Due to absence of automation, there is a lack of transparency in the country’s financial sector which ultimately indulge corruption. Document Verification System (DVS) will definitely help to bring the financial discipline in the country, said Abu Hena Md. RahmatulMuneem,Senior Secretary, Internal Resources Division (IRD) & Chairman, NBR on Thursday.
He was addressing as chief guest at the virtual members’ conference on Document Verification System and Authenticity of Audited Financial Statements” organized by the Institute of Chartered Accountants of Bangladesh (ICAB).
DVS is an application under which a document verification code (DVC) will be automatically generated by the system after the submission of some specific information in the system by the auditor.It can be viewed by the Government Agencies, different stakeholders and Regulators like Bangladesh Bank, FRC, BSEC, IDRA, etc. covered under MOU or any framework with the Institute.
“We have the moral obligation to bring transparency in the society, otherwise we shall fall lag behind. NBR and ICAB are jointly working to develop the DVS to address the issue”RahmatulMuneem also said.
He hoped that once the system is developed, the level of financial crimes will be reduced.
ICAB President Muhammad Farooq FCA said, all the companies registered with RJSC must be audited by CA firms. ‘We have found that there is a big mismatch among the data of ICAB, NBR and RJSC in relation to number of companies audited by practicing members, number of annual returns submitted with RJSC and number of corporate TIN holders’, he said.
This mismatch pointed fingers to the evidences of fraud audited financial statements and/or evasion of tax escaping themselves from tax net, he added.
‘Auditor has to maintain confidentiality of the information of the clients. Auditor can share noncompliance issues with the respective regulator if management fail to resolve’, he informed. So, disclosing clients’ data in the DVS may create legal challenges, he added.
NBR may include this provision through issuing an SRO and later it should be included in the income tax law, he suggested.
The National Board of Revenue (NBR) recently has formed a Taskforce headed by MdShabbir Ahmed, Director, Central Intelligence Cell. The main tasks of the Taskforce are to identify the unscrupulous organizations who submit unauthentic audited financial statements to evade taxes and the way forward to ensure submission of unauthentic financial reports to Department of Taxes of NBR, to identify the companies and organizations do not register with the Registrar of Joint Stock Companies (RJSC) and submit no tax return.
ICAB Vice President MuhammedForkanUddin FCA presented keynote paper in the conference and explained the importance of DVS to curb down such malpractices. He said, DVS will protect multiple Audited Financial Statements of a particular company and tempering Audited Financial Statements. He also explained some technical parts of the system.
Md. AlamgirHossain, Member (Tax Policy), National Board of Revenue (NBR) graced the Conference as the Special Guest. Md. HumayunKabir FCA, Member Council and Chairman of Taxation and Corporate Laws Committee, ICAB presided over the conference as the Session Chairman.
Besides ICAB members, about 500 tax officials of NBR joined the conference.