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The scope of submitting fake financial statements has been reduced as the country's premier bourse gets access to statements submitted by listed companies to other authorities.
There is a common practice of preparing separate financial statements by companies for separate authorities, for example one to avoid tax where earnings are understated, while another to take loans where all the assets and earnings are overstated.
A completely different one might be submitted to the Dhaka Stock Exchange (DSE) to influence the share price.
The DSE and the Institute of Chartered Accountants of Bangladesh (ICAB) on Tuesday signed a memorandum of understanding (MoU) to stop the practice.
Khairul Bashar Abu Taher Mohammed, chief regulatory officer (CRO) of the DSE and ICAB CEO Shubhashish Bose signed the MoU on behalf of their organisations.
DSE Managing Director ATM Tariquzzaman and ICAB President Md Moniruzzaman spoke at the event.
Mr Tariquzzaman said, "The MoU will bring more transparency and increase the accuracy of financial documents".
Md Moniruzzaman said, "The DSE and ICAB will work together to improve the corporate governance in the country".
The ICAB is the national professional accountancy body in Bangladesh. Now the DSE will be able to access the Document Verification System (DVS).
The DVS software allows corporate regulators to access its server using unique document verification code.
The Bangladesh Securities and Exchange Commission (BSEC) already has access to DVS.
Financial Reporting Council (FRC), which takes disciplinary actions against members of the auditing profession for professional misconducts, also has access to this software.
The National Board of Revenue (NBR), the tax collecting authority, and the Registrar of Joint Stock Companies (RJSC), which facilitates formation of companies, and keeps track of all ownership-related issues, as prescribed by the laws in Bangladesh, also have access to DVS.
ICAB has developed the DVS. It has made it mandatory for all practising chartered accountants to register with the DVS portal.
Document Verification System (DVS) became functional in January 2020.
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