Standardised accounting and auditing

There always remains a grey area in accounting and auditing, particularly in countries like Bangladesh where the corporate world and manufacturing sector had to start literally from scratch with financial and other regulations being conspicuous only by their absence in the initial stages. The overwhelming emphasis was, and still is, on creation of wealth. Unfortunately, businesses have surpassed the more arduous and challenging areas of industry. And no business can take off, let alone prosper, without maintenance of proper accounts. That business firms or companies go by the rules and maintain fair accounts has to be verified by recognised professionals who usually establish their own auditing firms to do the job better and efficiently. This is however no guarantee that they do not become a party to made-up auditing report and even aid in suborning indirectly. At a session of the 'Regional Standard-Setters Conference' of chartered accountants arranged by the South Asian Federation of Accountants (SAFA), the Institute of Chartered Accountants of Bangladesh (ICAB) and the International Accounting Standard Board (IASB), the Bangladesh Bank governor voiced on Monday the need for raising the standard of accounting and auditing here to the international level. Faulty or fictitious accounts are at the root of corporate malfeasance as well as financial crimes in other areas of economy. So, the BB governor has rightly pointed out the areas where things can go terribly wrong, so far as a country's economy is concerned. Such practices can encourage corruption within a country or between public or private organisations or companies of different countries. An updated Bribe Payers Index published by the Berlin-based Transparency International ranks 28 countries that account for 80 per cent of the global trade and investment, based on questions to 3,000 businessmen, by the perceived likelihood of their companies paying bribes. Unsurprisingly, construction and industries involving government contracts, were the most unclean of the bunch. This certainly calls for international standardization of auditing and accounting. Siphoning of enormous amount of money can never be stopped without doing this. Notwithstanding some big shifts in national legislation and international anti-bribery activity, the international bribery regime has not improved desirably and countries like Bangladesh are more vulnerable to this blight. However compared to five years ago, countries best known as sources and recipients of corrupt payments have come a long way in putting their acts together. The political climate here is yet to be conducive enough to catch up with the international standard of anti-bribery campaign. But at least this country can plug the hole by improving the system of accounts maintenance and its supervision through a better brand of auditing comparable the best in the world. This should, of necessity, include the reforms covering the insurance industry over the use of market-based bond valuations as envisaged in the Eurozone countries now in financial turmoil. The focus ought to be on plugging the source of financial malpractices by forcing companies and businesses to maintain fair accounts.