Accounting Profession in Bangladesh : A Critical Perspective

The Early Years of Accounting:

Accounting has evolved, as have medicine, law, and other professions, in response to
the social and economic needs of society. For the most part, early accounting dealt only
with meeting the financial information needs of a relatively few owners of business
enterprises. As business and society became more complex over the years, the
accounting function expanded in order to meet the needs of a variety of interested
parties. The two major users of accounting information may be referred to as internal
users and external users. The management of the entity is an internal user; all other
users, such as investors, creditors, labor, and governmental bodies, are external users of
accounting information.

The different information needs of the various decision makers results in two related,
but different accounting reporting systems. The accounting system used to provide
information to the management of an entity is referred to as managerial accounting.
The accounting system used to provide information to external users is referred to as
financial accounting. It should be pointed out that there is not a complete separation
between the managerial and financial accounting systems. The primary accounting
records are for the preparation of the financial statements, which are directly or
indirectly required by law.

Much of the accounting information for managerial decision making comes from those
records. Moreover, management is responsible for the content of financial accounting
statements. Also, management is obviously concerned about the financial statements,
since these statements are often used to evaluate management. In addition, external
users would probably want to have much of the economic information referred to as
managerial accounting, but such information is not provided externally because it would
be available to competitors; hence it is viewed as confidential information. Finally, the

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term financial accounting is somewhat misleading because all accounting is financial in
that it is stated in monetary terms.

Prospects of Accounting Profession:

Accountants are involved in different levels of management. From simple recording of

transactions to preparation of financial statements and report, to business analysis and
even to controllership, accounting professionals flock the corporate ladder. They
participate in cost efficiency measures, consensus of mergers and acquisitions, total
quality management, development of information systems and tax management.

Future Prospect of Accountants:

 Economic Growth
 Development of Financial Industry
 Market Development of a country
 Role of Accountants in the Future Economic Growth
 Average 6% GDP growth
 Continuous expansion of economy
 Demand for commercial services increases
 Accounting profession benefits from economic expansion

Development of Financial Sector:

 CE emphasizes financial sector
 Supportive governmental actions
 Profits tax cut
 Frequent promotion of different financial services in overseas countries
 Number of enterprises increases
 Demand for accounting service increases Lack of Talent
 Shortage of talents still exists

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  Accountants shift to other sectors
 Big accounting firms absorb a lot of talent
 Small and medium size firms fail to compete for talent
 New accountants fail to fill up vacancies

Different Roles of Accountants:

 Traditional roles
 Auditing
 Accounting
 Tax advice
 Additional Roles
 Management Consultant
 Financial Planner Auditing
 Most profitable field in the past
 Now facing more challenges
 Professional liability risk
 Stricter regulatory system
 Competition and auditing agents
 More complex accounting standards

Accounting Standards:
 Quality services expected
 Strict accounting standards developed
 Development of Small GAAP for SMEs
 Difficult for accountants
 More than one set of standards
 Frequent changes
 Time needed to become familiar with all sets of standards Accounting Service

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Traditional roles of accountants are facing more and more difficulties. Accountants are
relying only on traditional services and would face a diminishing future career. Value
added services are needed to preserve competitiveness. New accountants should focus
on prospective fields

Other Challenges:
 Long working hours
 Accountants in big accounting firms always face long working hours
 Difficult to solve in foreseeable future
 New accountants should be prepared
 Less promotion chance and income in top positions
 Broader scope of knowledge
 Professional knowledge
 Current issues
 Corporate cultural issues
 Communication skills
 Physically and psychologically prepared
 High working pressure
 Long working hours Conclusion
 Accounting profession generally has good prospects in the future
 Risks and challenges are faced by traditional field of accounting services
 New value-added services are key to future success of accountants
 New accountants should be well prepared for the bright career path in the
accounting profession

The Development of International Accounting Standards:

Accompanying the movement to a global economy has been the development of an

international capital market. A U.S. company in need of funds, for example, may seek

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financing in one or more foreign countries, or a foreign company may seek financing in
the United States. Similarly, a U.S. investor may invest in foreign securities, or a foreign
investor may invest in U.S. securities. The movement of capital across borders is sizable.

