23pc bankers have enough knowledge of forensic audit

Experts at a roundtable on Wednesday called for institutionalising forensic audit as only 23 per cent of officials in the internal audit and credit recovery department of commercial banks claimed to have enough knowledge of the concept in a study.

The study titled "Institutionalising forensic audit in banks in Bangladesh" also found that 48 per cent of the respondents had knowledge about forensic audit to some extent.

The findings of the study were unveiled at the discussion organised by the Bangladesh Institute of Bank Management (BIBM) at the BIBM auditorium in the capital.

BIBM carried out the study.

A total of 23 per cent of the respondents merely heard about the concept, and 6 per cent knew nothing about it.

Besides, 45 per cent of the respondents said their banks had never conducted a forensic audit, while 39 per cent confirmed such audits had taken place.

Dr Md Shahid Ullah, an associate professor at BIBM, delivered the keynote at the event presided over by SM Abdul Hakim, director general of the institute.

Nurun Nahar, chairman of the BIBM Executive Committee and deputy governor of the Bangladesh Bank, delivered her speech virtually as the chief guest.

SMM Akther Hamid Bhuiyan, director of the Anti-Corruption Commission (ACC); Rokonuzzaman, acting president of the Institute of Chartered Accountants of Bangladesh (ICAB); Md Humayun Kabir, managing director of Union Bank; Md Touhidul Alam Khan, managing director of NRBC Bank; and Mohammad Zahir Hussain, director at the Bangladesh Bank; spoke at the event, among others.

Speakers urged banks to adopt and institutionalise forensic audits, emphasising their roles in detecting frauds, ensuring accountability, and strengthening governance.

They called for independent and specialised audit teams, enhanced training, and the use of technology to identify irregularities.

Bangladesh Bank Deputy Governor Nahar highlighted that persistent irregularities threatened banking stability and public trust, despite achievements like sustainable finance and economic development.

She underlined that uncovering concealed irregularities through forensic audits and reinforcing governance frameworks were essential for safeguarding financial institutions and the national economy.

Dr Md Shahid Ullah said the detection of frauds by bank employees was the most frequently cited reason for conducting audits, followed by loan frauds and frauds by borrowers. Most forensic audits were initiated by the respondents' own banks or the Bangladesh Bank, while the ACC was involved to a small extent.

The study revealed strong support for independent forensic audit teams, with 39 per cent of respondents strongly agreeing on their necessity and 52 per cent agreeing.

ACC's Hamid said forensic audit was a relatively new concept in Bangladesh, distinct from routine audits.

He said the independence of auditors was essential, and political support was crucial for transparency.

ICAB's Rokonuzzaman compared forensic audits to consulting a specialist doctor for serious ailments.

"Even with multiple control mechanisms, failures occur. Investigations and public disclosure are keys to holding institutions accountable," he said.

Union Bank's Humayun emphasised that identifying irregularities was not enough.

"Courage, ethical motivation, and political will are necessary to eliminate malpractice. Audit findings must lead to corrective action," he said.

NRBC Bank's Touhidul stressed cultivating a proper ethics culture to build public trust and called for university-level forensic audit learning, enhanced digital vigilance against frauds, and whistleblower systems, while ensuring innocent employees were not penalised.

Bangladesh Bank's Zahir pointed out weaknesses in internal audits and oversight.

"Cases like Hallmark and Basic Bank show that even high-value irregularities can escape detection. Coordination among the Bangladesh Bank, the Bangladesh Financial Intelligence Unit (BFIU), ACC, and other agencies is vital," he said.

"Audit findings must lead to legal action, not just internal reporting," he added.

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