FE REPORT | June 17, 2020
The state-run Financial Reporting Council or FRC has signed deals with three global accounting and auditing standards-setting organisations.
With the agreement, a well-regulated structure will be introduced to Bangladeshi corporate and business organisations for ensuring high quality financial reporting and auditing with integrity, transparency and trustworthiness.
The three global organisations are the IFRS Foundation, International Federation of Accountants or IFAC and International Valuation Standards Council or IVSC, the government watchdog for professional accountants and accountancy profession said in a statement.
FRC chairman CQK Mustaq Ahmed has recently signed the contracts with designated representatives of the organisations.
According to the statement, the international organisations follow a thorough, transparent and participatory due process when issue any standard, practice note or an interpretation that help companies better implement the standards.
Currently, 166 countries are involved in the process of IFRS adoption; 170 members from 130 countries are using IFAC published auditing standards and IVSC involves more than 130 member organisations across the world.
The London-based IFRS Foundation develops and sets standards for accounting and financial reporting, known as IFRS, IASs, and IFRIC interpretations.
The IFAC, headquartered in New York develops and sets standards, code of ethics, practice notes for auditing, assurance, review, and other related services for professional accountants working in the profession and in businesses most widely used and known as International Standards on Auditing (ISAs).
The IVSC, based in London, develops and sets International Valuation Standards (IVS) for business and assets valuation services.
IFRS, ISAs, Code of Ethics have been in practice in Bangladesh accounting and auditing profession through the Institute of Chartered Accountants of Bangladesh or ICAB for more than a decade, the statement said.
With the enactment of Financial Reporting Act or FRA 2015 and signing the contracts with the global standard setting organisations, these standards are now being included into the national law
Included in the FRA 2015, amendments to the Companies Act 1994, Banking Companies Act 1991, MRA Act 2006, and Insurance Act 2010, require the relevant companies for compliance with IFRS, ISAs, the statement said.
Monitoring and reviewing of the compliance of high-quality standards by legislative law will strengthen the accounting and auditing profession of Bangladesh.
IVS for valuation of business and assets will be a new set of standards for valuation practices in Bangladesh.
The enactment of FRA and establishment of FRC in Bangladesh is “a turning point” of transition from self- regulation to government regulation and is also first of its kind in the SAARC region, the council said.
The purpose of the contract is to bring financial reporting and audit reporting activities of different corporate and business organisations, companies, also known as public interest entities or PIEs under a well-regulated structure in order to ensure high quality financial reporting and auditing with integrity, transparency and trustworthiness.
This is a step forward to protect public interest, and address concerns of capital market stakeholders, the council noted.
