Audit rights in Bangladesh: Quality, competence and the rule of law

Bangladesh is witnessing a growing debate over who should be legally authorised to conduct audits.

As someone qualified in both Chartered Accountancy (CA) and Cost and Management Accounting (CMA) from India, I value the contributions of both professions. CMAs play critical roles in cost control, internal audit, decision support, and performance reporting. However, statutory audits are a different domain—one that requires legal authority, structured audit training, and supervised experience, which only Chartered Accountants in practice are mandated and equipped to provide.

In Bangladesh, statutory audits are mandated under various laws, including the Companies (Amendment) Act 2020, Income Tax Act 2023, NGO Affairs Bureau regulations, the Societies Registration Act, and rules governing trusts, clubs, and cooperative societies. The right to conduct these audits rests exclusively with members of the Institute of Chartered Accountants of Bangladesh (ICAB), as per these statutes and the Chartered Accountants Order, 1973. The practices of financial institutions, regulators, and the Registrar of Joint Stock Companies (RJSC) also reinforce this framework.

This legal structure aligns with global best practices. In India, only chartered accountants (CAs) can perform statutory audits. In the UK, members of CIMA are not permitted to sign audit reports. In the US and Canada, where legacy CA and CMA bodies have merged into the CPA designation, only CPAs are authorised to conduct audits. The underlying rationale is straightforward: public audit responsibility should reside with a single, regulated, and competent body to ensure consistency, integrity, and public trust.

ICAB's three-year articleship under audit practitioners, followed by two years of post-qualification experience, aligns fully with IFAC's International Education Standard 8, which mandates audit training under a qualified audit supervisor. While CMAs bring valuable financial and cost management expertise, these do not substitute for structured, audit-specific training.

The rigour of ICAB's framework mirrors the expectations in other regulated professions. Just as doctors must undergo supervised clinical internships and lawyers must practise before they are eligible to appear before higher courts, auditors must be developed through sustained, monitored professional pathways.

Proposals to allow professionals other than certified accountants (CAs) to conduct audits of entities other than companies are not supported by current legislation. Audits—whether of companies, NGOs, or public sector entities—must adhere to the International Standards on Auditing (ISA) and International Federation of Accountants (IFAC) guidelines. Only certified accountants (CAs) in practice are subject to this regulatory framework.

Critics argue that poor audit quality deters foreign direct investment (FDI) and facilitates money laundering. However, these issues are not unique to Bangladesh. From Enron to recent lapses involving Big Four firms worldwide, audit scandals occur across jurisdictions. While such cases raise valid concerns, they are the exception rather than the norm. Moreover, the primary responsibility for curbing money laundering lies with central banks and financial regulators. Auditors play a complementary, not central, role.

The answer to concerns about audit quality is not to expand audit rights arbitrarily but to strengthen regulatory oversight. Bangladesh needs a robust, independent audit regulator akin to India's National Financial Reporting Authority (NFRA) or the US Public Company Accounting Oversight Board (PCAOB). The Financial Reporting Council (FRC) should be empowered with both legal and institutional capacity to monitor audit quality and enforce discipline.

Instead of a turf war, ICAB and ICMAB should collaborate on shared priorities such as improving ESG reporting, advancing digital finance, and supporting public sector reform. ICAB already provides a structured pathway for qualified CMAs to become CAs, offering exemptions along with mandatory audit training—striking a balance between inclusivity and competence.

Ultimately, audit is not about professional equality; it is about legal mandate, professional rigour, and public interest. Any reform of the audit framework must be grounded in law, international standards, and global best practices—not lobbying or professional rivalry.