Role of both the professional accountants and auditors are highly significant in ensuring integrity and accountability in the country’s economic sector, said Mohammed Forkan Uddin FCA, President, Institute of Chartered Accountants Bangladesh (ICAB).
In an exclusive interview with Bangladesh Post, ahead of the International Accounting Day-2024’, the ICAB President highlighted that the CFOs need to be more empowered by the Financial Reporting Council (FRC) so that they can play their role strictly for making a fair and appropriate financial report of any company that ultimately may contribute to establish integrity and transparency in the corporate sector.
Replying to a set of queries made by Bangladesh Post, Mohammed Forkan Uddin FCA highlighted different aspects related to the accounting and auditing professions, it’s importance and challenges in Bangladesh.
The excerpt of his interview is produced for the Bangladesh Post readers.
Bangladesh Post: First of all could you please brief us the role accountants in maintaining the integrity and transparency in economic systems?
Forkan Uddin: Integrity and transparency in accountancy are very important but, you know, the words ‘integrity’ and ‘transparency’ are not absolute, rather they are apparent because ensuring these things are not dependent solely upon the accountants. Ensuring integrity depends upon two separate parts, one is those who are preparing the financial reports while another one is who are to perform as auditors.
The major responsibility to ensure integrity goes upon who make the financial report or the management of those particular companies. The Managing Directors, Directors and Chief Financial Officers (CFO) are the main parts of the management. If these people maintain integrity strictly or if they have got their mindset to prepare financial reports maintaining highest level of integrity, then you can say integrity is possible to ensure at its primary level.
Now you can ask what is the role of auditor? You see if the company’s main authority remain unwilling or not interested to maintaining integrity at their stage then the risk of auditors become very high because auditor have to complete their works in a short period of time at the end of the financial year.
Besides, it’s also important that how far the management is disclosing their facts to the auditors. Suppose, a company maintains 10 accounts in different banks but it may provide statements of 9 banks and hiding about one, then what will happen? Auditors have no right to find out all information of his clients, so he has depend upon only what the management provides and mainly integrity lies here.
Not only for accountancy, if it's possible to ensure integrity everywhere in the country then integrity will be ensured in economic system automatically. Importance of integrity lies from the clerical level to Prime Minister, so the national habit or practices is very important in this regard.
Bangladesh Post: How do you evaluate the role of quality financial reporting, auditing, and ethical behavior to enable strong, sustainable, and inclusive economic growth?
Forkan Uddin: Well, you see the responsibility of quality financial reporting lies with accountants but question is that is this depend upon only the desire of accountants? No, it’s not possible if the management or board of the company do not desire.
The CFO of any company is an employee, he has to follow the instruction of his top management otherwise he may lose his job, but CFOs can play their part fairly only if the Financial Reporting Council (FRC), as the regulatory body, empower them to exercise their power.
FRC must keep their guidance in terms of compliance as like in terms of Tax, VAT and other compliance issues and strict regulations about relevant things including under-invoicing, over-invoicing etc.
If the regulator fix some necessary areas where CFOs will have their legal rights to exercise power even if necessary voicing against the management, besides, if the appointment of CFOs become with joint signature of FRC and company authority, only then they will be able to perform in an expected way.
If the CFOs have no fear of losing their job and can act independently, you will see the lack of integrity and transparency will come down by 70 to 80 percent in the country’s corporate sector. Now usually auditors are held liable for lack of integrity but I think the company management is also a part behind this. There must have strict implementations of laws at the same time to develop mindset or habit for fair practices.
Bangladesh Post: What are your messages ahead of the 'International Accounting Day-2024' ?
Forkan Uddin: I believe that the ‘International Accounting Day’ is not only for us rather it’s for all the practicing accounting professionals in the country. Its applicable for the chartered accountants, cost accountants, accounting students and all other relevant bodies and professionals.
You know the day is observed mainly to raising awareness. In observance of the day, the bodies arrange seminar, symposium, rally, workshop and these are done mainly to discuss and analyze the importance, excellence and perfections of the professional accountancy side by side the spirit of the day.
Bangladesh Post: A report, launched recently, suggests that for the first time, the Accounting has made it into the top 10 jobs for Bangladeshi migrants, with almost 13,000 accountants travelling abroad between January and June. How do you evaluate this?
Forkan Uddin: Demands of skilled accountants is increasing hugely day by day in our country as well elsewhere in the world. You see, Accountants and Professional Accountants are two separate things. When professional accountants will go abroad from Bangladesh they will naturally draw much more demands and wages.
This will also boost inward remittance. So we need to pay special attention on creating more and more professional accountants I believe that the government has also responsibilities in this regard. We know that two to three professional accountants can earn remittances equivalent to about 100 workers. The government needs to provide policy related and financial support, we from ICAB will also have to work jointly with government in this regard.
Once, a huge number of Indian manpower used to work in Middle East as workers but today you will find no such Indian workers but almost all of them are Bangladeshi or Nepalese workers, why is this happening, because we are failing to create skilled workforces?
Despite having opportunities we are failing to make this happen, at ICAB we also have responsibilities, we are doing the same and will keep doing in the days to come. I hope the government will help us in this regard.
Bangladesh Post: Now please brief us the role of ICAB in establishing methodology, accountability and transparency in the corporate sector in Bangladesh?
Forkan Uddin: ICAB is such an organization, what I feel that if ICAB is not in existence, the country will not be in existence, because apart from others a country needs business, investment and revenue. You know the public sector employees get their wages through revenue, also development programs of the country are implemented through the fund, generated from revenue. Collecting revenue is not possible without support of auditors because they can’t do assessment without audited financial statements.
If you want to attract Foreign Direct Investment (FDI), the foreign companies will, first of all, seek financial statement and thus both the parties who prepare the financial statements and act as auditors are similarly important. Similarly if you go banks for business, they will want audited financial statements first, and that are done by the people of ICAB.
