The cabinet on Monday approved the draft Financial Reporting Bill 2014, more than one year after approving it in principle, to set a standard for financial reporting by the companies. The finance division placed the draft bill in a weekly cabinet meeting on the day presided over by prime minister Sheikh Hasina at the secretariat, The cabinet in August last year approved the bill in principle which proposed to constitute a council, namely Financial Reporting Council, to be
headed by Bangladesh Bank governor to enforce the law.
The bill also proposed provisions for five-year imprisonment and Tk one lakh in fine for the auditors for violation of the law.
Representatives from the Institute of Chartered Accountants of Bangladesh, Institute of Cost and Management Accountants of Bangladesh, National Board of Revenue and Bangladesh Securities and Exchange Commission and two independent experts will be included in the proposed council.
Officials in BSEC and finance ministry said that the delay was mainly due to intense lobbying by the auditors.
They said the government move to bring uniformed audit standard and better regulation in the sector came following the 2010-11 stock market debacle.
‘One of the major reasons of the stock market debacle was that companies inflated the financial statements with the help of auditors to misguide the regulator and the general investors,’ a senior BSEC official told New Age on Monday.
He said that the BSEC in several cases found that the listed companies falsely evaluated their asset and the auditors helped them doing so.
The chartered accountants of the country opposed the government move to formulate FRA and FRC.
The chartered accountant leaders, on different occasions, said that such law would destroy the independence of the auditors and discourage quality professionals to work in this field.
‘This will set a standard of financial reporting and will help to improve the quality of such reports,’ cabinet secretary Mohammad Musharraf Hossain Bhuiyan told reporters in a briefing at the secretariat on the day.
‘This will help to remove chaos and irregularities in the capital market,’ he added.
-With New Age input
