The country's audit firms have found the act of forgery in financial reporting of different companies and those are also taking advantages through audit.
Speakers at a virtual seminar titled - "Financial Reporting Act 2015 - Roles and Responsibilities of Professional Accountants" - made the remarks on Sunday.
The seminar was organised by The Institute of Chartered Accountants of Bangladesh (ICAB) on Sunday.
"Financial Reporting Act-2015 was formed to curb such irregularities. The law will be implemented soon," the speakers said.
During the virtual seminar, FRC Executive Director Md Sayeed Ahmed said, "Companies are making profits violating the labour rules. But no audit firm raised any question regarding this issue."
"Furthermore, auditors have no heed on cash flow and notes, which is an important part of the reporting," he added.
Sayeed Ahmed also said that audit firms have to be enlisted with Financial Reporting Council (FRC), the regulatory body of chartered accountants of Bangladesh and audit firms, to conduct auditing from now on.
"Though FRC still is not implementing the "Financial Reporting Act-2015" and remains in a flexible condition," he added.
While replying to a query, he said, "A partner should sign the audit paper as a person, not as a firm. So that the partner can be held accountable and punished for any fault and the firm can be saved."
While addressing the programme as chief guest, former FRC chairman CQK Mustaq Ahmed said that development of chartered accountants is the main purpose of FRC.
"For any fault, before giving punishment, a proposal will be submitted in a council meeting, where members from different bodies will be present and they will revise the punishment proposal so that the convicted person gets justice," he added.
He then urged to read the Financial Reporting Act-2015 properly, so that no misconduct happens in the future.
"An auditor has great power and big responsibility at the same time. Through his audit, a company can be destroyed. And again, for any mistake, an audit firm can be finished."
FRC Executive Director Mohiuddin Ahmed said, "We have to change the audit and reporting system. It has several ambiguities. Country's audit system has lost confidence."
"There is a question about audit quality. It has to be addressed and the law will help in this regard," he added.
"In future, firms will have to go through punishment for questionable audits," Moinuddin Ahmed said, adding that FRC is currently in a flexible state to make all stakeholders acquainted with the new law.
M Anwarul Karim, executive director (standard setting) of FRC said, "We are formulating some befitting standard for audit through a thorough analysis and will involve in discussion with the stakeholders to make it more acceptable."
"We have to start the practice of a standard audit system and to make it happen, auditors' knowledge has to be enriched. Audit quality has to be improved," he added.
Muhammad Farooq, president of ICAB; Sabbir Ahmed, vice president and chairman of Technical and Research Committee (TRC) of ICAB; Mahbub Ahmed Siddique, director (technical) of ICAB; M Farhad Hussain, former president of ICAB; and Mohammed Forkan Uddin, vice president of ICAB also spoke at the seminar.