Listed companies from now on will mandatorily have to get their financial statements audited by any firm of chartered accountants from the panel formed by the securities regulator, officials said.
In this connection, Bangladesh Securities and Exchange Commission (BSEC) issued on Thursday an order by amending previous order issued on July 27, 2011.
"The issuer of listed securities shall get its financial statements audited by any firm of chartered accountants which is in the panel of the commission," said the order signed by BSEC chairman Prof M Khairul Hossain.
The regulator's latest order came in an effort to ensure quality financial statements of the listed companies by auditors having sufficient manpower and reputation.
According to BSEC order, the issuer shall not appoint any firm of chartered accountants as its statutory auditors for a consecutive period exceeding three years.
"The audit firm or any of its partners or auditors shall not also be eligible for performing auditing of financial statements of the issuer of listed securities for a consecutive period exceeding three years," the BSEC order added.
Meanwhile, the securities regulator has almost completed its Auditors' Panel which will be published soon.
The BSEC officials said before publishing the list of auditors the regulator wants to ensure legal binding for listed companies to get financial statements audited by the BSEC panel.
"That's why the BSEC has brought amendment to its previous order including a mandatory provision before publishing auditors' list," said a BSEC official.
The official said their Auditors' Panel may comprise 35 or 36 firms. Then it will be restructured after every one year.
The president of the Institute of Chartered Accountants of Bangladesh (ICAB)
Masih Malik Chowdhury welcomed the regulatory move stating that foreign investors' confidence will be enhanced at this.
"Foreign investors look at the audit certification while making investment in listed securities. I think the regulator is right in forming its auditors' panel," Mr Malik told the FE.
At the same time professional auditors should be appointed in the commission in an effort to enhance the capacity of the regulatory body.
The securities regulator sought applications from eligible audit firms to form the Auditors' Panel in early December, 2014.
Later, a total of 52 audit firms applied for enlistment in the securities regulator's auditors.
As per the criteria set for the BSEC auditors' panel, an auditor or a partner of an audit firm must be a qualified chartered accountant.
The firm must be a partnership one of chartered accountants consisting of not fewer than two partners in case of foreign affiliated audit firm or four partners in case of one having no foreign affiliation.
And at least two partners of the firm, whether it is foreign affiliated or not, shall have the practicing experience in auditing for a minimum period of seven years and the firm must have adequate qualified audit staff who will not be fewer than eight in number for each partner.
The auditors or partners or audit firms will be disqualified for enlistment in the BSEC panel if they are found guilty of any securities or exchange-related offence under any law by the court.
Those who have been declared ineligible for acting as auditor of any issuer company under the securities rules will also not be included in the BSEC panel.
Suspension or fines imposed by any competent authority or under any law will also be considered disqualification of the BSEC panel.
And no accountants or auditors or partners of the audit firm shall be associated in any way with the issuer companies during the audit period.
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