country as well as to meet the ever-changing global economic demands of the age, said Showkat Hossain FCA, the newly elected President of ICAB, in an exclusive interview with The Guardian.
In this context, the President further said that ICAB is fast becoming a body of professionals whose aim is to acquire skills and knowledge and to equip its chartered accountant members with best quality education, ethical values by adopting accounting and auditing standards in the country at par with international standards to ensure transparent accounting system in the financial sector at home and abroad efficiently.
He informed us that ICAB is now the learning, training and professional development partner of the Institute of Chartered Accountants in England & Wales (ICAEW) and follows its curriculum and study manuals including exam structure which is the acknowledgement of its true professional standing.
In this context, he mentioned that training in articleship period achieved by ICAB members provided by the ICAB registered The Institute of Chartered Accoun tants of Bangladesh (ICAB), as a sole accounting body in the country, plays pivotal role in producing chartered accountants to fulfil the financial sector’s demands of the audit firms in Bangladesh are fully recognized by ICAEW, which is a significant indication of ICAB’s training quality for the students and members, adding that ICAB members are also exempted from 12 papers out of 15 papers of ICAEW under a MoU signed with them.
The President disclosed that ICAB is now not only providing world class tuition to its own students but also providing tuition to the ICAEW students in Bangladesh under an approved arrangement as tuition provider which is a clear indication of ICAB’s tuition and training quality. He also added that ICAB also has MRA with CPA Ireland and more MRA with different countries are under process.
He informed that ICAB has been recognized and appreciated by the International Federation of Accountants for ICAB’s compliance with IFAC Statements of Membership Obligation that covers quality assurance of audit firms, compliance with the requirements of International Education Standards, IFRS and ISAs, IPSAS, Code of Ethics, Investigation and Disciplinary Measures.
In this context, he mentioned that Bangladesh accounting and reports got highest number of prizes in Best Published Accounts and Reports Awards among the SAARC countries, which is a remarkable achievement both for the ICAB and the country, adding that in current and last years, ICAB nominated Annual Reports even being awarded as the best of bests among all entities in SAARC countries; which indicates the reporting standards in Bangladesh.
Terming chartered accountancy as the most lucrative and remunerative profession, not only in Bangladesh but all over the world, a highly experienced Chartered Accountant, Mr. Hossain said that in the twenty first century chartered accountancy has emerged as a unique profession with paramount importance and in today’s free globalized world, chartered accountants are playing wide variety roles in financial management and policy making worldwide to perform the various types of work such as accounting, taxation, auditing, financial management, project appraisal and consultancy.
The President then mentioned that ICAB is working to build a better Bangladesh towards making sustainable position of the nation in the world and urges the government and other stakeholders to come forward to strengthen and empower ICAB for attaining the goal.
He also urges the chartered accountants to have the commitment to assume their responsibilities, ensuring the highest level of quality and maintaining the professional ethics to help to build a corruption free vibrant nation with dignity and to work together maintaining the highest level of their professional excellence, ensuring the ethical standards and exploring their commitment and quality towards building a sustainable position of Bangladesh in the world.
A-64 year old Chartered Accountant, Mr. Hossain who became an Associate Member in 1977 and Fellow Member in 1986 of ICAB, has been in the ICAB Council since 2004 and also served the ICAB as Vice President in the years 2004, 2006, 2007, 2012 and 2013 and finally has been elected President of ICAB this time.
In an exclusive interview, this high-profile President replied to several questions, covering the entire activities, problems, potentials, contributions and future plans of ICAB, including the different other issues of challenges and developments in the financial sector of Bangladesh. His deliberations are quite excellent, informative and educative as well. The excerpts of his valuable interview are presented here for The Guardian readers at home and abroad.
The Guardian: Please give us a short introduction to the founding history of the Institute of Chartered Accountants of Bangladesh (ICAB) and its Governance Structure?
President: The Institute of Chartered Accountants of Bangladesh(ICAB) is the national professional accounting body established under the Bangladesh Chartered Accountants Order 1973 (President’s Order No. 2 of 1973) for regulating the profession of Accountants and the matters connected therewith.
The Council-ICAB is responsible for the administration and management of the Institute in accordance with the ICAB Bye-Laws subject to the provisions of the said Order. The Council is composed of twenty members elected by the members of the Institute from its two regional constituencies in Bangladesh, every three years. The President and the Vice-Presidents of the Institute are elected by the Council every calendar year to manage the affairs of the Institute. The President who is the Chief Executive of the Institute heads the Council. The Council is assisted by various Standing and Other (Non-Standing) Committees and Boards of the Council. For the purpose of assisting the Council and the committees in matters concerning their functions, the Council is empowered to constitute Regional Committees, the members of which are elected by the general members of the respective constituencies. Currently there are two Regional Committees, one in Dhaka and another in Chittagong, with one London-based UK Chapter Management Committee and another Toronto-based North American Chapter. The day to day running of the Institute is delegated to the Secretariat, headed by the Secretary.
