ICAB opposes proposed Financial Reporting Act

August 31, 2013

The Institute of Chartered Accountants of Bangladesh on Friday opposed the proposed Financial Reporting Act stating that it would restrict the freedom of auditors and make obstacle in auditing profession.
The ICAB expressed their stand regarding the FRA at a news briefing held at the National Press Club presided over by its president Abdus Salam.Salam in the written speech expressed doubt about the function of the proposed Financial Reporting Council which would be formed under the FRA saying due to the lack of professional background and core competency in accounting of the FRC members, the council would destroy the independent status of the ICAB.
‘As a result, the FRC will bring disaster to the oversight function in controlling the accounting and auditing which would create hurdle and complexities of doing business,’ he said.
Indirectly admitting failure of the ICAB the association president said, ‘If the government brings amendment to the Chartered Accountants Order by restructuring the ICAB Council to strengthen it their will be no need of forming FRC.’
‘As per the proposed FRC Bangladesh Bank governor, Bangladesh Securities and Exchange Commission chairman, Insurance Development and Regulatory Authority chairman and National Board of Revenue chairman, who usually take services from the auditors, will be in the regulatory body for auditors,’ he said.
‘The BB governor, BSEC chairman, IDRA chairman and NBR chairman will be the permanent members of the FRC, but ICAB president and other members of the association will be temporary members — meaning that the latter’s logical opinion might be unacceptable,’ he said.
The ICAB also opposed the Section 59 of the proposed FRA which mentioned up to 5 years of imprisonment and not less than Tk 1 lakh fine for the violation of the Act.
If the Sections 59, 60 and 65 of the Act remain active these will restrain meritorious students from taking the auditing as profession, the ICAB said.
The association also said according to the Presidential Order-2, 1973, the ICAB is the regulator of the auditors and auditing firms, but after the enactment of the FRA the ICAB would be regulated by the FRC.
Replying to a question if the ICAB has any plan to go for legal battle if the Act comes into action, ICB former president SaifuL Islam said, ‘We will decide our plan of action after considering the situation.’
ICAB former president Humayun Kabir said that the ICAB as a regulator of the auditors and audit firms had taken several steps in the past like suspending licences of firms.
ICAB former presidents MA Bari, Farhad Hossain, AK Chowdhury and ASM Nayeem were present, among others.

-With New Age input

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