Financial Reporting Act bill likely to be passed in next JS session

The bill on the proposed Financial Reporting Act (FRA) is likely to be passed by the Jatiya Sangsad (JS) in its upcoming budget session for setting up the Financial Reporting Council (FRC), officials said.     

The officials of the Bangladesh Securities and Exchange Commission (BSEC) said the FRA is under the active consideration of the Ministry of Finance to curb the window-dressed balance sheets.

 "So far as we know, the FRA bill will be placed in the parliament during upcoming budget session," said a BSEC policy-maker.

BSEC Executive Director Mohammad Saifur Rahman said formation of the FRC is also a condition, among others, for disbursing funding of the capital market development project by the Asian Development Bank (ADB).

 "The FRA will have to come into effect for the sake of disbursing the remaining fund of $150 million from the ADB," Rahman said.

The move to introduce the FRC started in 2008 following suggestions of market experts, stakeholders and the securities regulator as the auditors responsible for window-dressed balance sheets cannot be brought under the scanner in the absence of an effective regulatory body.

The BSEC officials said the securities regulator cannot take measures against the rouge auditors who play a role behind the window-dressed balance sheets.

 "Several times, the BSEC sent its recommendations to the Institute of Chartered Accountants of Bangladesh (ICAB) to take punitive measures against the rouge auditors. But in this regard, we observed very little development," said a BSEC official.

The MoF earlier received opinions from the stakeholders and held a number of meetings to finalise the draft of the FRA.

A comment on the latest development on the FRA was not available from the MoF.