Q.2 Discuss the Accounting Standards used in Bangladesh.

Ans: International accounting standards are practiced in many business establishments of Bangladesh. But many business organizations do not have accounting systems of international standards. The challenge, therefore, is to achieve uniform accounting standards in all or nearly all business organizations in the country. Following its persistent recommendation for strict adherence to the accounting standard, the Institute of Chartered Accountants of Bangladesh (ICAB) produced the Bangladesh Accounting Standards (BAS) manual several years back. But it is not followed, by all the business organizations of the country. It is, however, imperative for the business organizations to adhere to the BAS. The compliance with the BAS should be made mandatory, particularly for the banks and the financial institutions. With a long history of accounting, Bangladesh can, of course, take pride in the quality of many of its accountants, whose competence and professionalism are of global standard. But there are also auditors who do their job poorly or do it out of pecuniary considerations. That is why company prospectuses, to raise resources from the capital market, exaggerate company profiles, prepared by some accounting firms. That is why skewed profit and loss accounts can be presented at annual general meetings. Besides, many otherwise prospective companies fail to go for expansion or other business adjustments just because they do not care to maintain competent accounting departments. The ICAB issues Bangladesh Accounting Standards (BAS). As the professional body of accountants, ICAB regulates its members; however, it has no legal mandate for setting accounting standards. Despite that, ICAB develops and issues BAS, which are not legally binding by corporate management. The ICAB expects its members, who prepare and audit financial statements, to observe the local standards. The ICAB has a standard-setting committee that selects particular IAS as the basis for drafting BAS. The BAS is prepared by adapting IAS to reflect specific local requirements under Bangladesh laws and regulations. The draft BAS is submitted to the Council of the ICAB for discussion, finalization, and adoption. The ICAB issues Bangladesh Standards on Auditing (BSA) to be observed by its members. An ICAB committee sets and issues local auditing standards following the same process as for setting accounting standards. Although BSAs are based on ISAs, no attempt is made to update the local standards when the international standards are revised. Thus, many new ISAs are not yet reflected in BSAs. No implementation guidelines on BSA or ISA exist from ICAB or any other authority, so the approach of interpretation and implementation may differ from auditor to auditor.