
ICAB disputes ICMAB’s claim
Capital flight and bad assets stem from policy failures, not poor auditing: ICAB
FE REPORT | Friday, 20 June 2025
The Institute of Chartered Accountants of Bangladesh (ICAB) Thursday refuted the allegation that auditors are to blame for the country's capital flight, calling it misleading and unfounded.
The professional body affirmed that the outflow of funds from the country and rise in non-performing assets in the country's banking system are primarily the result of flawed state policies-not auditing failures.
The Institute also urged all concerned to keep trust on chartered accountants for statutory audits, despite having demand for the reform in auditing institutions.
The observations were made in a press conference titled 'Safeguarding Audit for National Interest: Local and Global Perspective', which was held at the CA Building in the city.
In response to remarks made by the Institute of Cost and Management Accountants of Bangladesh (ICMAB) recently, President of ICAB Maria Howlader told the press conference that the ICAB is a lone institute with having global and domestic recognitions for auditing activities.
The ICMAB at a programme in the city on June 17 alleged that audit firms in the country also bear responsibility for the siphoning off over US $17 billion over the past 15 years under the previous government, due to poor auditing practices.
ICAB president Maria termed the allegations by the ICMAB "misleading" and strongly denounced the same.
Ms. Maria said CAs maintain required auditing quality and standards and contribute significantly to building a sustainable economy.
"At present, we (ICAB) have 613 chartered accountants and around 12,000 competent professionals working in 249 CA firms," she said.
Maria also raised a question about the ICMAB's claim that there are 0.3 million registered entities in the country.
"The figure is not accurate; the actual number is significantly less than that," she stated.
She pointed out that last year alone, 57,000 entities were instructed to be undergone audits.
Regarding the allegation of capital flight, she explained that such illicit outflows take place through multiple layers of transactions and many of those lie outside the scope of an audit.
"Auditors have no role in several stages of these money transfers, as not all processes are auditable. Therefore, blaming auditors for capital flight is unfounded," she said.
Maria Howlader said beyond having its regulatory functions, ICAB actively supports the government through various policy initiatives.
This includes submitting budget-related proposals to the National Board of Revenue (NBR) and providing input on the formulation of rules and regulations for the Financial Reporting Council (FRC), she said.
The Institute's firm commitment to excellence has resulted in ICAB's curriculum and examination system being recognized as equivalent to that of the prestigious Institute of Chartered Accountants in England and Wales (ICAEW), she pointed out.
The parity has been further acknowledged by leading professional bodies such as Chartered Accountants Australia and New Zealand (CA ANZ), which has also recognized ICAB's curriculum and examination methods.
Past presidents of ICAB Md Humayun Kabir, Md Moniruzzaman, and Md. Shahadat Hossain, ICAB chief executive director Shubhashish Bose also spoke, among others.
Responding to a query, the ICAB council member and partner of Rahman Rahman Huq CA Firm Muhammad Mehedi Hasan said CAs are not involved in money laundering and defaulted loans in the banking system were not find in the audit reports in past due to policy set for audit by the regulatory entities of the state.
When a government sets a policy for not asking questions about non-performing loan (NPL) of banks and some other financial institutions and the court also issues order in this connection, then it is not possible for the CAs to work properly, he acknowledged.
As a self-reliant regulatory body, ICAB is continuously working to improve the quality of the auditing profession, the press conference was told, adding that a key initiative in this regard is the Document Verification System (DVS), said ICAB members.
Other regulatory bodies and financial institutions have adopted DVS, including the Financial Reporting Council (FRC), Registrar of Joint Stock Companies and Firms (RJSC), Bangladesh Securities and Exchange Commission (BSEC), Bangladesh Investment Development Authority (BIDA), NGO Affairs Bureau, Microcredit Regulatory Authority (MRA), and various commercial banks, said ICAB.
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