Appointment of truly independent, impartial professionals the main challenge

Speakers at a panel discussion have identified the 'formation of proposed Financial Reporting Council (FRC) with truly independent and impartial professionals as the main challenge to make it implementable and enforceable.

The Institute of Cost and Management Accountants of Bangladesh (ICMAB) arranged the panel discussion on "Regime of Transparency, Accountability and Governance through Financial Reporting" at its office in the city Saturday.
The discussants were Abu Ahmed, Dhaka University Professor of Economics, Dr Muhammad Abdul Mazid, chairman of the Chittagong Stock Exchange (CSE) and former chairman of the National Board of Revenue (NBR), Dr Jamal Uddin Ahmed FCA, director of Power Grid Company of Bangladesh Ltd (PGCB), Dr Mahmood Osman Imam FCMA, Dhaka University Professor of Finance, and Dr Swapan Kumar Bala FCMA, managing director of Dhaka Stock Exchange (DSE)
Presided over by Mohammed Salim FCMA, president of ICMAB and Gerneral Manager (Finance) of PGCB, the panel discussion was moderated by its vice president Abu Sayed Md Shaykhul Islam FCMA.
FRC will be the supreme body under the proposed Financial Reporting Act (FRA) to oversee the auditing functions in the county.
Citing the overall works of securities regulator, Board of Investment (BoI) and Anti-Corruption Commission (ACC) as instances of crippling operation despite their vibrant inception, some discussants urged the authorities concerned to be cautious in forming the FRC so that it does not turn into such type of body later.
They also opposed having of membership of auditee and ex-officio at the proposed FRC to avoid conflict of interest and make the body functional and effective.
"Finding the absolute independent and impartial person (for FRC) will be the main challenge in forming the FRC."
Some of them said the oversight function of the FRC would have to be independent and self-reliant fully. "Only then, it will create desirable impact."
They also underscored the need for reliability of the FRC on its own fund for its independence.
They were also of the view to further look at the draft FRA and bring changes, if necessary, before its passage in the Parliament, so that the Act can spawn an effective and efficient FRC.
A discussant criticised the authorities saying that the proposed ADB fund prompted more them to pass the Act than the requirement of the country's audit sector.
Expressing dissatisfaction over some functions of the capital market regulator, he said, "Many companies are coming just to take money from the investors. In some cases, there are loopholes in the existing provisions, and the companies are taking advantage of those. But the regulator is sleeping."
Another discussant said that apart from the formation of FRC, disclosure of information by the companies concerned is another essential task to ensure transparency, accountability and governance.
"The proposed FRA will have to be passed hurriedly in this month to get the US$ 150 million in loan from the Asian Development Bank (ADB)" for the Capital Market Development Programme (CMDP), one of the discussants said.
ADB will disburse the fund to run the FRC in the first three years after its formation, he added.

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