Experts at a members’ conference have suggested for strong collaboration between the regulators in banking sector to adjust the requirements between International Financial Reporting Standards (IFRS) and Local Laws and Regulations to repair the gaps while preparing the Financial Statements of Banks in Bangladesh.
They also identified number of differences and deviations from IFRS in notes to Financial Statements of Banks in the areas of Financial Statements components and presentation, cash and cash equivalents, cash flow statement, investment in debt securities - Initial recognition and reclassification, provisioning the loans and advances, recovery against impaired loan, etc.
The observations were made in a Virtual Members’ Conference on "Implementation status of IFRS in Banking Sector in Bangladesh", organized by the Institute of Chartered Accountants of Bangladesh (ICAB) on Saturday.
In case of conflict arises, general understanding is that the local laws from primary regulators would prevail. As a result, there are differences, they observed.
To be fully compliant with IFRS, a cross regulators ‘Task Force’ may be formed who would review and identify the gaps between IFRS, local laws and regulations. The Task Force would also review the new standards, understand implications while engage various regulatory bodies with a view to develop an implementation plan of the standards, they suggested.
As the Chief Guest Kazi Sayedur Rahman, Deputy Governor, Bangladesh Bank said, confidence of local and foreign investors and the depositors of banks and NBFIs are largely depended on the accounting system of a country. If there is any deviation from the International standards specially IFRS, these should be addressed first.
Transparency, accountability and true fair information of financial statements definitely increase the level of confidence where Chartered Accountant are instrumental by maintaining compliance to the standards applicable in accounting, he further said.
Mohammad Shams-Ul Islam, Managing Director & CEO, Agrani Bank Ltd said, to make the accounting language more effective, IFRS plays a pivotal role. Chartered Accountants have the responsibility to ensure the compliance of IFRS in the accounting systems so that it would be accepted by all. Braving the pandemic threats Bangladesh is advancing as one of the fastest growing countries with 305 billion dollars GDP and 43 billion dollars foreign exchange reserve.
ICAB President Muhamudul Hasan Khusru FCA said that Bangladesh Securities and Exchange Commission, Bangladesh Bank, FRC and other regulatory bodies made it compulsory for listed entities, banking companies and other financial institutions to comply IFRS. In some cases, situations arise where IFRS requirements contradict applicable provisions in national laws and regulations, he said.
Mohammad Al Maruf Khan FCA, Partner, Howladar Yunus & Co., Chartered Accountants, presided over the Members’ Conference as the Session Chairman.
Md. Abdul Kader Joaddar FCA, Vice President -ICAB and Managing Director & Chief Financial Officer of Standard Chartered Bank, Bangladesh presented the keynote paper in the Conference while Syed Mahbubur Rahman, Managing Director & CEO, Mutual Trust Bank Limited also spoke.