If you enquire at the apex body of the chartered accountants about the companies and firms its members audit and sign annually, you will get to know the number is about 16,000.

But if you check with the National Board of Revenue (NBR), you will come to know that roughly 35,000 firms furnish their income tax and audited statements yearly as part of tax compliance.

The gap clearly shows that there is something very fishy: a group of people have been involved in preparing fake audited financial statements and are submitting them to evade paying actual amount of tax.

"We are going to stop this. This affects our good will," said Mohammed Forkan Uddin, vice-president of the Institute of Chartered Accountants of Bangladesh (ICAB).

He said the ICAB has developed a Document Verification System (DVS) to stop the preparation of fake and multiple financial statements by unruly firms.

The ICAB and the NBR are expected to sign an understanding agreement today to launch the DVS in order to prevent the practice of submission of fake audited financial statements.

The ICAB said financial documents endorsed by third person to mislead the regulating authorities and stakeholders will not be possible after the launch of the DVS, which will allow taxmen to check authenticity of financial statement submitted by firms along with their income tax returns.

"This will help the government get an increased amount of revenue," said Uddin, adding that the online audited accounts verification systems will also enable the government to know the actual number of companies operational in the country.

Bangladesh has more than 180,000 officially registered companies.

Uddin, also the convener of the ICAB Taskforce on DVS, said the online-based audited accounts verification system will help the Registrar of Joint Stock Companies and Firms get more revenue.

Under the online system, ICAB's practicing members will give five key financial data such as profit, turnover, asset and liability of a company, generate an 18-digit document verification code (DVC), write the DVC in the audited financial statements and sign the report.

The financial documents submitted to the revenue authority, banks and non-bank financial institutions could be verified through the search option on the DVS Portal by sharing a few information such as the name of person, organisation, the purpose of verification, unique code of documents, mobile number and email address, said the ICAB. 

Uddin said partners of chartered accounting firms will have to start generating the DVC and sign the audited financial statements from December 1.

"We want to sign an agreement with the Bangladesh Bank too in order to ensure that actual audited financial statements are submitted by firms to apply for loans," he said.

"If we can do that, the tendency of showing inflated profits to avail loans will come to a halt. This will help reduce default loans."

The NBR is also willing to plug the loopholes in the submission of fake audited accounts by firms.

In August, it formed a team to identify and prepare a list of the companies that do not have valid taxpayer identification numbers (TIN) and do not submit tax returns.

In September, both the NBR and the ICAB also sat to develop a system to authenticate audited financial statements.

Finance Minister AHM Mustafa Kamal is expected to inaugurate the DVS today.