The Ministry of Commerce, Government of the People’s Republic of Bangladesh is the Administrative Ministry of the Institute of Chartered Accountants of Bangladesh.
The Guardian: Please discuss the aims and objectives of ICAB and say how far it is able to implement its aims and objectives?
President: To meet the ever-changing global economic demands, the ICAB is fast becoming a body of professionals whose aim is to acquire skills and knowledge and to equip its members (Chartered Accountants) with best quality education, ethical values by adopting accounting & auditing standards in the country at par with international standards. ICAB Members are working home and abroad efficiently. ICAB is also working with other organizations to ensure transparent accounting system in the financial sector.
You may know that, ICAB members hold a widely respected professional accounting qualification which supports enterprise, corporate governance and sustainable growth in the business environment; which is in fact the vision of ICAB. ICAB’s mission is to promote and regulate high quality financial reporting and auditing in Bangladesh, to develop and maintain the competence of professional accountants and enhance the reputation of the accounting profession in all sectors of the economy. The key values of ICAB are integrity, expertise, transparency and accountability.
ICAB is entrusted with the responsibilities to
t Award membership of the Institute to qualified Chartered Accountants of high competence through rigorous useful education and training, who will be able to meet the challenges of the society;
t Uphold professional integrity and honesty of its members;
t Advise the government on taxation, business law and related economic and financial matters;
t Maintain superiority in respect of professional competence;
t Meet the growing demand for qualified Chartered Accountants in Bangladesh;
t Create an environment of mutual cooperation; and
t Carry out continuous research and make in-depth study of related subjects and apply the findings of research in various fields of the Accountancy Profession.
I firmly believe that maintaining the values, ICAB is doing a great job for the development of the profession and the nation at large. ICAB is working on creating expertise in accountancy profession who are not merely the accountants rather the business leaders and advisors in nation building. ICAB believes that we can establish the transparency and accountability in every respect of our society through maintaining the highest level of professionalism. We are entrusted ourselves for inspiring business confidence in Bangladesh.
The Guardian: In this context, would you discuss the overall activities of ICAB?
President: For Regulating the Accountancy Profession and matters connected therewith in the country, ICAB has been endeavoring to
t Administer its students and members
t Organise coaching classes for the students, make available the updated study materials which are in fact in line with ICAEW and in compliance with International Education Standards (IES), facilitate their study and training process through the firms, conduct the whole process of examination and declaring exam results twice in a year;
t Maintain IES requirements in case CA Education at every level;
t Provide specialized training and professional expertise in Accounting, Auditing, Taxation, Corporate Laws, Management Consultancy, Information Technology and related subjects;
t Impart Continuing Professional Development (CPD) program to its students and members;
t Adopt and publish the up-to-date Code of Conduct as issued by the International Federation of Accountants as well as by the Institute and cover the code of ethics as the integral part of the CA curriculum, study manuals and exam materials;
t Ensure sound professional ethics and code of conduct by its students and members;
t Foster acceptance and observance of International Accounting Standards/ International Financial Reporting Standards (IAS/ IFRS) and International Standards on Auditing (ISAs) and adopt the same in Bangladesh as Bangladesh Accounting Standards/ Bangladesh Financial Reporting Standards (BAS/BFRS) and Bangladesh Standards on Auditing (BSAs) respectively;
t Use its best endeavors in assisting the Office of Comptroller and Auditor General (OCAG) on understanding the framework of International Public Sector Accounting Standards, its importance, adoption and implementation requirements in Bangladesh;
t Keep abreast of the latest developments in Accounting techniques, Audit methodology, Information technology, Management consultancy and related fields;
t Run the globally compatible quality assurance activities through providing training to the practicing members and their audit staffs, collecting and analyzing the annual return forms from the audit firms, conduct fresh and follow-up QAD visit as an ongoing basis to monitor the quality assurance activities of the audit firms and its partners/proprietors, reporting the visit result to them and taking action as required.
t Take the disciplinary measures in case of any professional misconduct after necessary investigation and the opportunity of being heard to the members against whom the disciplinary action is being taken; ICAB’s Investigation and Disciplinary Committee maintains the independence and transparency in case of Investigation and Disciplinary process and follows the ICAB’s Bye-laws and the IFAC guideline in this regard.
t Liaise with international and regional organizations to influence the development of efficient capital markets and international trade services.
