Trustworthy financial reporting can boost confidence in stocks and motivate investors to pursue market opportunities, said financial experts at the Institute of Chartered Accountants of Bangladesh (ICAB) members' online conference.
ICAB organised the virtual conference titled "Improving Financial Reporting and Quality of Auditing" on Saturday through Zoom.
The purpose of this conference was to exchange views on the challenges, and discuss ways forward, for improving financial reporting and the quality of auditing.
ICAB President Muhammad Farooq delivered the welcoming address and Mahbub Ahmed Siddique, director (Technical) of ICAB, presented the keynote paper.
"Reporting and compliance of corporate governance should be meaningful, effective and collaborative among relevant stakeholders in order to improve the quality of financial reporting and audits in the country," Siddique said.
He pointed out some issues and challenges to improving the quality of audits, such as: corporate governance, family dominated businesses, conflicts of interest, fraud, corruption, minority shareholders, a lack of technical skills, low audit fees, and lack of collaboration among regulators and stakeholders.
The ICAB director said that the independence of preparers, auditors and regulators could improve the quality of audits.
"Regulators should determine the fees of the audit by considering the volume of business and nature of the company," he suggested.
ICAB President Muhammad Farooq said high-quality financial reporting supports well-informed investment decisions, thereby facilitating the efficient formation and deployment of capital.
"So, independent and consistently high-quality audits are an essential tool for trustworthy financial reporting, which brings confidence to stakeholders when pursuing market opportunities," he added.
Farooq also said that as a part of their mandatory inspection programme, ICAB evaluates the quality control system of each firm, maintaining International Federation of Accountants (IFAC) requirements.
"ICAB takes necessary action, if it identifies quality control deficiencies. It even proactively takes action against the firm for any professional misconduct," he stated.
CQK Mustaq Ahmed, chairman of the Financial Reporting Council (FRC), attended the conference as its chief guest, while Professor Dr Shaikh Shamsuddin Ahmed, commissioner of the Bangladesh Securities and Exchange Commission (BSEC), attended as the special guest.
Former ICAB president Muhammed Farhad Hussain acted as the session chairman.