Practices of Accounting Standards in the Financial Reporting of the Public Limited Companies in Bangladesh

Abstract

The Bangladesh Securities and Exchange Commission and the Institute of Chartered Accountants of Bangladesh have demonstrated a keen interest in implementing International Financial Reporting Standards (IFRS) and International Standards on Auditing (ISA) to upgrade the quality of corporate financial reporting. Various steps have already been taken, however, further results will require the design and implementation of a comprehensive action plan on accountancy reform. This report provides an assessment of accounting and auditing practices within the broader context of the Bangladesh institutional framework and capacity needed to ensure the quality of corporate financial reporting. The accounting and auditing practices in Bangladesh suffer from institutional weaknesses in regulation, compliance, and enforcement of standards and rules. The preparation of financial statements and conduct of audits, in many cases, are not consistent with internationally acceptable standards and practices. Better-qualified graduates generally do not join the accounting profession because it is not viewed as a stepping-stone to a rewarding and prestigious career. The out-of-date legal requirements, widespread noncompliance with accounting and auditing standards, ineffective enforcement mechanism, poor quality accounting education and training, and inadequate adherence to professional ethics have contributed to the weakness of the financial reporting regime Here I have found that at few years before review of the accounting and auditing environment in Bangladesh noted that national practices were not in line with internationally acceptable standards and suffered from "institutional weaknesses in regulation, compliance, and enforcement of standards and rules." I along with expertise therefore recommended improving the accounting and auditing framework by adopting International Financial Reporting Standards (IFRSs) without any modifications and setting up an independent oversight body for enforcing international standards. As part of its efforts towards convergence, per Deloitte IAS Plus website, as of 2007 the Institute of Chartered Accountants of Bangladesh (ICAB) adopted 41 IFRSs as Bangladesh Accounting Standards. The national standards are mandatory for all listed companies and recommended for other entities. In a 2009 ICAB Action Plan, the Institute reiterates its commitment to convergence and makes clear that it will be adopting international standards on an ongoing basis. The ICAB Action Plan also adds that it is in the process of reviewing its educational requirements and strategies with regard to IFRS dissemination and training. So here I have seen that some listed companies Eastern housing, Delta Brac Housing Finance Corporation limited, National Housing and Investment Limited, financial reporting is followed all the accounting Standards of BAS in contrast with IAS in presenting their financial statements.