No bank can have the export subsidies it disburses audited by the same external auditor for more than three years, according to a Bangladesh Bank circular issued on Tuesday.
There are already instructions that an external auditor cannot audit a bank's balance sheet for more than three years in a row. But there were no guidelines on whether an organisation could work for more than three years to audit cash assistance or export subsidies disbursed by the bank. The circular was issued to confirm the matter.
The foreign exchange policy department of the Bangladesh Bank issued the circular and sent it to the head offices and principal offices of all the approved dealer banks involved in foreign exchange.
It said an audit firm appointed for three consecutive years for statutory audit or cases of cash assistance or export subsidy cannot be appointed to audit cases of cash assistance or export subsidy in the same bank for the next three years.
Officials of the Bangladesh Bank said that the bank's balance sheet auditing organisation can also audit the cases of export subsidy. However, in most cases, separate audit organisations are appointed to audit export subsidies.
There was no guideline on banning them after three years, and this was confirmed in the circular, they added.