Auditors alone cannot ensure quality of financials

The Institute of Chartered Accountants of Bangladesh (ICAB) awards membership to the qualified Chartered Accountants of high competence through rigorous useful education and trainings who will be able to meet the challenges of the society. Besides, ICAB provides up-to-date guidelines as an ongoing basis to practicing CA firms in Bangladesh to maintain quality audit reports at par with Global Standards.
Recently ICAB and the International Financial Reporting Standards (IFRS) Foundation have signed an agreement which empowers only ICAB in Bangladesh for supplying of data for development of accounting and auditing standards in Bangladesh.  Under this agreement, ICAB has got the copyright license to publish both in print and online electronic editions of BFRS, BAS and BFRS for SMEs using IFRS, IAS and IFRS for SMEs as issued by the International Accounting Standards Boards (IASB).
ICAB President Mr. Showkat Hossain FCA exchanged views in an exclusive interview with the Financial Express recently about the role of the Institute in controlling accountancy profession in the country.  
64 years old Mr. Hossain in his long professional career has been playing vital role in establishing good governance in corporate sector in the country. Presently he represents ICAB in the Board of CWASA and an Independent Director in the Board of Chittagong Stock Exchange nominated by the Government. He is Member of various organisations like Finance Sub-Committee of Chittagong Club Ltd, the Advisory Committee in respect of Finance & Accounts, and the Banking & Taxation of Chittagong Chamber of Commerce & Industries Limited.
The Financial Express (FE): What is the role of ICAB to ensure financial reporting standards in public and private sectors in the country?
Showkat Hossain (SH): Basically, appropriate application of reporting standards in corporate sector is depended on technical expertise and integrity through professionalism; chartered accountancy education and profession covers this area a lot.
ICAB is very strong compliant of Statement of Membership Obligations (SMOs) of International Federation of Accountants (IFAC) which covers the quality assurance of audit and assurance and professional education in line with International Education Standards, International Standards on Auditing, International Public Sector Accounting Standards, Investigation procedures, International Financial Reporting Standards, Code of Ethic and Disciplinary measures.
Besides, as part of corporate responsibility, ICAB introduced National Award for Best Presented Annual Reports to encourage sustainable financial reporting, corporate governance and quality audit practices in listed and non-listed companies in the country.
FE: Are the chartered accountants capable to guide properly to bring discipline in the financial management of organisations?
SH: ICAB members are holding high positions in financial sectors (both public & private) in various capacities at home and abroad. They are working in the aspects of accounting and auditing like budgetary control, internal audit, statutory audit, management audit and financial management etc.  
Our chartered accountants are much capable to guide properly to bring discipline in the financial sector. Bangladeshi enterprises achieved the highest number of awards for best presented annual reports for the years 2011 and 2012 among the SAARC countries which reckoned the contribution of chartered accountants. This is a remarkable achievement of our corporate sector as well.
FE: Would you say the basis on which the accounting and auditing standards are set time to time and also tell us something about the Accounting International Standards?
SH: The international Accounting Standards (IAS) are formulated, reviewed, finalised and issued under the guidance and supervision of the International Accounting Standards Committee (IASC), of which ICAB is a member. On the other hand, the International Standards on Auditing are formulated, reviewed, finalised and issued under the guidance and supervision of the International Auditing Practices Committee (IAPC) of IFAC. The IAS/IFRS and ISA are regularly reviewed by the IASC and the IFAC and updated from time to time as deemed fit.  
The Institute has been following IAS/IFRS and ISA/IAPS as Bangladesh Accounting Standards (BAS)/Bangladesh Financial Reporting Standards (BFRS) and Bangladesh Standards on Auditing (BSA /Bangladesh Auditing Practices Standards (BAPS) respectively. These standards are duly adopted by ICAB.
As an ongoing basis, ICAB expert team lead by the technical and research committee of the Council of the Institute review and adopt the IFRS/IAS and publish the BFRS/BAS and BSA in Bangladesh maintaining the due process in this regard.