A major problem that exists relates to differences in accounting principles and practices,
which are peculiar to a particular foreign country in which operations are conducted.
Significant advantages are expected to be achieved if a universally applicable system of
accounting principles were adopted.

“Global Accounting” Phenomenon

The term “global accounting” is often used lately to describe the phenomenon of widely
use of the IAS/IFRS and their adoption by more and more countries and institutions.
Complying with the international standards or preparing domestic standards which
conform with the IAS/IFRS has created a vast area of identical or similar accounting and
financial reporting rules that facilitates the flow of capital and increased investments
thus reducing considerably the costs of converting from one set of rules to another. In
this era of “global finance” and “global markets” the “global accounting” was a must and
a due necessity.

Nevertheless, one can question if the “global accounting” is the right trend for small
countries with mainly small businesses like Bangladesh. A noticeable trade-off between
the cost and benefits of adopting internationally compliable standards has been a field
of debate among practitioners and academics even in Bangladesh. “Global accounting”
is costly especially for small countries like Bangladesh that don’t have an active capital
market that would benefit from better accounting rules and more transparent financial
information. Still we believe that the initial technical difficulties and expensive
requirements will pay off in the long-run future.

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Efforts to Develop Worldwide Accounting Standards:

Most countries recognize the need for more uniform accounting standards. Probably
the best hopes for finding areas of agreement among all the different countries are the
International Accounting Standards Board (IASB) and the International Federation of
Accountants (IFAC). The International Accounting Standards Committee IASC was
formed in 1973 as a result of an agreement by accountancy bodies in Australia, Canada,
France, Germany, Japan, Mexico, the Netherlands, the United Kingdom and Ireland, and
the United States. At the beginning of 2001, the IASC appointed a new International
Accounting Standards Board (IASB) with the responsibility of working toward a single set
of high-quality global accounting standards. The role of the IASB is to contribute to the
development and adoption of accounting principles that are relevant, balanced, and
comparable throughout the world by formulating and publicizing accounting standards
and encouraging their observance in the presentation of financial statements. The IASC
was especially helpful to companies in developing economies that did not have the
financial history or resources to develop accounting standards.

The IFAC, which was formed in 1977 and also consists of most of the world’s
accountancy organizations, fully supports the work of the IASB and recognizes the IASB
as the sole body having responsibility and authority to issue pronouncements on
international accounting standards. The IFAC’s objective is to develop international
guidelines for auditing, ethics, education, and management accounting.

Advantages of Universally Applicable Standards:

The successful development of and convergence toward high-quality internationally

accepted accounting standards will provide direct benefits to auditors, users, preparers
and regulators of financial information and statements. More generally, the availability

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of common and more reliable financial data should facilitate international investment
and reduce the cost of capital worldwide. Accounting costs for multinational firms
operating in different jurisdictions will be reduced with the narrowing and eventual
elimination of national differences. Regulators will benefit from the greater consistency
and quality of information.
Despite this and other benefits that could be achieved by the international
harmonization of accounting practices, those attempting to achieve an
internationalization of accounting standards have encountered numerous barriers.

Barriers to Harmonization:

The most serious barriers to harmonization of accounting standards are

Cultural Differences - Countries differ in economic environment, political structure,

and language. These differences contribute to the diversity in accounting principles
among countries, and this diversity makes it harder to agree on a common set of
principles. An economic environment with a high rate of inflation, for example, may
generate an accounting principle that requires inflation adjustments to the financial
statements, but a country with a low inflation rate may not require such
adjustments. Some political systems place more emphasis on private ownership of
property than do other systems, and this may lead to differences in accounting
principles. The relationship between tax law and accounting principles also differs
among countries. In some countries, financial statements must conform to tax
returns, but in other countries, tax returns and financial statements may differ
significantly. Language differences also create problems in establishing a uniformly
understood set of international accounting principles. Accounting contains many
technical terms and not all languages can easily assimilate the fine points of
technical definitions.

