Audit gaps, national traps

One reason we remain stuck in the slow lane of progress is painfully simple: in Bangladesh, the individual trumps the institution, and the institution trumps the nation. Self-interest isn't just tolerated—it's celebrated. We've perfected the art of spotting others' flaws while remaining blind to our own. Admitting shortcomings? That's social suicide. Sharing credit or professional space? Practically taboo. So, when the moment comes to prioritise, the nation quietly slips behind ego, entitlement, and institutional turf wars. In such a culture, even well-intended reforms get buried under layers of insecurity and resistance.

Take the audit ecosystem, for example. It mirrors the same dysfunction we see across public institutions, banking, and capital markets. With an estimated $17 billion siphoned from banks and FDI inflows stagnating at just $1.6 billion, according to the Financial Times and UNCTAD, investor confidence is visibly shaken. Substandard audits, inadequate enforcement, and monopolistic practices are part of the problem. The establishment of the Financial Reporting Council (FRC) in 2015 was a welcome reform, although it met fierce resistance from vested quarters.

Bangladesh has just 2,005 chartered accountants, compared to 375,000 in India, 10,096 in Pakistan, 7,000 in Sri Lanka, and 9,052 in Nepal. The FRC records only 209 registered firms. ICAB lists just 450 practising members, a startling mismatch against over 300,000 registered companies.

Ironically, Bangladesh actually has two professional accounting bodies: ICAB and ICMAB, both recognised under the Financial Reporting Act 2015. It defines their auditors as "Auditors", their members as "Professional Accountants", and their institutions as "Professional Accounting Organisations". Both ICAB and ICMAB are founding members of IFAC, both adhere to global standards, and both are part of SAFA and CAPA.

Still, only one enjoys the lion's share of statutory recognition. A popular excuse? Practical experience. IFAC clearly states that professional candidates must complete three years of relevant experience, not necessarily through articleship. ICMAB requires three years of managerial experience for associate membership and eight for fellowship. CMA members have held over 100 CEO and 300 CFO positions, reflecting leadership capacity and deep financial insight. Yet, their presence in audit and taxation remains low due mainly to a lack of opportunity.

That needs to change. CMAs should be authorised to conduct audits not covered under the Companies Act. Statutory audits for listed or Public Interest Entities (PIEs) can remain with chartered accountants. But for non-PIE companies, sole proprietorships, partnerships, trusts, and NGOs -- entities outside the Companies Act -- CMAs offer an untapped pool of expertise.

In Pakistan, CMAs can audit Associations of Persons (AOPs) and individuals and conduct statutory audits of companies with paid-up capital under PKR 3 million. The United Kingdom, Canada, Australia, South Africa, and Nigeria recognise multiple professional bodies for audit -- avoiding monopolies and promoting quality through competition.

In Bangladesh, audit fees have surged under monopoly control, while the availability of competent auditors has declined. The current system serves a privileged few while failing to serve the broader economy.

Yet, reforms remain stalled. Despite a reform-minded interim government, change is kept at bay, perhaps for fear of backlash from a loud but narrow segment.

With over 300,000 companies and fewer than 500 practising auditors, Bangladesh is navigating a compliance crisis with a skeleton crew. To address this, audit rights must be broadened. CMA members should be permitted to audit non-PIE and non-registered entities under the oversight of the FRC. This would expand the talent pool, reduce costs, enhance coverage, and ultimately restore trust in governance.

The author is president of the Institute of Cost and Management Accountants of Bangladesh and founder of BuildCon Consultancies Ltd.