ICAB acts as training provider to government, NGOs, MFIs, NBR, OCAG, Bangladesh Bank, etc round the year. ICAB also provides consultation, volunteer service and works to adopt technical accounting and auditing standards in the country. ICAB is also a supervisory body to regulate the CA Firms whose responsibility is to conduct the audit. ICAB is working with the World Bank’s projects under Public Private Partnership (PPP).
Besides, ICAB works closely with the government and other regulatory bodies, accounting bodies, corporate world, commercial opportunities, employers and communities in home and abroad for ensuring transparency and accountability in the accounting profession.
The Guardian: Would you appraise the roles of ICAB as well as Chartered Accountants (CAs) in ensuring accountability and transparency in the financial sector of the country and also say how far ICAB and the CAs are able in properly guiding the financial sector of the country?
President: ICAB members engaged in financial sectors (both public & private) of the country are working in various aspects of accounting and audit like budgetary control, internal audit, statutory audit, management audit, etc in accordance with the International Financial Reporting Standards (IFRS) and the International Standards on Auditing (ISA). The standards have already been adopted by ICAB as Bangladesh Financial Reporting Standards (BFRS) and Bangladesh Standards on Auditing (BSA).
Besides, ICAB’s annual event of National Awards for Best Presented Annual Reports also encourages sustainable financial reporting, corporate governance and quality audit practices in the country.
Our Chartered Accountants are much capable to guide properly to bring discipline in the financial sector. ICAB’s efforts is on to build the environment for corporate best practices i.e. Bangladeshi enterprises achieved the highest number of Awards for Best Presented Annual Reports for last two years among the SAARC countries, where in maximum cases the contribution of Chartered Accountants in Business and Chartered Accountants in Practice are inevitable. This is the remarkable achievements of the corporate sector as well as it is for ICAB. ICAB is always committed to produce quality Chartered Accountants for quality services to the nation.
The Guardian: Would you focus on the various problems currently prevailing over the country’s financial sector and also discuss the solutions of all those problems?
President: The main hindrances to establish the transparent accounting system in the country are the lack of proper professional knowledge of the management & the preparers of financial reports, the lack of corporate good governance and proper application at par with financial accounting and reporting standards.
To implement those standards in the country, SEC, DSE, CSE, RJSC, NBR, OCAG and relevant ministries should come up with the resolution to employ at least a CA professional in every organization so that they could ensure the standards of the reports at par with the country’s existing accounting standards and Laws. In addition, the corporate internal management should operate their function efficiently and honestly.
The knowledge, communication and coordination gap among stakeholders is another obstacle for reducing the said problems. However, ICAB has been working hard to upgrade the quality of financial reporting through proving of training to other regulatory bodies, preparers and stakeholders on quality, compliance and transparent reporting system.
The Guardian: In this context, would say how far the method of chartered accountancy in being followed in our country in both public and private sectors and also say about the roles of CAs?
President: Basically, appropriate application of reporting standards in any corporate sector is depend on technical expertise and integrity through professionalism; chartered accountancy education and profession covers this area a lot. The Curriculum, study manuals, tuition, examination and training of ICAB are in line with Institute of Chartered Accountants in England and Wales (ICAEW) and in compliance with the requirements of International Education Standards. Because of ICAB’s commitment in maintenance of quality in every process of chartered accountancy, the quality of ICAB Members has been recognizing worldwide.
ICAB is very strong compliant of Statement of Membership Obligations (SMOs) of International Federation of Accountants (IFAC) which covers the quality assurance of audit and assurance firm, professional education in line with International Education Standards, International Standard on Auditing, Code of Ethic, International Public Sector Accounting Standards, Investigation procedures and Disciplinary measures and International Financial Reporting Standards. Fot its compliance with IFAC SMO Action plan, ICAB has been appreciated by IFAC officially for last two years. So ICAB is very much confident on the method it has been following for Chartered Accountancy in Bangladesh. ICAB is working for inspiring the business confidence in Bangladesh.
While almost all the non-practicing chartered accountants serve in key positions of various government and nongovernment organizations, banks, autonomous and semi-autonomous bodies, listed and other types of corporate and non-corporate entities, educational institutions, etc. within the country and abroad, the practicing Chartered Accountants mainly carry out audits of financial statements of various enterprises as public accountants under the banners of various CA firms approved by the Institute.
Apart from specialization in traditional accounting and auditing services, CA Firms are also engaged in:
t Taxation services
t Information Technology
t Statutory and Liquidation services
t Management consultancy services encompassing, inter alia, the following areas;
t Valuation of business and shares;
t Designing of accounting, internal control and operational systems for organizations; and
t Rendering of miscellaneous services like maintaining computerized financial accounts of companies business process re-engineering, management selection and recruitment, disinvestments of government enterprises, etc.
t Due diligence study, feasibility study etc.
