ICAB digital method to bring transparency to financial audits
Financial audits of private firms will henceforth be more transparent and authentic as the official examination of companies' financial records will come under digital scrutiny.
To this end, the Institute of Chartered Accountants of Bangladesh (ICAB) has developed an online platform called Document Verification System (DVS).
The Financial Reporting Council (FRC), the financial statement regulatory body under the finance ministry, signed a Memorandum of Understanding (MoU) with ICAB on Tuesday with regards to the use of the online portal.
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FRC Chairman Mamid Ullah Bhuiyan and ICAB president Muhammad Farooq signed the agreement at the ICAB Bhavan in the capital.
Both organizations claimed that the online system will help stop all malpractice in audits and put an end to the publication of fabricated reports.
Mamid Ullah Bhuiyan mentioned that DVS will help in quicker and easier verification of companies' statements.
He also called for steps to deploy the system to improve audit quality.
Citing a report, the FRC chair said listed companies in the country have contributed around 9% to GDP, which is one of the lowest figures in the world.
"But revenue earning will rise if audits are conducted properly."
Mamid Ullah cited an example of a local company declaring a Tk25 crore profit in its tax return submission, however a statement of the same company shows a Tk125 crore profit in supporting documents submitted for a bank loan.
In his address, ICAB president Muhammad Farooq said that the DVS has now eliminated the double-audit system.
This transparent system will ensure accountability and strengthen the monitoring and review system of financial statements, he continued.
ICAB vice-president Muhammed Forkan Uddin said that along with a rise in revenue income, the number of loan defaulters will also drop as no company will be able to use fake statements to get a loan.
DVS will generate a unique code for each audited company and that organization cannot be re-audited, he explained. He also added that the company statement will not be acceptable anywhere without that code.
