Audit practice manual under twinning project
Monday, 9 November 2009
M. A. Kamal FCA, FCMA
A news was published on October 28, 2009 in the Financial Express to say that the President of The Chartered Accountants of England And Wales (ICAEW) visited Bangladesh recently to sign an agreement with the Institute of Chartered Accountants of Bangladesh (ICAB) to work jointly in the development of chartered accountants' (CA) profession in Bangladesh. The agreement was termed as historic for ICAB. That ICAEW and ICAB jointly developed a manual called Audit Practice Manual (APM) for Bangladesh came as an item of the news. Earlier in April, 2009 in a message given by the Executive Director, Professional Standards, ICAEW in the above manual, publication of the manual was termed as a great milestone for ICAB.
A discussion on APM was felt necessary by me, because (1) out of 234 pages in it description of audit procedure covered 49 pages, rest of the pages contained 75 forms in which 2236 rows were created by copying from another text to record information by the auditors, (2) auditing is a function which experienced accountants/auditors can perform without reference to any manual (I served as Senior Auditor for over two years in the office of Auditor General, Govt. Of Libya and did audit of good governance practices in the Office Of Road And Highways Department under an Asian Development Bank (ADB) financed project without working as auditor in my service life), (3) APM's preparation needed more than six months, (4) a project undertaken by ICAB in the year 2002 with financial assistance from the World Bank (WB) for development of accounting and auditing standards in Bangladesh ended largely in failure due to the apathy shown by ICAB authorities and (5) ICAB is not the implementing agency of the current project, but is its beneficiary which has made the main role player, i.e. ICAEW partially unaccountable to ICAB.
I attempted a number of times to make ICAB authorities hold a discussion on APM among its members. A pool of knowledge and experience was needed to make the manual useful. But my request was rejected on one ground and another by ICAB authorities. On August 5, 2009 President ICAB informed me that he would cause review of my observations by Project Development And Implementation Committee of ICAB. The review was not done.
Having in the practice as an auditor for a little over one year, I felt it necessary to study APM to know the subject better. Purpose of the manual is to enhance auditing capacity and quality of Chartered Accountants (CA). My study of the manual has proved that it is far from being a good guidance for practising CAs.
For the first time I commented on the manual was on June 20, 2009 in a seminar held in ICAB. The seminar was under Continuous Professional Development Programme on a subject other than auditing. The seminar provided me an opportunity of letting a large number of members of ICAB present in it about the quality of the manual. Chairman of the seminar did not allow me to present my views. However, I was asked by the President, ICAB to give my views in writing to the institute. The President further said that since the manual was prepared by ICAEW, its representative would make response to my comments. But in the news published on October 20, 2009 in the Financial Express, it was reported that the President, ICAB mentioned the name of his institute as co-author of the manual. I requested the President to let me know what role and by whom the role was played in the preparation of the manual. The President preferred to remain silent. I became inquisitive, as I was in the implementation of large projects in my past work-fields in autonomous bodies.
I informed the Minister in charge of Ministry Of Commerce (MOC) about the poor quality of findings made by me in the manual. The Minister asked me to contact his office for further discussion. But, I informed him that my findings were yet to be known to the agency created in MOC for implementation of the project under which the manual was written. I requested for giving me sometime to inform the implementation agency of my findings in the manual. The Minister granted me the time. I talked with the Director of the Project who advised me to put my comments in writing and submit to him. I did that on July 6, 2009. I also submitted the comments to the President, ICAB
The shortcomings in the manual were specified by me in a report which was submitted on July 6, 2009 to the President, ICAB and the Director of the above project
ICAB submitted to me the replies to the comments I made on July 6, 2009. I studied those and found that a good number of the replies given by ICAB, in fact by ICAEW, was not acceptable from the ground of reality and a good judgement.
It was pointed by me in my reports that the manual contained some statements which were not befitting to CA profession, some statements were filled with emotion rather than rationality. In one case, where the reply of ICAB/ICAEW was found erratic, instead of admitting the mistake, ICAB/ ICAEW cited another case in defense of its statement. That also was found erratic. The most serious shortcoming of the manual is that auditing practices were not laid in it in a logical and systematic manner. As a result, the manual did not show a road map through which an auditor will do his work to reach his destination. I have made eight recommendations to make the manual systematic and easy for implementation. Therefore, I suggested that the manual be re-written to serve its purpose. But ICAB authorities have done nothing to revise the manual. My comments can be seen in website- www.akamal.c150.com
Any assumption that, since the manual is the outcome of a joint project between ICAB and ICAEW no shortcoming or mistake can remain in it is wrong. This land of to-day is not the one as it was on August 14, 1947. A lot of changes has taken place in this land since then. I can cite a few cases where accountants of this country showed such high competencies in their field which were in full match with their counterparts in the western world. I abstain from citing those to avoid unpleasantness.
Finally, APM should be revised to make it contain well built and laid guidelines . Nothing will come to halt, if a time is given to re-shape it. Since MOC is the implementation agency of Twinning Project- ICAEW/ICAB, it should exert its authority for successful implementation of the project. Past project performance history of ICAB requires MOC to be watchful.
