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Proposed financial reporting council kicks up debate

Star Business Report
A debate has surfaced over the proposed law on formation of a financial reporting council, as regulatory officials and accounting professionals view the move differently.
The law could help ensure quality audits besides enhancing the professionals' capability, say regulators such as the central bank, Securities and Exchange Commission and Dhaka Stock Exchange.
But the Institute of Chartered Accountants of Bangladesh (ICAB) thinks if the proposal is signed into a law it will undermine them.
The observations came at a roundtable, organised yesterday by Bangla-language newspaper Prothom Alo at its office in Dhaka. The discussants included representatives from the regulatory bodies, accounting practitioners, managing directors of commercial banks and top businesspeople.
“The proposed council will help improve accounting quality. We had given a go-ahead to an ordinance in this regard during our tenure,” said Dr AB Mirza Azizul Islam.
The former finance adviser hoped that the present government would go for enactment of the law on the council for the sake of transparency.
Such financial reporting councils (FRO) are very much in existence in different countries — especially in the rich world — which independently regulate and oversee corporate reporting and governance.
Necessary measures are yet to be taken by the present government for the passage of the ordinance with regard to an FRC, which was promulgated during the caretaker government's rule in 2007.
The financial reporting council should immediately come into being, said BB Deputy Governor Murshid Kuli Khan, SEC Chairman Ziaul Haque Khondker and DSE President Rakihur Rahman, echoing Mirza Aziz's view.
Pointing his finger at I CAB's lack of biting power, Khan said: “An FRC will ensure accountability. I hope the government will pass the law soon.”
Khondker said, “Capital market will benefit in a long run from such an FRC.”
Backing the move, Rakibur Rahman was however opposed to any sort of over-regulation'.
ICAB President Nasir Uddin Ahmed said the FRC is a donors' prescription and may not be viable for a country like Bangladesh.
“No South Asian country has an FRC. It may not be applicable for us,” Ahmed said.
Jamaluddin Ahmed, former president of ICAB, said it might create mess.
“The government will appoint people of their own choice, but they may not be of sound knowledge,” he noted.
The other issues the speakers dwelt on were misconception about professional accountants, their transparency and accountability.
Accountants' role in the ongoing global economic meltdown also came up for discussion.
They also pointed to the existence of bad elements in accounting practitioners like other professions in the country.
“They (accountants) should not be condemned randomly,” said Salman F Rahman, president, Bangladesh Association of Publicly Listed Companies.
Mahbubur Rahman, president of International Chamber of Commerce, Bangladesh, questioned why revenue officials do not accept auditors' reports for tax assessment.
Prothom Alo Editor Matiur Rahman delivered his welcome address, while Joint Editor Abdul Qaium moderated the roundtable.
SM Aminur Rahman and Nurul Amin, managing directors of Janata Bank and NCC Bank, also spoke.