The Securities and Exchange Commission (SEC) long ago requested the commerce ministry to form a supervisory body in a bid to improve the accounting standard in the country but there is no specific action yet, SEC Chairman Mirza Azizul Islam told a seminar yesterday.

"We gave the proposal to the commerce ministry but it is something that I don't know whether the issue of forming the body is in the cold storage," he explained.

The SEC chairman was speaking as chief guest at a CPE seminar on 'Compliance of International Accounting Standards in Bangladesh' organised by the Institute of Chartered Accountants of Bangladesh (ICAB) in Dhaka.

Expressing his dissatisfaction about maintaining the international auditing standard (IAS) in the country, Islam said there are some deficiencies and the word adoption is also misleading in this regard. "We take the privilege by saying international standard has been adopted," he said noting ICAB should play much more active role in the oversight function.

"I got a conflicting picture from the discussion of the ICAB members," the SEC chairman went on suggesting chartered accountants belong to an independent profession and they must exercise it.

AKM Rafiqul Islam chaired the seminar while Jamaluddin Ahmed, partner of Hoda Vasi Chowdhury & Co, and Wares Karim, senior lecturer of School of Accounting and Commercial Law, Victoria University of Wellington in New Zealand, jointly presented the keynote paper. Sultan Ahmed, acting president of the ICAB, also spoke at the seminar.

The ICAB has no power to enforce its own standards for the compliance with accounting standards and as such the adopted accounting standards can be said to be recommendatory, the keynote paper mentioned.

Nonetheless, the ICAB instructed its members to disclose in the audit report any deviation from the accounting standards, it said adding it was expected that the ICAB members would put their best endeavour to secure compliance of the standards, which did not come out successful at all.

Lack of enforceable mechanisms for IAS is very significant weakness, it said suggesting the SEC should come up with the enforcement mechanism to ensure compliance with IAS or appropriate disclosure of non-compliance.

There are some problems in implementing the accounting standards. The companies are reluctant to disclose information and they are only concerned about the minimum disclosure, the keynote paper added.

These accounting standards are not mandatory and the members are not required to prepare the financial reports unless and until there are incorporated into the legislation, it explained.