Speakers at a conference on Saturday said the reporting and compliance of corporate Governance should be meaningful and effective collaboration among relevant stakeholders is necessary for improving the quality of financial reporting and audit in the country.
The members’ conference on ‘Bringing Improvement in the Financial Reporting and Quality of Auditing’ was organized by the Institute of Chartered Accountants of Bangladesh (ICAB) on Saturday through Zoom Video Conference.
CQK Mustaq Ahmed, Chairman, Financial Reporting Council (FRC) was present as the Chief Guest and Prof. Dr. Shaikh Shamsuddin Ahmed, Commissioner, Bangladesh Securities and Exchange Commission (BSEC) was present as the special guest.
Muhammed Farhad Hussain FCA, Past President of ICAB acted as the session chairman while ICAB President Muhammad Farooq FCA delivered address of welcome. Mahbub Ahmed Siddique FCA, Director Technical-ICAB presented the keynote paper.
The purpose of this conference is to exchange of views on the challenges and way forward to improve the financial reporting and quality of auditing.
ICAB President Muhammad Fraooq FCA said, high quality financial reporting supports well-informed investment decisions, thereby facilitating the efficient formation and deployment of capital. So, independent and consistently high quality audits is an essential tool for trustworthy financial reporting, which brings stakeholders’ confidence when pursuing market opportunities, he further said .
He said, as part of our mandatory inspection program, ICAB evaluates quality control system of each firm maintaining IFAC requirements. ICAB takes necessary actions, if it identifies quality control deficiencies. Even, proactively take actions against the firm for any professional misconduct, he informed.
About the role of the auditors, Mr. Farooq said, auditors cannot compromise audit quality for audit fee. They should perform high quality audits regardless of the level of audit fee.
Considering the high level of cost to engage audit personnel with sufficient skill, expertise, and the use of information technology like Computer Assisted Audit Techniques (CAAT), the existing audit fees are not sufficient, he said adding that Regulators involvement in selection of audit firm and fixing of audit fee may be an option to think about.
In this connection, the Financial Reporting Council and Bangladesh Securities and Exchange Commission jointly could work in formation of a joint committee or task force to develop a strategic plan to improve the quality of financial reporting and auditing, he suggested.
Describing the responsibilities of management and the auditors for quality audit, the paper presenter Mahbub Ahmed Siddique pointed out some issues and challenges for improving the quality of audit like corporate governance, family dominated business , conflict of interest, fraud , corruption, minority shareholders, lack of technical skill, low audit fee, lack of collaboration among regulators and stakeholders, etc.
Independence of preparers, auditors and regulators could improve the quality of audit; thereby Regulators should protect CFOs from any threat including job security. Regulators should ensure the fees of the audit considering the volume business and nature of company, he opined.
Reporting and Compliance of Corporate Governance – should be meaningful and effective Collaborative among relevant stakeholders are the issues to improve the quality of financial reporting and audit in the country, he said.