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 Difference in National Principle-Setting Bodies - The nature of the group with
primary responsibility for formulating accounting principles varies from one country
to the next. The group may be a committee in the private sector, or it may be a
governmental body. The group’s membership may consist of accountants only, or it
may be a mix of accountants and non-accountants. A governmental body containing
non-accountants is likely to have a different perspective about appropriate
accounting principles than is a private-sector committee composed of accountants
only.

Nationalism - A strong national principle-setting group, for example, may not want
its role to be only that of advocate for its country’s interests at the international
level. Concerns about compromise and future roles create a tendency in principle-
setting bodies to resist, or slow down, the movement toward international
harmonization of accounting principles.

Legal Enforcement - The IASB has no legal power to establish accounting standards
and therefore must rely on the voluntary actions of member bodies and other
groups to support and enforce its standards.

The road to international harmony is a difficult one. However, there is reason for
optimism because an increasing number of countries are recognizing the
appropriateness of international accounting standards in international trade and
commerce.

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FUTURE OF ACCOUNTANCY IN BANGLADESH

In Bangladesh the profession of accountancy developed during the British colonial

period and is represented by two professional bodies, the Institute of Cost &
Management Accountants of Bangladesh (ICMAB), and the Institute of Chartered
Accountants of Bangladesh (ICAB). The GAAP in Bangladesh are based upon standards
set by the ICAB, which has stated its intention to adopt the International Financial
Reporting Standards As of 2001, 23 such standards had already been adopted, and listed
companies are required to use the IFRS. So the road to international harmony in
accounting practices is paved for Bangladesh.

Since accountancy is a critical component of the infrastructure for the Bangladeshi

market economy, no economically sound activity would be possible without
accountancy. Beyond the information it provides on the financial position and
profitability of operations, it is the foundation of countries' fiscal systems and it plays a
key role in corporate governance. Accountancy is relied on when enforcing prudential
management requirements for banks, insurance companies, securities dealers, and
other market participants. As a result, the accountancy sector is among the most
regulated in the world's advanced economies in terms of its liabilities towards to the
society. Appropriate accountancy can ensure accountability for finances, fairness, and
performances and prescribe way to guarantee good governance by institutionalizing a
powerful accountability structure that holds every public and private sector official
answerable for his or her actions as public or corporate official.

Thus, keeping the importance of accountancy in mind, Bangladesh too has many
accounting jobs to offer. Finance and accounting, along with marketing and sales sector

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employs a large number of people in Bangladesh. The sector of finance is one of the
most developing sectors in Bangladesh at present. Due to its stable economic growth, a
large number of accounting and financial organizations are opening and have opened its
branches in Bangladesh. Presently due to the stable condition of this sector, Bangladesh
government is trying to improve pays and perks for this sector specially. Along with this
a large number of private organizations have come up now.
So there accounting jobs available in four main categories: public accounting,
management accounting, government accounting and internal auditing.

Public Accounting:

Public accounting jobs offer the broadest and most varied type of accounting tasks.
Public accountants practice bookkeeping, financial analysis and account management
services for their clients, whether they are individuals, private businesses, public firms,
government agencies or not-for-profit organizations. A public accounting business can
be one accountant, a partnership involving two or more accountants, or a firm
containing hundreds of accountants.
The duties carried out by the various types of public accountants range from simple tax
preparation and advice, to consultations in the areas of employee compensation and
accounting system design. Some public accountants are involved in external auditing,
where they audit their clients' financial records to ensure statements have been
handled properly, reporting their findings to investors and authorities. These
accountants primarily look at historical financial data, discovering problems or errors in
retrospect.

Management Accounting:

Management accountants are also known as private accountants, or cost, industrial or

corporate accountants. Rather than offering their services to the general public, this
type of accountant is employed by a business or agency for the purpose of recording

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and analyzing the company's financial data. The accountant uses this data to carry out
tasks such as asset management, budgeting, performance evaluation and cost
management. They are often involved in budgeting for the release of new products, as
well as in preparing financial data for investors and tax authorities. As opposed to public
accountants, management accountants primarily look at past and current data in order
to plan for the future.

