2015年-世界发展银行全球_Bangladesh_Report_on_the_Observance_of_Standards_and_Codes___Accounting_and_Auditing_80页_1mb

Summary of the Bangladesh Report on the Observance of Standards and Codes (ROSC) - Accounting and Auditing

Core Content

The Report on the Observance of Standards and Codes (ROSC) - Accounting and Auditing for Bangladesh is part of a 12-module joint World Bank-IMF initiative aimed at strengthening financial systems through the adoption of internationally recognized standards and codes. This 2014 update follows the 2003 report and evaluates the implementation progress of the policy recommendations, while also identifying new challenges and proposing further reforms to improve accounting and auditing practices and financial transparency in the corporate sector.

Main Viewpoints

1. Progress Since 2003

• Significant improvements have been made in the implementation of key policy recommendations.
• ICAB and BSEC have taken notable steps, including the adoption of IFRS, IFRS for SMEs, and ISA.
• ICAB's twinning with ICAEW has led to enhanced training and education standards.
• Quality Assurance Department (QAD) and Investigation & Disciplinary Committee (IDC) have been established to improve audit quality and discipline.

2. Remaining Challenges

• A comprehensive statutory financial reporting framework has not been implemented, particularly for SMEs and micro-entities.
• Statutory requirements for public and non-profit entities are still in development.
• Capacity building for other regulatory bodies (e.g., Bangladesh Bank, RJSC, IDRA, Monitoring Cell) is lacking.
• Teaching and examination methods in universities have not fully aligned with international standards like IFRS and ISA.
• Public sector subjects such as IPSAS are not included in the education curriculum.
• CPD programs are not effectively addressing emerging issues and high public interest areas.
• SOEs and PSEs lack a structured financial reporting framework, leading to inconsistencies.
• Auditors often fail to detect basic disclosure requirements, and small audit firms face challenges in competing with larger firms.

3. Stakeholder Perceptions

• There is a lack of demand for professional accountants in the private sector due to weak enforcement and governance.
• The accounting profession is not attracting high-quality graduates, despite improvements in training and curriculum.
• ICMAB has seen a decline in enrollments, with an average 7% decrease over the last five years.
• Stakeholders suggest that establishing a new independent oversight body may be premature without first improving the capacity of existing regulatory bodies.

Key Recommendations

1. Amend the Companies Act

• Clarify financial reporting and auditing requirements for all entities.
• Differentiate requirements based on entity size and public interest impact.
• Introduce need-based audit for SMEs and micro-entities.

2. Develop a Statutory Financial Reporting Framework

• Create a statutorily-backed framework for SOEs, PSEs, SMEs, and micro-entities.
• Ensure the framework is aligned with international standards (e.g., IFRS for profit-making entities, IPSAS for regulators and non-profits).
• Focus on proactive monitoring and review of financial statements.

3. Strengthen Regulatory Capacity

• Enhance the internal capacity of key regulators to review financial statements and ensure compliance.
• Encourage collaboration between professional bodies and regulatory agencies.
• Address capacity gaps in Bangladesh Bank, RJSC, IDRA, and the Monitoring Cell.

4. Improve Education and Training

• Introduce interim certifications like Certified Accounting Technicians (CAT) or Diploma in Professional Accounting (DPA) to support partially qualified students.
• Include public sector modules (e.g., IPSAS, financial management, regulatory frameworks) in education curricula.
• Expand CPD programs to cover emerging issues and improve communication and English proficiency.

5. Promote the Accounting Profession

• Enhance the profile and attractiveness of the profession through outreach campaigns to universities and schools.
• Develop a strategic marketing plan to attract high-quality graduates.

6. Consider Regulatory Framework Options

• Option a: Establish an oversight body aligned with IFIAR principles to enhance international collaboration.
• Option b: Reframe ICAB's governance structure to provide it with greater independence and corporate functions.

Conclusion

The 2014 ROSC A&A report highlights the need for a prioritized, stakeholder-driven Country Action Plan (CAP) to further improve financial reporting and auditing practices in Bangladesh. The World Bank is ready to support the Government and other stakeholders in implementing these recommendations and developing the CAP, which should be led by the Government and principal stakeholders.

Key Information

• ROSC A&A is a World Bank-IMF initiative to enhance financial systems through international standards.
• ICAB is the dominant professional body in Bangladesh, with 1,570 members, and is a member of IFAC.
• ICMAB is the second-largest professional organization, with 1,080 members.
• BSEC has improved its regulatory functions post-2010 stock market crash.
• RJSC faces capacity and data challenges in monitoring compliance.
• Bangladesh Bank and IDRA need enhanced capacity to enforce financial reporting standards.
• CPD programs are not fully addressing public interest and emerging issues.
• SOEs and PSEs lack a structured financial reporting framework.
• Auditors are not effectively detecting disclosure failures.
• SME audit practitioners face challenges in compliance and competition.

Appendices

• Appendix 1: Recommendations for improving ongoing initiatives by ICAB and ICMAB.
• Appendix 2: Recommended reporting framework for private and public sector entities based on size and public interest impact.
• Appendix 3: Assessment of compliance with IFAC SMO for ICAB and ICMAB.
• Appendix 4: Details of World Bank technical assistance projects.