countries were not inherently honest, but they were properly regulated. "That's why they are developed," he added.

He also criticised the culture of bad loans in the banking sector. "If such culture of bad loans continues, no vision will be implemented."

The Institute of Chartered Accountants of Bangladesh (ICAB) president Adeeb Hossain Khan said the FRC should find out where there were gaps or shortcomings in the existing regulatory system -- be it the Bangladesh Securities and Exchange Commission or the Bangladesh Bank or the Insurance Development Regulatory Authority or any other regulatory body.

"Filling up the gaps or solving the shortcomings of the existing regulators would be the value addition on the part of the FRC instead of any sort of duplication or overlapping of regulatory activities," he added. It should be ensured that the business community do not face any new layer of problem on top of the existing ones, he said.

Speaking about the punitive measures of five-year imprisonment and a penalty of Tk 0.5 million in the law, he said the auditing has already become a low value job and the profession would not be able to attract right kind of talent for the job if such punitive actions exist.

DCCI former senior-vice president MS Shekil Chowdhury said the FRC will have to ensure that 'I would not face any hassle if I comply with all the rules and regulations'.

He said all the regulators were coming down only on the listed companies while there were 0.15 million non-listed companies doing business without following regulations properly.

DCCI director K Atique-e-Rabbani said that giving punishment should not be the only intention of the FRC.

In his address of welcome, DCCI president Abul Kasem Khan said that adequate resource allocation, availability of experts in the area of audit and other tools were needed to be made available to FRC to ensure transparency in the financial framework.

He said many countries have witnessed financial collapse due to non-compliance and lack of proper watchdog functions.

"Here in Bangladesh, where climate for creating such situation also exist and proper monitoring of the auditing and accounting activities under a regulatory framework is necessary to avoid such a collapse," he said.

Fellow member of ICAB, in his keynote paper, mentioned different positive aspects of the FRA, adding that the companies will have to make accountable for complying with standards, codes and guidelines as issued by the council.

He also stressed on mandatory appointment of expert accountants in publicly listed companies and timely preparation of financial statements to get the benefit of FRA.

Director of Bangladesh Bank Aftab Ul Islam said transparent auditing is necessary for reliable investment. The FRC should cooperate with the auditors, he added.

ICMAB president Jamal Ahmed Choudhury said the companies should provide correct information to the auditors while the Financial Reporting Act should be consistent with other financial regulatory policies.

He said that there was nothing to be scared of the FRC. Everybody should cooperate with the newly formed regulator.

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