Certified Public Accountants can be employed by the private sector in positions such as
Chief Financial Officer (CFO) or CEO, provided they are fully skilled in business practice.

Government Accounting:

Government accounting is a form of public accounting, applied to government agencies

and private businesses that are subject to government regulations. Accountants in this
field perform public accounting duties for these agencies, making sure revenues and
expenditures are carried out according to law. Accountants employed by the Federal
Government can be part of the IRS or can be involved in budgeting and government
asset management.

Internal Auditing:

Internal auditing accountants review their company or firm's financial management

practices, checking for mismanagement, fraud and waste. They evaluate the company's
budgeting and management systems and operations for performance, efficiency, and
compliance to laws and regulations. Under this designation, internal auditing
accountants may specialize in areas such as information technology auditing,
compliance auditing or environmental auditing. Some of the posts offered to carry out
accounting and finance jobs in Bangladesh are as follows:

 Business development manager

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  Financial sales consultants
 Financial controller
 Book keeper
 Bank official
 Management accountant
 Manager (internal audit)
 Financial consultant (mortgage)
 General manager (finance)
 Senior accounts officer
 Commercial executive
 Share manager
 Management trainee officer
 Social mobilizer
 Director/Deputy director (finance)
 Audit officer
 Accountant
 Credit inspector
 Cost accountant
 Finance and administration assistant
 Assistant financial controller

Qualifications:
The job seeker must be from the commerce background. The candidate must be an M.
Com/ MBA (Accounting/Finance)/ACA/ FCA/ ACMA/ FCMA/. Candidates should also
have people management skills, should be able to work along with other departments in
the organization, must have time management /prioritization skills, must have the
knowledge of advanced ERP. In case of some posts, the employee will have to prepare
monthly cash flow records and also have to manage the working capital. The job seeker
must also be able to review the balance sheet and should be able to prepare various

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monthly financial reporting schedules. The candidate should also have good knowledge
of computers and should have good communication skills, both oral and written.

Work Experience:

Work experience required for finance and accounting jobs in Bangladesh is at least 2-3
years. For higher posts substantial experience is required. Some companies even
demand up to 10 -12 years of experience. The applicants should have the experience in
accounts, finance, audit, tax which includes VAT, customs duty, income tax etc.

Working Hours:

Nothing is mentioned about the working hours for the finance and accounting jobs in
Bangladesh. All the jobs in this sector are full time jobs.

Pay Scale:

The pay scale for finance and accounting jobs in Bangladesh are not specified but they
are according to the industry standards and also depend upon the qualification and
experience of the job seeker.

Chartered Accountancy:
Aside from these posts, Chartered Accountancy (CA) has emerged as a unique
profession of capital importance and is now discussed at various economic seminars,
capital markets, investments and such other forums. To cope with the increasing
demand in the field of economy, innovative financial instruments are being constantly
introduced and the profession world-wide, apart from accounting, taxation, financial
management and other financial consultancy is in the forefront in launching these
financial products. The qualification of a Chartered Accountant is being increasingly

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acclaimed as the “best” professional qualification in this millennium of free market
economy and globalization of trade and services. Education and training system of
Chartered Accountants is such that after qualifying, a Chartered Accountant may go for
public practice either on his/her own or in partnership with other Chartered
Accountant(s) or he/she may go for employment in trade, commerce, industry, finance,
etc.
 
In today’s free globalized world, Chartered Accountants are  in public  practice, in all
sizes of accounting firm from sole practitioners to  affiliates of large international firms.
They are also employed in industries, finance and commerce playing a wide variety of
financial, management and senior policy making roles both at home and abroad. The
members of the Institute of Chartered Accountants of Bangladesh are known as the
Chartered Accountants of Bangladesh.

