Experts alleged faults in auditing financial statements of businesses and public bodies and stressed the upgrading of ethical standards of chartered accountants to prevent financial fraud.
Speaking at a World Bank-funded seminar in Dhaka Saturday, they also suggested finalising the draft of the Financial Reporting Act (FRA) based on opinion of all stakeholders for the sake of proper financial reporting.
"The FRA should be finalised evaluating the opinions of the stakeholders and public discussions. At the same time, the problems will not be solved unless we look into how
the auditing standards can be developed," Faruq Ahmad Siddiqi, a former chairman of Bangladesh Securities and Exchange Commission (BSEC), told the meet.
He held the view that the ICAB had failed to come up with the expected level of expertise that could ensure due actions against the firms involved in fraudulent activities.
"It's also true that it's difficult for an elected body such as ICAB to be strong against their members," Mr. Siddiqi said about the limitations of the body of accountants whose role is vital for ensuring financial probity.
The past chief of the securities watchdog body raised a note of caution so that the Financial Reporting Council (FRC) in the making "does not turn into another bureaucratic organisation".
The seminar, titled 'Watching the Watchdogs: Political Economy of Public Accounting Oversight', was funded by the World Bank (WB) and administered by the University Grants Commission (UGC).
Mizanur Rahman, an associate professor at the Department of Accounting and Information Systems (AIS) of Dhaka University, also the project director, moderated the seminar held at the AIS.
Former chairman of the securities regulator Faruq Ahmad Siddiqi and its incumbent commissioner Prof Helal Uddin Nizami attended the seminar as chief and special gusts respectively.
Dr Jamaluddin Ahmed, former president of the Institute of Chartered Accountants of Bangladesh (ICAB), delivered the keynote speech at the seminar attended by the DSE (Dhaka Stock Exchange) Managing Director Dr. Swapan Kumar Bala, DU academics and the students of AIS.
BSEC Commissioner Prof Nizami said the securities regulator has to depend on the statutory audit reports of the CA firms and so they should act properly.
"Unfortunately, in many cases we have failed to get due supports from those ones. The BSEC issued letters to more than 100 listed companies due to shortage of due diligence from the CFO (Chief Financial Officer) and incomplete disclosure from the auditors," Mr. Nizami said.
He said in terms of legal and regulatory framework the position of the securities regulator is beyond question.
According to Mr. Nizami, around 40 per cent companies are fully compliant whereas 35 per cent are partially compliant in case of financial reporting.
"It's the time to perform an autopsy on the accounting system to be familiar with the fraudulent activities of the CA firms," Mr. Nizami added.
In his keynote speech, the former ICAB president, Dr. Jamaluddin Ahmed, stressed the need for a mechanism of the regulatory bodies to select the best CA firms to create a competition among the firms.
Mr. Ahmed shed light on the accounting scandals of the West having involvement with the globally recognised CA firms.
For proper financial reporting Mr. Ahmed also stressed the need for making available the required amount of audit fee to the CA firms.
"The fee of external auditors has been reducing whereas the consulting fee is being increased day by day," Ahmed added.
The DSE managing director, Dr. Swapan Kumar Bala, said the auditors do not face any music unless any complaint is made against them.
Among others, Prof Shibli Rubayat Ul Islam, dean of the Faculty of Business of DU, Dr. Mohammad Musa, a professor at United International University, Mohammad Selim, president of the Institute of Cost and Accounting Management Bangladesh (ICMAB), also spoke at the seminar.
