Enactment of the proposed Financial Reporting Act (FRA) keeping Chartered Accountants (CAs) and Cost and Management Accountants (CMAs) wide apart may make its execution difficult, officials and experts have said.
They have come up with the view against the backdrop of a recent tug-of-war between the two groups of professionals over inclusion of CMAs alongside CAs as 'professional accountants' in the FRA.
Financial Reporting Council (FRC), a separate regulatory body, is expected to be formed under this act to properly regulate the country's financial reporting activities.
In line with recommendations made by the parliamentary standing committee on the finance ministry, a bill on the FRA was also placed before the Jatiya Sangsad for passage, just intensifying the battle between the two sides.
"Implementation of the FRA will be difficult without cooperation of relevant professionals, as its functioning will be very technical," an accountant told the FE, seeking anonymity.
Another accountant belonging to one of the groups said, "We will fight for realising our logical demands."
"If the law is passed leaving the two sides bickering, they (accountants) may be prompted to go to court for legal redress," said a lawyer of the Supreme Court, preferring not to be named.
The apple of discord lies in the parliamentary committee's recommendation to define a 'professional accountant' as a member of the Institute of Chartered Accountants of Bangladesh (ICAB) or the Institute of Cost and Management Accountants of Bangladesh (ICMAB). It also recommends that the area of work for the professionals from the ICAB should be 'financial audit' and that for the professionals from the ICMAB should be the 'cost and management audit.'
Both groups have been placing ads and counter-ads in different dailies since the standing committee made the recommendations.
Strongly opposing the recommendations, Mahbub Ahmed Siddique, ICAB director (technical), told the FE: "We agree the CMAs are professional accountants. But inclusion of CMAs as professional accountants in this particular act-FRA-is irrelevant."
"… because, the law is being enacted to regulate the financial reporting activities that comprise two parts - external auditor and management. The CMAs are involved in none of them," he said.
He further elaborated: "Only a CA (or relevant responsible accountancy body in few other countries) can do the job of an external auditor. Secondly, a company can appoint its official from any discipline like Bangla or Accounting, not necessarily a CMA, as an accountant."
"In view of such irrelevance, inclusion of CMAs as professional accountants in this act is illogical and unexpected," he added.
On the other hand, hailing the recommendations, ICMAB president Abu Sayed Md. Shaykhul Islam said: "Keeping CMA in the definition of 'professional accountant' does not mean giving them any authority."
He further said: "The act as a law of the country should include what is deemed required in defining a professional accountant."
"All parties including the accountants, who prepare financial reports and annual reports, are recommended to be covered by the FRA. And there is a provision for punishment in the event of violation of relevant rules," he said.
He alleged that the ICAB was trying to keep CMAs away from the FRC and all professional development programmes and thus establish its own control over the FRC in an ill-motive. "This is against the main purpose of the act," he commented.
Though the CMAs' functions would not come under the regulation of the FRC, their inclusion here was required, especially to allow these accountants to get relevant training, get involved in development programmes and other assistance to be arranged or given by the FRC, he observed.
A senior official at the ICAB claimed that despite the lack of required qualifications, CMAs were always trying to exploit legal loopholes to do their part in auditing of financial statements.
In reply to a query, the official said in no FRA-like law in any other country a definition like 'professional accountant' was given and CMAs included.
"There is no need for definition of professional accountant in the FRA. Definition of an auditor is enough here," he added.
Responding to the same question, the ICMAB leader said, "CMAs are covered by the relevant laws of all such countries."
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