The objectives of Chartered Accountancy in the national level are:

 Regulates the accounting Profession and matters concerned there with in the

country
 Administers its members and students
 Ensures sound professional ethics and code of conduct by its members
 Provides specialized training and professional expertise in Accounting, Auditing,
Taxation, Corporate Laws, Management Consultancy, Information Technology
and related subjects
 Imparts Mandatory continuing Professional Education (CPE) to its members
 Fosters acceptance and observance of International Accounting Standards
(IAS)and International Standards on Auditing (ISA)and adopt IAS & ISA in
Bangladesh as Bangladesh Accounting Standards(BAS)and Bangladesh 
Standards  on Auditing (BSA) respectively

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  Keeps abreast of latest developments in Accounting techniques, Audit
methodology, Information   technology, Management consultancy and
related fields
 Liaises with regional and international organizations to influence the
development of efficient capital markets and international trade in services.

Benefits of being a Chartered Accountant:

A Chartered Accountant is a Professional who is trained in and possesses the expertise

to perform the various types of work such as Accounting, Taxation, Auditing, Financial
Management, Project Appraisal, MIS, IT, Computer Auditing, Consultancy etc.  In certain
areas, like audit, they have the monopoly.
 
The practicing Chartered Accountants mainly carry out audit, inter alia, of financial
statements of various enterprises/organizations as Public Accountants under the
banners of approved Chartered Accountant Firms.
 
Chartered Accountants engaged in public practice mainly carry out the following
functions:

  Perform professional services involving auditing or verification of financial

transactions, books, accounts or records, or preparation, verification or
certification of financial, accounting and related statements;
 Render professional services or assistance in or about matters of principles or
details relating to accounting procedures, costing techniques, or recording,
presentation or certification of financial facts or data;
  Render professional services or assistance as Management Consultant in or
about matters of accounting methods, systems and techniques involving

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 forecasting, in order to assist management in its task of formulating policies,
programs, management systems and procedures for maintaining and improving
efficiency. Management Consultancy services encompass, inter alia, the
following areas:
 Valuation of business and shares
  Designing of accounting, internal control and operational systems for
organization. Rendering of services like maintaining computerized financial
accounts of companies, business process re-engineering, management selection
and recruitment, disinvestment of government enterprises, etc.

Apart from these CA Firms are also engaged in:

1. Taxation services
2. Business Information System (BIS)
3. Statutory and Liquidation services, etc.

Many positions of trust and responsibility are open to a Chartered Accountant such as
Chief Executive, Member Finance, Finance Director, Company Secretary, Chief
Accountant, Finance Controller, Systems Analyst, Internal Auditor, Accountant, etc. in
Listed Companies, Corporations/ Autonomous bodies or in industrial, financial,
commercial or educational enterprises.
 
A Chartered Accountant can also serve on the Board of Directors of various
organizations, particularly financial institutions. Such positions of responsibility, trust,
honour and dignity are offered to Chartered Accountants because of their excellent
educational & training background, professional know-how & technical expertise and
sound financial knowledge & experience, enable them to contribute towards solving
accounting, financial, educational and business problems at top levels.

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Linkage to International bodies:

The Institute is a permanent active member of several International and Regional

Accounting Bodies like:

 International Federation of Accountants (IFAC), the apex body of the accounting

profession in the world and sole authority for adoption and implementation of
Auditing Standards Ethics etc.
 International Accounting Standards Committee (IASC),the sole custodian for
adoption and implementation of Uniform Accounting Standards for member
countries
 Founder member of South Asian Federation of Accountants (SAFA), the Regional
Accounting Organization of South Asia
 Confederation of Asian and Pacific Accountants (CAPA)
 International Accounting Standards Boards (IASB)

Moreover, the Institute has to make liaison with various government agencies, local and
international Chamber Bodies and business houses.