I can proudly say that ICAB Members are instrumental in implementation of IFRS/BFRS, IAS/BAS, ISA/BSA, and the related laws and obliged to ensure sound financial reporting, good corporate governance and true and fair auditing practices for the corporate and other entities in Bangladesh.
CAs work mainly in two aspects; the audit and the preparation of company’s accounts but can’t do the both at the same time as they have to abide by ICAB rules. Under ICAB Bye-laws CAs who prepare company’s accounts could not audit the accounts vis-a-vis the auditors who audit the accounts shall not engage them in accounts preparation.
Both the practicing and non-practicing members of ICAB have been contributing towards a sustainable business environment in Bangladesh through their professional services.
The Guardian: Would you mention the number of total CAs currently available in the country and also say the national demand of such a highly technical brand of professionals in the country?
President: As of 28 February 2014, the Institute has 1442 members, of whom 1287 are in Bangladesh and 155 in abroad, 1371 are male & 71 are female members. There are 871 Fellows and 571 Associates members as of 28 February 2014. Members of ICAB comprised of non-practicing and practicing Chartered Accountants.
Out of 1442 members, 376 are practicing as public accountants and the rest are either serving in various key positions in public and private organizations, both at home and abroad or self employed running their own business.
Undoubtedly, the demand of CA professionals is increasing in the tandem of rapidly expanding commerce and trade in the country. In estimation, it was revealed that more than ten thousand Chartered Accountants are required in Bangladesh to provide the quality services especially in Preparation and Presentation of Quality Financial Statements in line with IFRS and in practice.
The private entrepreneurs, who are supposed to engaged those CAs are very shy and do not engage a CA unless they are compelled by the situation in such cases. Moreover, enterprises in EPZ areas are seldom engage the qualified accountants. They are taking service of unqualified accountants & fulfill the requirement of their Head Office about submission of financial statements. If the Government make it mandatory for industries in EPZ areas with certain capital/ finance etc, to appoint / engage a CA then the estimated for the accountants will be justified.
The Guardian: In this context, would you discuss the roles and initiatives of ICAB in producing the sufficient number of CAs to fulfill the demand of the Country?
President: As sole accounting body in the country, ICAB plays pivotal role in producing Chartered Accountants in the country. It conducts CA examinations twice in a year (May-June session & November -December session) in its Dhaka, Chittagong and London centers simultaneously. It is the policy of the Institute not to compromise with the high standard of CA examination. However, the successful candidates of the CA examinations are increasing day by day which is encouraging and very positive notion to meet the increasing demand of CA professionals in the country.
ICAB is following the globally compatible education and examination system in line with ICAEW and IES. ICAB provide tuition to articled students who also receive rigorous training in accounting, auditing, taxation, consultancy and other areas during their articleship. ICAB is well aware about the demand of chartered accountants. But to increase the number, ICAB never intends to compromise the quality. However, ICAB has been working hard for increasing the quality and facility of education process so that student can pass their exams by maintaining high class of quality. ICAB believes that in coming years the number of chartered accountants will be increased significantly.
The Guardian: Keeping this in mind, would you please discuss the various facilities available at the ICAB for the students?
President: For the benefit of its students, ICAB conducts pre-examination tuition (of three months’ duration) twice every year at its Dhaka and Chittagong centres. Experienced Chartered Accountants and reputed university teachers lectured in these classes on all applicable subjects. Furthermore, ICAB supplies approved Study Manuals (duly updated from time to time as required) on all applicable subjects as well as suggested answers books containing paper-wise indicative answers to several years’ past CA examination questions of the Institute to its students at a minimum price. Classes for students are organized at a separate Campus Building in Dhaka and in ICAB Office in Chittagong. ICAB resource pool is full of expertise and up-to-date on professional education especially in accounting, auditing, taxation, financial management, business analysis & strategy, corporate reporting and case study.
The firms are also required to provide practical training to their students which are also linked with their education and examination.
Apart from these, ICAB provides ample library facilities at its central library in Dhaka and regional library in Chittagong where latest text and reference books on various subjects, journals, periodicals, etc. are available for the benefit of its students.
The Guardian: Would you inform what qualifications are required for getting admission into the CA course?
President: As regards the entry requirement of CA profession, a person would require to go through the following successive steps in order to become a Chartered Accountant:
Students having the following qualifications are eligible for Articleship:
a. Under Graduates:
i) SSC & HSC or Equivalent Examinations:
GPA 4 in SSC with GPA 5 in HSC
ii) GPA 5 in SSC with GPA 4 in HSC
Period of Articleship: Four (04) years.
