Financial reporting law being final sans consulting stakeholders

Mohammad Mufazzal | Published: September 05, 2014 00:00:00 | Updated: November 30, 2024 06:01:00

Stakeholders, including the securities regulator, expressed their concern as they are still in the dark about the content of the draft Financial Reporting Act (FRA). The draft is already being vetted in the law ministry for shaping it into law.
According to them, proper financial reporting and liability of the auditors will not be ensured if the Financial Reporting Council (FRC) is formed under the law without ensuring the participation of relevant stakeholders.
They also claimed that secrecy is being maintained in finalising the draft of FRA bypassing the opinions of stakeholders like Bangladesh Securities and Exchange Commission (BSEC), the Institute of Cost and Management Accountants of Bangladesh (ICMAB) and the Institute of Chartered Secretaries of Bangladesh (ICSB).
The complexities arose when the Institute of Chartered Accountants of Bangladesh (ICAB) opposed the participation of the ICMAB in the proposed FRC which will be formed under the FRA.
While talking to the FE, the officials of the securities regulator said they would raise concern and opinion so that the spirit of proper financial reporting is reflected in the FRA.
Official sources said the BSEC representatives are likely to meet the finance minister soon to put forward their suggestions as to how the FRA can ensure the companies' proper financial reporting and good governance.
Mohammad Sanaullah, a former ICSB president and incumbent councillor, said the company secretaries play the role of secretary on audit committee and are also responsible for companies' good governance.
"The ICSB has involvement with the companies' good governance. Then, how is it possible to form the FRC bypassing the ICSB?" Mr. Sanaullah questioned.
He expressed his deep concern over the secrecy over formulating the FRA draft and said it's their 'legitimate' right to be inducted in the FRC.
"The securities regulator has to face difficulties due to window-dressed balance sheets of the listed companies. That's why the securities regulator first moved to formulate the FRA," said a BSEC official, on the condition of anonymity.
"But, it's a matter of great shock that the BSEC is yet to know the developments so far brought in the FRA."
Earlier, a delegation of the ICMAB called on the finance minister and made the plea for ensuring their participation in the FRC.
The representative of the ICMAB recently had also called on the secretary of law ministry and upheld their opinion regarding the formulation of the draft of FRA.
"It's also a matter of concern for us as we do not know about our participation in the proposed FRC. The secretary of law ministry, however, has said that he would talk to the finance minister about the FRA draft," ICMAB President Mohammad Selim said.