Regulators must enforce ethical standards in business
Analysts yesterday urged regulators to take exemplary action against people who violate accounting norms in preparing financial reports.
Some companies prepare three financial reports instead of one for a specific period due to lack of ethical practices, said Arifur Rahman, chief rating officer of Emerging Credit Rating.
One report with low sales figure goes to the National Board of Revenue; banks receive the second -- with high profit figures, and the company owner gets the third with real trade figures, he said.
“But they submit all three reports to the rating agencies, which confuse us while rating the companies' strength.”
Rahman spoke at a roundtable on ethics and accountability in accounting process, organised by the daily Prothom Alo in association with the Association of Chartered Certified Accountants (ACCA) at the newspaper's office in Dhaka yesterday.
The regulator should set examples by taking steps against such officials, as it is hard to find any dishonest accountant to get punished, he said.
Ethics are needed in every sector to ensure accountability, Commerce Minister Tofail Ahmed said at the event as the chief guest.
The government has already demutualised the bourses to ensure accountability, Ahmed said.
The transparent statements of companies serve the interest of investors, Abdul Quayum, associate editor of the daily Prothom Alo, said while moderating the programme.
Companies should follow the best accounting standards and ethics to remain liable to the investors, Quayum said.
Bangladesh needs professional accountants for the sake of investment and economy, said Mohua Rashid, country manager of ACCA, a global body for professional accountants.
“We support our 170,000 members and 436,000 students throughout their careers, providing services through a network of 91 offices and active centres.”
“Our global infrastructure means that exams and support are delivered at a local level, directly benefiting stakeholders wherever they are based.”
“We use our expertise and experience to work with governments, regulators, professional bodies and employers to develop the global accountancy profession and to act for the public interest.”
Accountants should combined ethics with accountability to prepare quality accounts, said Kausar Alam, chief financial officer of Rahimafrooz Group.
First, the companies should follow some ethical rules at the personal level and also at the institutional level to ensure accountability, Alam said.
“The focus is on how we can overcome the challenges we face while applying ethical rules.”
Companies had to suffer for doing ethical business, he said.
Accountants are violating accounting rules to get the cost-benefits, he said. For instance, low sales figures are shown to shrink profit that helps in avoiding high taxes, he said.
The time has come to follow a unified code of ethics in accounting, said Showkat Hossain, president of the Institute of Chartered Accountants of Bangladesh (ICAB).
“We are working to implement a unified code of ethics among the members of South Asian Federation of Accountants,” Hossain said.
ICAB takes action on a regular basis against the violators of accounting standards, he said. “We are planning to close some firms due to their unethical practice.”
Mohammed Salim, president of the Institute of Cost and Management Accountants of Bangladesh, also echoed the views of Hossain on a unified code of ethics.
Bangladesh needs a group of professional accountants to maintain the best ethical practices, said Haider Ali Khan, director of Dhaka Chamber of Commerce and Industry.
“First, we should develop the total atmosphere of the sector,” Khan said.
The regulators should be given more power to develop ethical practices in accounting, said Muhammad Abdul Mazid, chairman of Chittagong Stock Exchange.
“We should set examples of good accounting practices to develop values in accounting,” said Mazid, also a former chairman of NBR.
“We should ensure transparency in sending and receiving financial information,” said Professor Iqbal Ahmad, director of the Institute of Business Administration, Dhaka University.
All universities should focus on teaching the subject of business ethics, Ahmad said.
Bangladesh Securities and Exchange Commission should set a uniform accounting standard for the listed companies to ensure best use of ethics in business, said Mohammed Nurul Amin, managing director of Meghna Bank.
The Financial Reporting Act should be made flawless to serve the interest of companies, Amin said.
BSEC can form a strong team to assess financial reports of listed firms, said Prof Momtaz Uddin Ahmed, chairman of the accounting and information systems department of Dhaka University.
“We teach our students ethics and governance to develop professional behaviour.”
Prothom Alo Editor Matiur Rahman was also present.
Comments