FE: Would you say a few words about the activities of chartered accountant firms and their audit reports?
SH: The practicing chartered accountants carry out the audits of financial statements of various enterprises as public accountants under CA Firms. Apart from specialisation in traditional accounting and auditing services, CA Firms are also engaged in taxation services, information technology, statutory and liquidation services, management consultancy services like valuation of business and shares, designing of accounting, internal control and operational systems for organisations.
We believe the standard of the audit reports prepared by CA Firms is good as they always maintain the international standards. We have formulated audit standards in line with the best international practices and it is mandatory for the audit firms to maintain. There could be some incidents where an individual audit firm fails to maintain the standard fully but that does not necessarily mean the entire industry lacks the standard.
On the other hand, the quality or standard of an audited financial statement does not only depend on the auditors. There are other issues like efficiency of the business entity and the government policies about different financial issues.
FE: What measures are taken against audit firms for professional misconduct?
SH: The ICAB has a disciplinary committee which takes action against the audit firms if any complaint is found. We suspend or even cancel the licence of the audit firms and also fine for professional misconducts. But we have faced problems when we did so in the past. The suspended firms often get stay order from the court and carry out their operation. As we all abide by the law there is nothing much to do in this ground.
The disciplinary actions taken by ICAB before were not publicised as it done now-a-days. In 2014, the disciplinary actions taken by the Institute have been publicised in the ICAB website and ICAB News Bulletin.
The disciplinary actions taken by ICAB since 2001 have been presented below:

FE: What is ICAB's stand regarding launching of Financial Reporting Council?
SH: We must say that ICAB is always in favour of any rational measures that ensure the transparency and accountability. ICAB shall be the first to accept any sensible move that can contribute to progress our nation. But at the same time when we are talking about the proposed Financial Reporting Act (FRA) and the proposed Financial Reporting Council (FRC), we can tell you that we should not support anything which is contradictory with the existing regulations/acts, unnecessary in the current context of our economy and even impracticable to implement in our country.
However, the Institute placed five points proposal to the government for its consideration while finalising the FRA draft. If the government incorporates these in FRA, it will help remove contradictory sections of the act.
ICAB still thinks that strengthening its existing Investigation and Disciplinary Committee (IDC) as like as the proposed FRC in terms of composition, power and function is a better alternative to the formation of FRC as a separate body. By strengthening the IDC, it is veritably possible to achieve very purpose of the proposed FRC.
FE: Would you discuss interaction of ICAB with International Accounting bodies like ICAEW, IFAC, IASC, SAFA, CAPA and other regulatory bodies in the country?
SH: ICAB is an active member of IFAC, IASC and CAPA and SAFA. It regularly participates in Conferences /Seminars/Workshops organised under the auspices of these International and regional bodies. ICAB reciprocates by hosting such events in Bangladesh from time to time, which are attended on invitation by representatives of IFAC, and various Member-Bodies of SAFA, etc.
ICAB's certification is accepted by leading international accounting bodies, the Institute of Chartered Accountants of England and Wales (ICAEW),     UK &. ICAB has signed MOU and MRA with CPA Ireland. ICAB has strong ties with World Bank. In the country, it has MoU with the Office of the Comptroller and Auditor General (OCAG). ICAB provides training to official of Central Bank of Bangladesh, National Board of Revenue, Microcredit regulatory authority and Non-Government Organisations.
FE: In the end, would you please give your valuable message for present and future chartered accountants of Bangladesh?
SH: In the twenty first century chartered accountancy (CA) has emerged as a unique profession with paramount importance. In today's free globalised world, chartered accountants are playing wide variety of roles in financial management and policy making worldwide. They are the professionals who are well trained and equipped with the expertise to perform the various types of work such as accounting, taxation, auditing, financial management, project appraisal, consultancy etc.  
Chartered accountancy is the most lucrative and remunerative profession, not only in Bangladesh but, all over the world. So, CA profession is right choice for them who are bright students.  Last but not the least, I must say that CAs have the ample opportunities but those can never come without responsibilities.