3. Accounting Environment
3. Accounting Environment
• POS in BD
– FRC
Accounting Environment
Regulations
Institutional Arrangements
• At present, IFAC has 179 member and associate member organizations in 130 countries,
representing more than 2.5 million accountants in public practice, education, government service,
industry, and commerce.
• It has five different boards that set out standards for use in practice, develop professional code of
ethics and devise guidelines for the accountants.
• In September 2013, IOSCO and the IFRS Foundation announced agreement on a set
of protocols to improve consistency in the implementation of IFRS. (The Statement
of Protocols for Cooperation on International Financial Reporting Standards).
• One of the expectations from the member countries of the WTO is that they should
adopt measures to follow global accounting standards (e.g. IFRSs).
• The IMF and the World Bank have recognized international standards
in 12 policy areas, segregated in 3 broad categories, related to their
work.
– One of such category is institutional and market infrastructure where the IMF and the
World Bank recommends IASB’s IFRSs as the acceptable accounting standards.
– Set IFRS compliance as preconditions for financial and technical assistance.
– In frequent interval, World Bank prepare Reports on the Observance of Standards and
Codes (ROSC) which document the compliance status of respective country regarding
standards and codes.
4/30/2025 DMSA, 4201: Accounting Theory & Standards, A&IS, DU 10
Local Bodies
• Bangladesh Securities and Exchange Commission (BSEC)
• Bangladesh Bank
• Institute of Chartered Accountants of Bangladesh (ICAB)
• Institute of Cost and Management Accountants of Bangladesh
(ICMAB)
• As per the Act, Banks are required to prepare and present their financial
statements as per Bangladesh Accounting Standard (BAS) 30 (similar to IAS
30).
• However, IASB issues several other standards (IAS 32, 39 and IFRS 7, 9) for
the recognition, measurement and disclosure of financial instruments, most of
which are relevant for banks and NBFIs of Bangladesh.
• IFAC’s compliance program is supported by the international development community through the
Memorandum of Understanding to Strengthen Accounting and Improve Collaboration (MOSAIC)
program.
• ICAB is also committed in converging with the global accounting and auditing standards.
• Following World Bank’s ROSC and IFAC’s MOSAIC, the audit profession has gone through some
significant reforms in recent years. Major initiatives include-
– twinning arrangement with Institute of Chartered Accountants of England and Wales (ICAEW) for sustained improved
in education and training provided by the ICAB; and
– the establishment of ICAB’s Quality Assurance Division (QAD) requiring each audit firm to be visited once in every 3
years.
– FRC in Australia,
– the Certified Public Accountants and Auditing Oversight Board (CPAAOB) in Japan,
• After couple of failed attempts, Bangladesh entered into the independent POS era in 2016 with the
establishment of FRC under the Financial Reporting Act (FRA) of 2015.
• The FRC shall act as an independent oversight body to bring trust, credit worthiness, transparency
and accountability in the audited reports and financial reporting of the publicly listed companies. For
such, the FRC will regulate the financial reporting process and auditing profession of the country.
• The FRC works through a 12-member body, comprising of representatives from the government, the
Bangladesh Bank, the BSEC, the FBCCI, the academia, and the professional accounting bodies.
• Siddiqui (2018) has identified four key areas of concerns that the
policymakers should consider for future revision-
• Siddiqui, J., Nasreen, T. and Choudhury‐Lema, A. (2009), ‘The audit expectations gap and the role of audit
education: the case of an emerging economy’, Managerial Auditing Journal, Vol. 24 No. 6, pp. 564-583.
https://doi.org/10.1108/02686900910966530
• Siddiqui, J. (2018, February 3), Making Financial Reporting Council functional, The Financial Express,
Retrieved from: https://thefinancialexpress.com.bd/views/making-financial-reporting-council-functional-
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