A central bank deputy governor Saturday heavily criticised the country’s audit firms for not performing their due responsibility while auditing banks.
“I haven’t seen one single instance where an audit firm reports to the central bank informing irregularities in banks,” Kazi Sayedur Rahman, Deputy Governor of Bangladesh Bank, said while speaking at a virtual meeting.
The Institute of Chartered Accountants of Bangladesh (ICAB) organised the virtual meeting titled “Implementation status of IFRS in Banking Sector in Bangladesh.”
Speaking as chief guest, Kazi Sayedur Rahman said audit firms were bestowed with a very important responsibility to audit banks and financial institutions as external auditors.
“If they do not help ensure transparency, accountability in banks, the central bank alone cannot ensure it,” Mr Rahman said. The deputy governor said the central bank had unearthed all irregularities and scams in the banks and financial institutions, but audit firms should have done it before the central bank did.
He said Bangladesh Bank found many allegations against chartered accountant farms. “We found allegations against many CA firms, we couldn’t appoint them to audit banks,” he said.
He warned that it would not happen that the banks and CA firms would have a ‘win-win situation’.
“We will not compromise on implementing International Financial Reporting Standards in banks’ reporting system,” he said.
He said the central bank would work with ICAB, FRC, banks and other stakeholders to remove the gap between IFRS and local reporting standards.
Managing Director and CEO of Mutual Trust Bank Limited Syed Mahbubur Rahman said IFRS was definitely important for the country and would benefit the country. He said regulators were pushing banks to follow IFRS but one thing should be understood that the sector was fragmented.
He said the central bank should think about it.
Managing Director and CEO of Agrani Bank Ltd. Mohammad Shams-Ul Islam said the country needed to be compliant with all international rules and regulations.
“But there are sayings that the more you are compliant, the less you make a profit,” he said. He said regulators should spare enough time for the practising institutions to get prepared for international standards.
He also urged the regulators to keep in view the country’s uniqueness while implementing any international standards.
ICAB President Mahmudul Hasan Khusru said ICAB was always working to ensure the best practice in financial reporting and auditing arena since its establishment.
He said Bangladesh Securities and Exchange Commission, Bangladesh Bank, FRC and other regulatory bodies made IFRS compliance compulsory for listed entities, banking companies and other financial institutions.
“In some cases, situations arise where IFRS requirements contradict applicable provisions in national laws and regulations, ICAB has taken the initiatives to identify the deviations from IFRS with local regulations in the banking sector of Bangladesh,” he said.
Md. Abdul Kader Joaddar FCA, Vice President (Education & Examinations) of ICAB and Managing Director and Chief Financial Officer of Standard Chartered Bank, Bangladesh presented a keynote paper at the virtual meeting.
He said a cross regulator team may be formed as taskforce to identify gaps, understand implications of change from a regulatory perspective, the preparedness of the banking industry to implement some of the changes requiring advanced modelling, historical data, etc.
He said taskforce should develop an implementation plan of IFRS. Mohammad Al Maruf Khan FCA, Partner, Howladar Yunus and Co., Chartered Accountants, moderated the discussion.
M Anwarul Karim, Executive Director, (Standard Setting Division) Financial Reporting Council of Bangladesh; Mohammad Mohiuddin Ahmed, Executive Director, (Financial Report Monitoring Division) Financial Reporting Council of Bangladesh; and Ashraf-Uz-Zaman Ali FCA, Director, Audit & Advisory Services, Rahman Rahman Huq, Chartered Accountants, among others, spoke at the programme.