‘O’ & ‘A’ Levels:
-Minimum 38 points in ‘O’ Level in minimum 5 subjects & maximum 07 subjects and
-Minimum 12 points in ‘A’ Level in maximum 03 subjects
-Points to be considered as Grade ‘A’ = 10 points, ‘B’= 6 points, ‘C’=4 points
-No point will be considered for Grade less than ‘C’
Period of Articleship: Four (04) years.
Provided that candidates securing 3As in ‘A’ Level with the necessary requirement in ‘O’ Level will have a period of Articleship of three years and six months.
iii) ‘O’ Level & HSC:
-Minimum 38 points in ‘O’ Level in minimum 5 subjects & maximum 07 subjects and
Minimum GPA-4 in HSC
Period of Articleship: Four (04) years.
b. Graduates and Post Graduates:
Graduates or Post-graduates in any discipline having minimum 07 (seven) points and securing at least 2 points at each level (upto graduation) from any recognized Board/Public University/ National University/ Private University/ Institute (as approved by University Grants Commission of Bangladesh).
t In case any candidate has passed both the examinations, either ‘O’ Level or SSC examination result (whichever earns more point) will be considered.
t In case any candidate has passed both the examinations, either ‘A’ Level or HSC examination result (whichever earns more point) will be considered.
c. ACMA/FCMA and ACCA/FCCA
ACMA or FCMA of ICMAB and ACCA or FCCA (with no consideration of Division/ Class/CGPA in any Level of academic qualification/ examination). They will be exempted from the following papers:
Professional Stage (Knowledge Level):
Business and Commercial Law
Professional Stage (Application Level)
t He /she will have to successfully complete a ‘Conversion Course’ on ‘Preparing Ltd. Co. Accounts’ to be organized by ICAB in order to get exemption from PS(K) accounting. Alternatively, he/she will have to pass the ‘Accounting paper.
t Period of Articleship: 02 (two) years.
The Guardian: Would you discuss the method of teaching at ICAB and also say who the teachers are here to teach the students?
President: The method of teaching of CA students consists of acquiring practical training in CA firms and coaching classes. Students have to get admission in coaching before appearing in the examination. ICAB conducts tuition classes (of three months’ duration) on all applicable subjects in the pre-examination period at half-yearly intervals. In these classes, copies of lecture synopses are distributed among the students free of cost. The lectures are intended to cover relevant syllabuses as well as detailed study of some of the past CA examination questions of the Institute.
One of the important parts of CA Education is practical training and case study type exam resources. Practical problem and solution support student to enhance their confidence being business leader. The beauty of Chartered Accountancy is that an ordinary students can be the top class expert business advisor through acquiring practical knowledge throughout his or her training period in addition to the achieving tuition on our globally compatible curriculum. A general student can be qualified as a chartered accountant if he or she is just punctual, industrious and disciplined. Our training and tuition are in line with international education standards and accepted by ICAEW. ICAEW, being our learning partner is the part of our educational development. ICAB is also the approved tuition provider for ICAEW students in Bangladesh.
The lectures on all applicable subjects are delivered by experienced Chartered Accountants and reputed University Teachers selected by ICAB with good remuneration.
The Guardian: Would you also discuss the interactions of ICAB with ICAEW, IFAC, IASC, SAFA and also others bodies at home and abroad?
President: ICAB reciprocates by hosting such events in Bangladesh from time to time, which are attended on invitation by representatives of IFAC, and various Member-Bodies of SAFA, etc.
ICAB’s certification is accepted by leading international accounting bodies, the Institute of Chartered Accountants of England and Wales (ICAEW). ICAB has signed MOU and MRA with ICAEW and CPA Ireland. ICAB has strong ties with World Bank. In the country, it has MoU with the Office of the Comptroller and Auditor General (OCAG). ICAB provides training to Central Bank of Bangladesh, National Board of Revenue and other regulatory bodies and Non-Government Organizations.
As per MoU ICAB Members can be the members of ICAEW after successful completion of advanced stage (03 papers out of 15). These members should be entitled to apply for UK Practicing Certificate (PC) subject to meeting the standard ICAEW PC requirement. ICAB members need to pass ICAEW’s following three papers of final stage:
1. Technical Integration- Business Reporting
2. Technical Integration- Business Change, and
3. Case Study.
ICAB has signed a Mutual Recognition Agreement (MRA) with the Institute of Certified Public Accountants in Ireland (CPA Ireland) recently.
According to the signed MRA to attain the CPA Ireland membership, ICAB members have to complete and pass only 01 paper out of 17 papers of CPA Ireland examination. ICAB members need to pass CPA Ireland’s only one examination from the Professional Stage 2, “Strategy and Leadership” and an On-line “Overview of Irish Tax and law”.
