The Institute of Chartered Accountants of Bangladesh (ICAB) has suspended the auditing licence of four chartered accountants for six months to three years alongside imposing monetary penalties of Tk1-3 lakh each on the charge of professional misconduct.
Another chartered accountant only got fined by the ICAB instead of being suspended for his professional misconduct.
ICAB took such punitive action against them in August this year, according to their website.
As per the latest publication by the body of the country's chartered accountants, the four accountants are Md Anwar Hossain– proprietor of chartered accountancy (CA) firm SM Zakaria & Company, Tofazzul Hussain- the partner of CA firm T Hussain & Company, Md Waliur Thakur- proprietor of CA firm Rahman Thakur & Company, and Aminul Islam- the partners of CA firm Huda Hossain & Company.
The ICAB council also decided to fine Mohammad Abu Kawsar instead of revoking his certificate of practice, considering the context.
ICAB President Shahadat Hossain told The Business Standard (TBS), "Two parties work to audit the accounts of a company or organisation. We can only ensure the transparency, accountability and efficiency of our side. If someone works without complying with accounting standards, then we take disciplinary action, which makes firms more cautious."
"But if the other party [any company or institution] gives wrong information or fake documents, then we have nothing to do against them," he said.
"However, if there is any doubt about the documents provided by them or if the documents are not provided, we mention it in the audit report. And we always ask auditors to do this. We are not responsible for the company's mistakes," he added.
The five individual professional accountants at four CA firms, punished for their proven professional misconduct, are a very small part of the auditors being suspected of compromising their professional standards and ethics.
Accounting regulator the Financial Reporting Council (FRC), in the last 10 months, instructed the ICAB to investigate the auditing with due diligence of at least 42 CA firms and 45 of their partners.
Thanks to the ICAB's Data Verification System (DVS), an online platform launched later last year, that lists all the annual reports okayed by ICAB members and helps users of financial statements to verify if a report was audited by a licensed statutory auditor or not.
Unlike the previous years of dependency on CA firms' annual audit return data from the ICAB, the FRC now directly monitors how many annual reports a CA firm approves in how much time.
Having observed serious contrast in the audit quantity and the engaged firms' capacity in terms of manpower, the FRC suspected the quality of their work, according to sources.
An FRC official told The Business Standard, "It is horrible. With a very small team, some firms have signed more than 200, even 300 annual reports in a short period of four to five weeks, which would need manifold human resources or time if the firms were meant to follow their standard of auditing."
The country has long been suffering from the government's revenue losses, banks' over-lending on inflated accounts, and a lack of investors' confidence in fabricated financial statements by a large number of companies.
The ICAB members are running over 150 CA firms in Bangladesh.