The writer is Partner, Ahmad & Akhtar, Chartered Accountants, BCIC Bhaban (3rd Floor), 30-31, Dilkhusha CA, Dhaka. He can be reached at e-mail: aaca@bangla.net
A news was published on October 28, 2009 in the Financial Express to say that the President of The Chartered Accountants of England And Wales (ICAEW) visited Bangladesh recently to sign an agreement with the Institute of Chartered Accountants of Bangladesh (ICAB) to work jointly in the development of chartered accountants' (CA) profession in Bangladesh. The agreement was termed as historic for ICAB. That ICAEW and ICAB jointly developed a manual called Audit Practice Manual (APM) for Bangladesh came as an item of the news. Earlier in April, 2009 in a message given by the Executive Director, Professional Standards, ICAEW in the above manual, publication of the manual was termed as a great milestone for ICAB.
A discussion on APM was felt necessary by me, because (1) out of 234 pages in it description of audit procedure covered 49 pages, rest of the pages contained 75 forms in which 2236 rows were created by copying from another text to record information by the auditors, (2) auditing is a function which experienced accountants/auditors can perform without reference to any manual (I served as Senior Auditor for over two years in the office of Auditor General, Govt. Of Libya and did audit of good governance practices in the Office Of Road And Highways Department under an Asian Development Bank (ADB) financed project without working as auditor in my service life), (3) APM's preparation needed more than six months, (4) a project undertaken by ICAB in the year 2002 with financial assistance from the World Bank (WB) for development of accounting and auditing standards in Bangladesh ended largely in failure due to the apathy shown by ICAB authorities and (5) ICAB is not the implementing agency of the current project, but is its beneficiary which has made the main role player, i.e. ICAEW partially unaccountable to ICAB.
I attempted a number of times to make ICAB authorities hold a discussion on APM among its members. A pool of knowledge and experience was needed to make the manual useful. But my request was rejected on one ground and another by ICAB authorities. On August 5, 2009 President ICAB informed me that he would cause review of my observations by Project Development And Implementation Committee of ICAB. The review was not done.
Having in the practice as an auditor for a little over one year, I felt it necessary to study APM to know the subject better. Purpose of the manual is to enhance auditing capacity and quality of Chartered Accountants (CA). My study of the manual has proved that it is far from being a good guidance for practising CAs.
For the first time I commented on the manual was on June 20, 2009 in a seminar held in ICAB. The seminar was under Continuous Professional Development Programme on a subject other than auditing. The seminar provided me an opportunity of letting a large number of members of ICAB present in it about the quality of the manual. Chairman of the seminar did not allow me to present my views. However, I was asked by the President, ICAB to give my views in writing to the institute. The President further said that since the manual was prepared by ICAEW, its representative would make response to my comments. But in the news published on October 20, 2009 in the Financial Express, it was reported that the President, ICAB mentioned the name of his institute as co-author of the manual. I requested the President to let me know what role and by whom the role was played in the preparation of the manual. The President preferred to remain silent. I became inquisitive, as I was in the implementation of large projects in my past work-fields in autonomous bodies.
I informed the Minister in charge of Ministry Of Commerce (MOC) about the poor quality of findings made by me in the manual. The Minister asked me to contact his office for further discussion. But, I informed him that my findings were yet to be known to the agency created in MOC for implementation of the project under which the manual was written. I requested for giving me sometime to inform the implementation agency of my findings in the manual. The Minister granted me the time. I talked with the Director of the Project who advised me to put my comments in writing and submit to him. I did that on July 6, 2009. I also submitted the comments to the President, ICAB
The shortcomings in the manual were specified by me in a report which was submitted on July 6, 2009 to the President, ICAB and the Director of the above project
ICAB submitted to me the replies to the comments I made on July 6, 2009. I studied those and found that a good number of the replies given by ICAB, in fact by ICAEW, was not acceptable from the ground of reality and a good judgement.
It was pointed by me in my reports that the manual contained some statements which were not befitting to CA profession, some statements were filled with emotion rather than rationality. In one case, where the reply of ICAB/ICAEW was found erratic, instead of admitting the mistake, ICAB/ ICAEW cited another case in defense of its statement. That also was found erratic. The most serious shortcoming of the manual is that auditing practices were not laid in it in a logical and systematic manner. As a result, the manual did not show a road map through which an auditor will do his work to reach his destination. I have made eight recommendations to make the manual systematic and easy for implementation. Therefore, I suggested that the manual be re-written to serve its purpose. But ICAB authorities have done nothing to revise the manual. My comments can be seen in website- www.akamal.c150.com
Any assumption that, since the manual is the outcome of a joint project between ICAB and ICAEW no shortcoming or mistake can remain in it is wrong. This land of to-day is not the one as it was on August 14, 1947. A lot of changes has taken place in this land since then. I can cite a few cases where accountants of this country showed such high competencies in their field which were in full match with their counterparts in the western world. I abstain from citing those to avoid unpleasantness.
Finally, APM should be revised to make it contain well built and laid guidelines . Nothing will come to halt, if a time is given to re-shape it. Since MOC is the implementation agency of Twinning Project- ICAEW/ICAB, it should exert its authority for successful implementation of the project. Past project performance history of ICAB requires MOC to be watchful.
The writer is Partner, Ahmad & Akhtar, Chartered Accountants, BCIC Bhaban (3rd Floor), 30-31, Dilkhusha CA, Dhaka. He can be reached at e-mail: aaca@bangla.net