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Career Prospects in Comparison with other Professions:

CA is an internationally relevant and accessible qualification – a go-anywhere passport

to a successful career. In an age of growing globalization and intensified competition,
modern business demands timely and accurate financial information. That is why CAs’
are sought after by companies across the world. They are commercial business
managers with wide-ranging skills. With this globalization, the world economic scenario
is rapidly evolving. Innovative financial instruments are being constantly introduced in
the twenty first century, and the Chartered Accountancy (CA) Profession world-wide is
in the forefront in launching these financial products. Chartered Accountancy (CA) has
emerged as a unique profession of paramount importance. Anybody will find Chartered
Accountancy as a satisfying and rewarding profession. Apart from exciting opportunities
and attractive pay-packages, Chartered Accountancy qualification is recognized
internationally, and its reputation and value are maintained through high standards of
assessment and regulation. It is the professional qualification of choice for businesses
worldwide.
 
The profession of Chartered Accountancy is looked upon with great honour and dignity.
Chartered Accountants have developed this over the years through sincerity, devotion,
and integrity. Business promoters and owners cannot deal with every detail of their
business. The People they employ to conduct their business do a lot of things on each of
those where they cannot lay their finger tips. Promoters and owners engage Public
Accountants to let them know net results of their business activities and repose full
confidence in Public Accountants to dig out truths, where necessary.
 
Due to the increasing demand for their services, the average earnings/remuneration
packages of Chartered Accountants have also steadily increased in recent past. Hence a
student, on successful completion of examinations and training, could look forward to a
comfortable compensation package.

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Today’s world is governed by commerce and trade. Only the Chartered Accountants can
control the matters related to commerce and trade. So there is an increasing demand of
Chartered Accountants worldwide. And that is why the Chartered Accountancy is best
among all other professions.

 Chartered Accountancy in Bangladesh:

In Bangladesh where resources are limited, support of the government for starting an
activity at national level is greatly needed. Government of Bangladesh has given total
support to the development of accounting profession in the country. Policy makers of
the country are taking keen interest in the activities of the profession.
 
Chartered Accountancy is the most lucrative and remunerative job, not only in
Bangladesh but, over the world. ICAB is the only organization to train the most
prestigious professionals and to regulate Chartered Accountancy profession in the
country. During the year 2007-2008, the Institute granted registration to 1257 students
for Article ship, 1064 students completed their Article ship training and 28 Articled
Students discontinued Article ship due to various reasons. In the second half of 2008,
614 students were registered for Article ship with the Institute.
 
Though it is apparent that the path for accomplishment of the C.A. qualification is not an
easy task, but with the unique combination of rich inputs and active processes in a
supportive environment has been made by ICAB, the results is now well worth your
endeavors and CA profession has become preferential one day by day. ICAB has now
grown to a membership size of 914 of which 662 are Fellow Members and the rest 252
are Associate Members.

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Females are also playing a vital role as Chartered Accountants in Bangladesh and taking
leading role gradually to become co-partner of the profession. ICAB has 26 female
members (as on 18 February 2009) who are occupying the high ranking positions in CA
firms, NGOs  and international organizations like, the World Bank. Female students are
increasing tremendously and are becoming matured adequately. ICAB wishes to have
many more qualified (and part-qualified) female Chartered Accountants in the near
future.

Significance of the ACCA:

As our research shows, the prospects of Chartered Accountancy jobs in Bangladesh

appears promising as our country is one of ACCA’s (Association of Certified Chartered
Accountants) fastest-growing markets – and not surprisingly, given a population of
around 150 million, all keen for their country to grow and succeed. The ACCA increases
employability and buoys up the chances of job availability as ACCA students benefit
from the flexible range of entry points meaning they can begin at the right level for
them, and then progress through the awards. And when it comes to flexibility, they can
complete qualifications in their own time, selecting those which best suit their own
career needs and aspirations. ACCA says the practical content means that the
knowledge the students gain is directly applied to the workplace, offering immediate
benefits to existing and prospective employers.

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Conclusion:

Hence, in the light of our research, we are happy to conclude that the accountancy job
prospects in our country are very bright and worthwhile to be pursued. With so many
different kinds of jobs and the need for accountancy in every sector, plus the quality
education and training available to be adept in accountancy, make the accounting job
outlook blooming, both in national and international levels. And the rosy future of
accountants does not look as though it would lack luster any time soon.

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