ICAB is the approved learning and development partner of ICAEW and also approved tuition provider of them in Bangladesh. Training in CA firms in Bangladesh has been fully recognized by ICAEW since 2009; which is in fact a great honour for Bangladesh.
The Guardian: In this context, would you say the basis on what the standard is set time to time and also tell us something about the Accounting International Standard?
President: The international Accounting Standards (IAS) are formulated, reviewed, finalized and issued under guidance and supervision of the International Accounting Standards Committee (IASC), of which ICAB is a member. On the other hand, the International Standards on Auditing are formulated, reviewed, finalized and issued under the guidance and supervision of the International Auditing Practices Committee (IAPC) of IFAC. The IAS/IFRS and ISA are regularly reviewed by the IASC and the IFAC and updated from time to time as deemed fit.
The Institute has been following IAS/IFRS and ISA/IAPS as Bangladesh Accounting Standards (BAS)/Bangladesh Financial Reporting Standards (BFRS) and Bangladesh Standards on Auditing (BSA /Bangladesh Auditing Practices Standards (BAPS) respectively. These standards are duly adopted by ICAB.
As an ongoing basis, ICAB expert team lead by the Technical and Research Committee of the Council of the Institute review and adopt the IFRS/IAS and publish the BFRS/BAS and BSA in Bangladesh maintaining the due process in this regard.
The Guardian: In this context, would you appraise the roles and activities of different chartered accountant firms working in Bangladesh?
President: The practicing Chartered Accountants carry out the audits of financial statements of various enterprises as public accountants under the banner of various CA firms approved by the Institute. Apart from specialization in traditional accounting and auditing services, CA Firms are also engaged in taxation services, information technology, statutory and liquidation services, management consultancy services like valuation of business and shares, designing of accounting, internal control and operational systems for organizations. The firms also render miscellaneous services like maintaining computerized financial accounts of companies’ business process, re-engineering, management selection and recruitment, development of HR, disinvestments of government enterprises, etc.
The Guardian: Would you also give your reaction to the criticism that the chartered accountant firms are not making appropriate guidelines to the nation rather they are involved in making money in different ways?
President: I do not agree with this perception. The fact is that in most cases, CAs maintain the international standards. We have formulated auditing standards in line with the international standards which is mandatory for the audit firms to maintain in providing audit and assurance services. There could be some incidents where an individual audit firm fails to maintain the standards fully but that does not necessarily mean the entire industry lacks the standards.
ICAB has been providing up-to-date guidelines as an ongoing basis to practicing firms in Bangladesh. Among many accounting bodies in the world, few accounting bodies have separate Quality Assurance Department (QAD); ICAB is one of those few bodies. ICAB’s QAD activities have been well appreciated by IFAC and ICAEW. We are working to enhance the quality of the profession. We have the Audit Practice Manual from the Institute so that any audit firm can follow the audit guidelines at minimum. However, a firm can establish its own audit manual and procedures based on ICAB adopted International Standards on Auditing and Quality Control Standards. We believe that maximum of our firms maintain the quality as required by ICAB and guide the nation in proper manner.
We should not blame any other regulatory bodies; but we believe that if other regulatory bodies who are engaged with the regulation of the corporate entities for financial reporting and other compliance issues do work properly and perform their duties efficiently and effectively then Bangladesh will have a transparent and accountable corporate culture, fair reporting and good governance. It is true that audit firms have some limitations as they could not audit all the offices or branches of the organization and they audit randomly, in maximum cases on a risk-weighted basis and due to those inherent limitations an audit firm can only give a reasonable assurance through the audit report, not the absolute assurance to the stakeholders. However, ICAB play a proactive role that whether our audit firms are providing quality services to their clients through an effective monitoring procedures. ICAB is also very much proactive to take action against the audit firms through a disciplinary action committee if any complaint is found. There are many instances that we suspend or even cancel the licence of the audit firms for breach of professional ethics as per ICAB Bye-laws. We also impose fine for the professional misconducts depending on gravity of offence. Although ICAB maintains the required procedures before suspending a firm doing professional misconduct, but in maximum cases, the suspended firm get stay order from the High Court.
Practice of good corporate governance and professional ethics by the management, the professionals and different regulatory bodies could be the solution to avert any financial corruption. ICAB has been performing its responsibilities to build a better Bangladesh ensuring implementation of standards and ethics through professionals from its part. ICAB also sincerely expect that all other related parties will perform their respective responsibilities.
The Guardian: What is ICAB’s stand regarding the launching of Financial Reporting Council?
President: To begin with I must say that ICAB is always in favour of any rational measures that ensure the transparency and accountability. ICAB shall be the first to accept any sensible move that can contribute to progress our nation. But at the same time when we are talking about the proposed Financial Reporting Act (FRA) and the proposed Financial Reporting Council (FRC), we can tell you that we should not support anything which is contradictory with the existing regulation, unnecessary in the current context of our economy and even impracticable to implement in our country.
