Days of making fake audit reports are now over: ICAB

There was a tendency of many businesses to submit fake audit reports to evade taxes.

To prevent the malpractice and ensure proper revenue generation from the corporate sector, the Institute of Chartered Accountants of Bangladesh (ICAB) already launched the Document Verification System (DVS).

One year into the DVS launch, Chartered Accountant (CA) firms audited nearly 37,000 reports. Before introducing the system, the CA firms audited 19,000 reports on an average.

“The data indicated that the businesses, which previously submitted fake audited financial statements, are now going to the professional CA firms to authenticate their audited financial statements. This is a significant success,” said ICAB President Md Shahadat Hossain after signing a Memorandum of Understanding (MoU) with the Bangladesh Investment Development Authority (BIDA) in Dhaka on Tuesday.

The ICAB president and BIDA Executive Member (International Investment Promotion) Mohsina Yasmin signed the MoU. Earlier, the National Board of Revenue made it mandatory to verify companies’ audit reports with newly introduced DVS of the ICAB.

BIDA Executive Chairman Md Sirazul Islam, ICAB Vice President Fouzia Haque, and BIDA Director General Shah Mohammad Mahboob were present during the signing ceremony. Under the MoU, BIDA will get access to use DVS for verifying the authenticity of audited financial statements of different entities.

The ICAB president said DVS has already become one of the important tools to bring accuracy in ensuring accuracy in the financial statements.

“If the stakeholders act as cooperative, the DVS will be more effective which will ultimately boost the revenue collection of the country,” he said.

The BIDA executive chairman said, “It is very unfortunate that some companies of the country submitted different financial reports, which is not acceptable in a developed country.”

He hoped that the DVS will be effective to bring accuracy to the financial statements and ultimately NBR will be the most beneficiary.

Highlighting the purposes of launching of DVS, ICAB Council Member Mohammed Forkan Uddin said, “Foreign investors see first the audited financial statements of a company before making a decision for cross border investment, NBR needs audited financial statements for revenue assessment, and the banks require it for sanctioning loan.”

ICAB’ DVS will ensure the authenticity of these audited financial statements which will ultimately reduce the number of loan defaulters and bring confidence for foreign investment, he said, adding that it will also enhance the revenue and thereby change the financial eco-system of the country.

DVS has already become quite acceptable to the business community and other regulatory bodies. ICAB has similar arrangements with NBR, Financial Reporting Council, Bangladesh Securities and Exchange Commission , NGOs Affairs Bureau and Registrar of Joint Stock Companies and Firms, according to ICAB.

ICAB has developed the DVS to authenticate the audited financial statements of different entities.