The Institute of Chartered Accountants of Bangladesh (ICAB) has made a move to reshuffle and revitalize its vigilant system on the chartered accountant firms to make them more compliant and bring in high-quality financial reports.
The national accounting and auditing regulator, ICAB, is also focusing on all-out automation in the entire value chain of reporting, auditing, research and development as well to transform the firms' efficiently and competitively in the global context.
The accounting regulator has been relentlessly, in this regard, collaborating with other regulators and the government to make the chain of reporting systems proficient.
The ICAB created and launched a reporting database named document verification system (DVS) last year which helped NBR bring an additional estimated 57,000 companies under the tax net within just three months.
ICAB President Mahmudul Hasan Khusru disclosed these in an interview with the the FE recently.
Mr. Khusru- Director and Chief Executive Officer (CEO) of Expo Group and DataFort Limited -took over the charge of ICAB president on 1 January 2021.
"We are reshuffling and rejuvenating the Quality Assurance Board (QAB) here in ICAB to ensure the best quality financial reports," he said.
"We are bringing in a lot of qualified CAs in the committee, fortifying the Board with more manpower and automation as well," he said.
He said that 2021 is the year of automation in auditing systems, so many software systems are coming.
ICAB is supporting CA firms so that they use internationally accredited audit software," he said.
Mr Khusru said once the CA firms start using internationally acknowledged software, the standard of auditing and reporting will be as good as internationally reputed firms and this will help them performing quality audit with the lowest possible resources and at the shortest possible time.
"We are strengthening vigilance system here in the ICAB, increasing manpower in human resources, plugging in automation."
He said, apart from that, ICAB has an Investigation and disciplinary committee that takes care of complaints against errand CA firms for ensuring transparency and accountability.
According to the institute, ICAB has received about 10 complaints against CA firms in the last three years raised by different regulatory bodies, which were almost resolved except two cases that are now being under process.
Alongside, internally ICAB's Quality Assurance Department (QAD) raised 31 disciplinary issues against CA firms in the same period and the council resolved 22 issues and imposed punishments; warning, reprimand, penalty, membership suspension, withhold certificates of practice(CoP), etc.
After a long hearing by the council of the Institute, the disciplinary actions were taken depending on the gravity of misconduct committed by the CA firms, ICAB official source said.
ICAB President said they opened a new wing for research and development to conduct research in new areas of business and economy and develop their accounting standards accordingly.
ICAB in association with the NBR, unveiled the Document Verification System (DVS), an online document verification system to stop fake financial reporting in November last.
DVS generates a unique Document Verification Code (DVC) and every audit report contains the DVC.
During generating the DVC some mandatory financial figures of the company must be entered like turnover, net worth, profit or loss, etc.
This DVC can be used by the government agencies, different stakeholders and regulators like NBR, Bangladesh Bank, FRC, BSEC, RJSC, IDRA, BIDA, etc. covered under MOU or any framework with the institute.
ICAB President said this system can successfully stop fake reports and multi reports that have long been happening in the industry by some unscrupulous businesses.
He said they are going to make an agreement with RJSC too so that registered companies under RJSC could bring under the DVS.
"It is our major concern that the number of companies audited by our member firms is far below the number of companies registered with RJSC, and financial documents/certificates endorsed by third person misrepresenting themselves as CAs are misleading the regulating authorities and stakeholders," he said.
Members of the ICAB signed some 17,000 audit reports in the fiscal year 2019-20 though the number of tax returns was more than 35,000 in the year, according to an ICAB official source.
Mr Khusru said ICAB can't bring all changes in the reporting system.
"We are one of the regulators, but not the only one," he said adding that if other regulators fail to function properly it will affect the financial reporting quality as a whole.
There are a lot of "communication gaps" about delisting of some CA firms by the central bank.
December last year, Bangladesh Bank dumped 36 audit firms from its auditor list on the allegation of misconduct.
Talking about the issue, the ICAB president said allegations were raised against some firms but that doesn't mean they are guilty.
"We communicated with the central bank and finance ministry that we have some reservations about such decisions, "he said.
He also said that they proposed a committee for coordination among FRC, BB and ICAB.
Mr Khusru said Bangladesh has taken the most time-befitting decisions in combating pandemic.
The country could have been hurt more than pandemic if lockdown had not been lifted in time," he said.
He said the government has taken the right decision to introduce stimulus packages for different businesses at the right time.
He said small and medium practices and small and medium enterprises have been hurt not only in Bangladesh, but in the entire world.
ICAB President said accountants and their member firms have worked hard during Covid-19 to perform the auditing.