Good corporate governance and strong legal infrastructure are needed to deal with financial sector anomalies in the country, experts suggested yesterday.
They also pointed out that in the context of increasing digitalisation, compliance to accounting standards is essential for fair and transparent financial reporting.
Their suggestions came at a virtual conference on "Audit Regulatory Reforms in Bangladesh -- The Way Forward," organised by the Institute of Chartered Accountants of Bangladesh (ICAB) on Saturday.
If good governance is not ensured in the corporate sector, audit firms will not be able to prepare good audit reports for companies, said Mohammad Muslim Chowdhury, comptroller and auditor general of Bangladesh.
He said there are many allegations that audit firms make substandard financial reports, but attention should be paid as to why that happens.
"Ownership concentration and family dominance in the corporate sector is one of the biggest constraints to ensuring corporate governance in Bangladesh," he said.
The Financial Reporting Council (FRC) could take regulatory initiative to appoint independent director in the board based on his/her academic background and expertise.
Chowdhury said the Financial Reporting Act (FRA) covers the compulsion of public interest entity besides financial courses. Three years after formation, FRC has not been strengthened with its full capacity.
Referring to low auditing fees, he said, "Audit firms can't survive by only providing auditing services. Firms should be allowed to provide non-auditing services through necessary regulatory reform for the sector's survival."
ICAB President Muhammad Farooq said the initiative has been taken to develop integrated audit software for the CA firms of Bangladesh for their capacity building.
"Using the software, auditors will be able to retrieve the necessary information in a timely and efficient manner," he said.
Md Hamid Ullah Bhuiyan, chairman of the FRC, also spoke while Javed Siddiqui, associate professor at the Alliance Manchester Business School, UK, presented the keynote paper.