There are so many ambiguous, contradictory, irrational, irrelevant and impracticable sections and provisions in the proposed FRA that if it is implemented then internationally approved accounting and auditing profession will not only lose its independence but also there will be stalemate in improvement and controlling of the said profession in Bangladesh which will seriously hamper the effectiveness of trade and commerce and national economy at large.
The proposed Act has many ambiguities and dualism with the country’s existing law. There has been a valid Institute in the country for regulating and controlling the accounting and auditing system formed under the Presidential Order No-2. Instead of strengthening the organization, the FRC will be wastage of time and resources. Such an organization in this form does not exist any where in the world. The people who are not Chartered Accountants could audit a company by virtue of Section-2(11) of the new FRA. It is a clause conflicting with the country’s existing law and unacceptable as per international rules. However, we are opposing it as it contains some contradictions.
As per Company Act, only Chartered Accountants registered with ICAB can conduct audit of the companies, but as per sections 39 to 50 of proposed FRA, Chartered Accountants will need to take registrations from FRC which will create a conflicting situation.
In fact, the ICAB has been issuing the practicing licences to its eligible members under the byelaws of ICAB. Even under FRC in the UK, there is no such provision for another practicing certificate. Once a practicing certificate is issued by the ICAB under certain regulations, why should there be provision for another practicing certificate? There are also many unanswered questions. The structure, formation, components and function of the Financial Reporting Council (FRC) under this Act did not match within the context of our country’s socio-economic condition as well.
There are provisions for imprisonment for civil offence in the said Act which is totally against the essence of law and justice. This type of provisions are nowhere in the world of accountancy profession, even in UK FRC law. Due to that no brilliant student will come to this profession and ultimately this profession will be collapsed in our Country.
Moreover, the auditors will suffer another red-tape culture and will lose the independence while auditing the enterprises under the control of Ex-Officio members of the proposed Financial Reporting Council (FRC) through this FRA. We are afraid that due to these inherent limitations, the ruling of this law will be self defeating and will seriously affect the profession in the long term. The proposed FRA has not been drafted based on the idea from UK FRC, USA PCAOB and the ground reality in our country context. Even there is no existence of such type of Act in any SAARC Countries. Only Sri Lanka has “The Sri Lanka Accounting and Auditing Standards Monitoring Board” which basically recognizes the adopted international accounting and auditing standards by CA Sri Lanka and makes these standards effective for financial statements since 1999. That Board also empowered CA Sri Lanka to revise, alter or amend those standards. While ICAB has been accomplishing these standards setting activities successfully in Bangladesh, the same type of recognition and empowerment even not considered in the proposed FRA.
While ICAB has been performing successfully having appreciation and recognition from International Federation of Accountants, the proposed FRA and FRC will be redundant and not implementable in our country context and ground reality. But however, ICAB is very supportive to the Government’s objective of ensuring more transparency, accountability and good governance in corporate sectors, accounting and audit profession and due to that instead of forming another body like FRC, ICAB always emphasize to amend the existing CA Order and to include the oversight functions more efficiently, effectively and economically to achieve the objective of the proposed FRA.
As we said that we are always in favor of any rational, implementable positive changes for the greater benefit of the nation, we believe, instead of forming another regulatory body, amendment and up gradation of the existing Bangladesh Chartered Accountant Order 1973 can achieve the very purposes of the said FRC.
The Guardian: Would you discuss the achievements and success of ICAB?
President: As professional accounting body, ICAB made tremendous advancement on quality assurance, setting standards and its dissemination, training and education and overall image building of the profession and the nation.
ICAB is now the learning, training and professional development partner of the Institute of Chartered Accountants in England & Wales (ICAEW) and follows its curriculum and study manuals including exam structure which is the acknowledgement of its true professional standing. Training in article-ship period achieved by ICAB Members provided by the ICAB registered audit firms in Bangladesh are fully recognized by ICAEW; which is a significant indication of our training quality for the students and members. ICAB Members are also exempted from 12 papers out of 15 papers of ICAEW under a signed MoU with them. ICAB is not only providing world class tuition to its own students but also providing tuition to the ICAEW students in Bangladesh under an approved arrangement as tuition provider which is a clear indication of ICAB’s tuition and training quality. Now ICAB also has MRA with CPA Ireland and more MRA with different countries are under process.
ICAB contributes in National Budget Formulation and working on quality financial reporting in Bangladesh. ICAB is providing training on accounting, reporting, taxation, auditing and other essential professional issues under its Continuing Professional Development Program not only to its students and members but also to its stakeholders and other regulatory bodies like Bangladesh Bank, National Board of Revenue, Micro Finance Regulatory Authority, etc.
