Firms with Tk 5cr annual revenue to come under FRC’s radar
Firms that rake in annual revenue of at least Tk 5 crore or hold assets of Tk 3 crore and liabilities over shareholders' equity of Tk 1 crore will come under the purview of the Financial Reporting Council (FRC) from now on.
In 2016, the government set up the FRC, the regulatory body on accounting, reporting, auditing and actuarial professions in Bangladesh, to ensure transparency in the accounting of listed and non-listed companies.
Previously, the FRC had jurisdiction over any "public interest entity" alongside financial service and microcredit providers, non-bank financial institutions, insurers, state-owned enterprises and public limited companies.
The criteria have been set to clarify which firms fall under the "public interest entity" category in the Financial Reporting Act, 2015.
The FRC made the criteria clarification through a circular last week.
"We have widened our jurisdiction so that small companies become aware of maintaining fair and accountable financial reports," said Mohammad Mohiuddin Ahmed, executive director of the Financial Reports Monitoring Division at the FRC.
He said the clarification would enable the council to investigate even small companies.
However, investigations will not begin right away into every small company; rather a stringent risk management approach will be followed to conduct probes every few years on some companies and annually on others, Ahmed said.
"We want to establish a self-monitoring system so that they publish the true picture in their financial reports willingly and we will carry out random checks to see whether they are doing it correctly."
"We can also review financial reports by outsourcing and forming a review committee from the private sector."
With the criteria classification, more firms will have to prepare and submit financial reports. The FRC will not make it mandatory for small companies to follow international financial reporting standards, he said.
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