The securities regulator has issued a directive making it compulsory for market intermediaries to choose auditors from the auditor panel for higher accountability.
All issuer companies have already been bound to hire auditors from a list of auditors made by the Bangladesh Securities and Exchange commission (BSEC).
There were allegations in the past that some audit firms endorsed faulty financial statements without proper verification and by presenting misleading information.
“The securities regulator wants to bring transparency and accountability in the stock market, which is why it took this decision,” said Mohammad Rezaul Karim, BSEC spokesperson and executive director.
Mr Karim said the move would improve accountability and transparency in the market and would protect investors.
According to the directive issued on Wednesday, stock brokers and stock dealers, clearing and settlement companies, merchant bankers, portfolio managers, asset managers, fund managers, custodians, credit rating companies, mutual funds and alternative investment funds are required to choose auditors from the auditor panel.
The BSEC will take punitive actions against auditors if they commit any irregularities.
“If the audited financial statements do not reflect the true state of affairs of the issuer and the financial statements are deficient in form or contents for which the auditor firms concerned are liable, the commission may declare them ineligible for acting as an auditor of any issuer of a listed security for a period not exceeding five years,” reads the directive.
The BSEC will first forward the case to the Financial Reporting Council (FRC). The FRC is basically the authority to punish errant auditors.
If the securities regulator feels the FRC punishment is not enough, it itself will penalize the auditor.
The punishment will be up to five years’ ban from auditing registered entities.
The securities regulator formed a panel of eligible auditors in 2016 to audit financial statements of the listed companies and the companies that submit IPO proposals to ensure transparency. The panel is revised from time to time.
Currently, there are 44 eligible audit firms in the panel for auditing listed and non-listed companies.
source: https://thefinancialexpress.com.bd/stock/bangladesh/stocks-open-higher-amid-thin-trading