ICAB has been recognized and appreciated by the International Federation of Accountants for ICAB’s compliance with IFAC Statements of Membership Obligation that covers Quality Assurance of audit firms, compliance with the requirements of International Education Standards, IFRS and ISAs, IPSAS, Code of Ethics, Investigation and Disciplinary Measures etc.
Bangladesh accounting and reports got highest number of prizes in Best Published Accounts and Reports Awards among the SAARC countries, which is a remarkable achievement both for the ICAB and the country. In current and last years, ICAB nominated Annual Reports was awarded as the best bests among all entities in SAARC countries; which indicates the reporting standards in Bangladesh.
An ordinary student can be a qualified world class professional through CA education and practical training provided by ICAB and the audit firms registered under ICAB; it means ICAB is working to build a better Bangladesh towards making sustainable position of our nation in the world. ICAB is firmly rooted in its position, it has speed and advancement; government and other stakeholders should come forwards to strengthen and empower ICAB for the growth of trade and commerce in the country.
The Guardian: In the end, would you please give your valuable message for present and future Chartered Accountants of Bangladesh?
President: In the twenty first century Chartered Accountancy (CA) has emerged as a unique Profession with paramount importance. In today’s free globalized world, Chartered Accountants are playing wide variety roles in financial management and policy making worldwide. They are the professionals who are well trained and equipped with the expertise to perform the various types of work such as accounting, taxation, auditing, financial management, project appraisal, consultancy and so on.
Chartered Accountancy is the most lucrative and remunerative profession, not only in Bangladesh but, over the world. So, CA profession is right choice for them who are bright students. Last but not the least, I must say that CAs have the ample opportunities but those can never come without responsibilities.
Presently Chartered Accountants are not only dealing with the audit, accounts and finance, but also leading the business worldwide being the strategic decision makers in corporate world.
I firmly believe that Integrity, objectivity, professional competence and due care, confidentiality and professional behavior should not be the written basic principle for professional accountants; these should be the principle through performance and maintenance by chartered accountants.
We, the chartered accountants should have the commitment to assume our responsibilities ensuring the highest level of quality and maintaining the professional ethics to help to build a corruption free vibrant nation with dignity. We believe, we can reach at anywhere maintaining quality and commitment with confidence. We should be accountable to ourselves first; we should know what is right and what is wrong; judgment of our work is waiting. We all need to work together maintaining the highest level of our professional excellence, ensuring our ethical standards and exploring our commitment and quality towards building a Sustainable position of Bangladesh in the World.
Short Profile of Showkat Hossain
Showkat Hossain is one of the renowned Chartered Accountants in Bangladesh. He is a Partner since 1998 of Hoda Vasi Chowdhury & Co. Chartered Accountants, an independent correspondent firm to Deloitte Touche Tohmatsu. At present, he is a Director of Union Bank Ltd, a Member of SAFA Board of Director, a Rotarian & Past President of Rotary Club of Islamabad, Chittagong and Chairman of a Charitable Organization named the Chirayata Shanti Society.
Mr. Hossain represents ICAB in the Board of CWASA. He is an Independent Director in the board of Chittagong Stock Exchange. He is also Member of various organizations like Finance Sub-Committee of Chittagong Club Ltd, the Advisory Committee in respect of Financial & Accounts, and the Banking & Taxation of Chittagong Chamber of Commerce & Industries Limited. As Chairman of the Election Commission he successfully conducted the E.C. & Chairman Election of Bangladeshiyo Cha Sangsad (4 times) & Bangladesh Tea Traders Association (Two times).
The Chittagong born Chartered Accountant is the life Member of Chittagong Kidney Foundation, Maa-O-Shishu General Hospital and Shahiq- a disabled organization under Bangladesh National Society for Blinds (BNSB). He is Vice Chairman of Concern Services for Disabled (CSD), Chairman of the Governing body of Doulatpur Primary School and a Member of the Governing Body of Gultaz Memorial High School & College, Doulatpur, Fatickchari Chittagong.
Earlier, Mr. Hossain served in various executive & supervisory positions in Azzawiy Oil Refinery Company, Libya and Ras Lanuf Oil & Gas Processing Company Libya. Prior to his departure for Oversees employment in Libya in 1979, he worked as Management & Financial Accountant in Eastern Refinery Ltd. Mr. Hossain also worked in Glaxo Laboratories (Bangladesh) Ltd as Internal Auditor prior to qualifying as Chartered Accountant. After coming back from Libya, during 1994 to 1996 he was with Ahmed & Ahmed, Chartered Accountants and from 1996 to 1998 he was Finance Director of Sunman Group of Companies, Chittagong.