Speakers at a programme on Saturday suggested setting the lowest audit fees for banks, financial institutions and other corporate bodies.
They also said audit firms should be allowed to provide non-auditing services through regulatory reform for the sector's better survival.
The suggestions came at a virtual conference on 'Audit Regulatory Reforms in Bangladesh - The Way Forward,' organised by the Institute of Chartered Accountants of Bangladesh (ICAB).
The Comptroller and Auditor General of Bangladesh (CAG) Mohammad Muslim Chowdhury addressed the programme as the chief guest while Financial Reporting Council (FRC) chairman Professor DrMd Hamid Ullah Bhuiyan spoke as the special guest, with former ICAB president Muhammed Farhad Hussain in the chair.
ICAB president Muhammad Farooq delivered the welcome speech and associate professor of Financial Reporting at Alliance Manchester Business School Dr Javed Siddiqui presented the keynote paper at the programme.
Delivering his speech, Mr Chowdhury said there are many allegations that audit firms make substandard and flawed financial reports for financial institutions, but attention should be paid to why that happens.
"If good governance is not ensured in the corporate sector of the country, how will the audit firms prepare good audit reports for companies having weak audit committees?" he questioned.
Referring to low auditing fees, he said, "Audit firms can't survive by only providing auditing services; they should be allowed through regulatory framework to offer non-auditing services."
Giving the example of 'Big Four' -- a nickname for four biggest accountancy firms such as Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers -- the CAG said these companies mainly provide non-auditing services, which attract their clients to take auditing services too from those firms.
In his presentation, Dr Siddiqui said the FRC can set minimum fees for quality audit as the fees are one of the lowest in the world.
He said the quality of financial reports will not improve if corporate governance in the country remains the same.
Ownership concentration and family dominance in the corporate sector is one of the biggest constraints to ensuring corporate governance in Bangladesh, he argued.
He also said weak regulation in the capital market is another reason behind the absence of quality audit reports while there is also a lack of strong legal infrastructure to deal with financial sector anomalies.
Dr Siddiqui said audit ecosystem has not improved that much over the years as authorities take prescriptions from various development partners, which usually ignore the local context and share experiences in other countries instead.
Future reforms should take a more holistic view of the problems relating to the auditing profession in Bangladesh and suggest interventions based on consultations and evidence, he recommended.
Citing one of his studies, the FRC chairman said apart from lower fee rates, audit firms in the country don't have sufficient resources to handle the number of clients for preparing good reports.
More professional accountants are required in the country and to do so payment structure needs to be made attractive to encourage talented youths coming to the profession, he said.
He also said a strong collaboration among stakeholders like the Insurance Development and Regulatory Authority of Bangladesh (IDRA), the Registrar of Joint Stock Companies And Firms (RJSC), ICAB, ICMAB, FRC, Microcredit Regulatory Authority (MRA) and Bangladesh Securities and Exchange Commission (BSEC) is needed to develop a good auditing ecosystem.
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