Financial Reporting Bill and its effect on business entities
It is expected that the Financial Reporting Bill is likely to come into force around mid-2015 and is currently waiting for Parliament’s approval. When enforced, the Act shall establish a new regulatory body, Financial Reporting Council (FRC) the majority of which shall be comprised..
of government ex-officials. It is also mentionable that although similar oversight bodies are established around the world, they do not exist in other countries in South Asia. The Council seeks to regulate and oversee the country’s financial reporting system by regulating statutory auditors, i.e. Chartered Accountants. The law shall have a provision for 5 years in prison and a fine of Tk. 100,000 or both for violating the reporting procedures or if the financial statements have been inaccurately certified to portray a true and fair view of the state of affairs of the enterprise. If any person or institution continues violating the same, they shall receive a penalty of Tk. 5,000 for every day of such violation.
The establishment of the Council is expected to promote high-quality corporate governance and reporting to foster investment. It is likely to promote high standards of corporate governance by setting the standards for corporate reporting, audit and actuarial practice and monitor and enforce accounting and auditing standards. They are likely to oversee the regulatory activities of the actuarial profession and the professional accountancy bodies and operate independent disciplinary arrangements for public interest cases involving accountants and actuaries. As a consequence, the statutory auditors are likely to act with much more caution thereby leaving no space for errors in the reporting of the state of affairs of the entities.
by------ Belal Chowdhury