ICAB Journal The Bangladesh Accountant January - March 2021

THE BANGLADESH January - March 2021
LDC Graduation of Bangladesh: Challenges and Opportunities

January - March 2021
LDC GRADUATION
OF BANGLADESH:
CHALLENGES AND OPPORTUNITIES
The Bangladesh Accountant
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JANUARY - MARCH 2021 | The Bangladesh Accountant 1

ICAB PUBLICATIONS P7
ICAB publications include, inter
alia, a quarterly journal titled 'The
Bangladesh Accountant' and
ICAB’s mouthpiece ICAB Monthly
News Bulletin.
In the quarterly journal, articles of

ICAB Members, Members from
other Accountancy bodies,
Academics and Business Leaders
from home and abroad are
published.
The monthly news bulletin
Contents
publishes different ICAB events of
the month. This bulletin acts as an
information hub for the Members
to keep up to date what is
happening in and around ICAB. January - March 2021
In addition to these two regular
publications, ICAB also publishes
books, monographs, booklets and
Students’ Study Manuals
regularly.
P4 Editorial P8 LDC Graduation of Bangladesh:
Challenges and Opportunities
Shubhashish Bose
P5 President’s Desk
P13 Challenges Faced by Banks
and Non-Bank Financial
Institutions in Bangladesh:
From Analytics to Applications
M Jalal Hussain FCA
P21 World Countries:

Paradox of Wealth, GDP &
Debt per Capita
P25 Macro-Economic Aspects:

National Budget 2021-22
and Expectations
Compilation by Abu Taher
P31 Forensic Accounting Education:

A Brief Discussion on
Existing Literature
1
Dewan Mahboob Hossain
2
Md. Saiful Alam
3
Al Amin
for more details, please visit
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2 JANUARY - MARCH 2021 | The Bangladesh Accountant

Digital Highlights
www.icab.org.bd
P42 Audit Reporting Trend News & Events

in Bangladesh:
Circular & Notice
Opportunities and Challenges
Dr. Mohammad Istiaq News Bulletin
Azim CA, CPA, CMA
Journal
P48 In the Digitalized Business

World the Implication of using
Automation Spectrum
in the Internal Audit Practices
S.M. Rafiqul Islam FCA
P53 A Snapshot of some Trends in

Corporate Governance in
South Asia in Reference
with Bangladesh
Arif Hossain FCA

Editorial
“fromGraduating
the LDC
I t is understandable that the nature
of this pandemic has offset our
living style and livelihood. It is not
category is, in
becoming easy to adapt with the
new normal. Many people have lost
reality, a their priority. It is of no wonder that
commendation such reflection is also observed in
contribution of articles or write-up
from the for the journal like ours. Under the
international given circumstances, publication of
community for 4 (four) Issues in a year is not

without challenges.
Bangladesh’s
achievements However, I am happy that the
Jan-March 2021 issue has been
in growth and published with the theme “LDC
development, Graduation- Opportunities and
which in turn
Challenges”. I am sure, readers will
have comprehensive reality, Bangladesh would need to
would boost understanding about the subject. undertake a significant amount of
the confidence Graduating from the LDC category
is, in reality, a commendation from
structural and policy reforms.
of global the international community for Apart from the theme article, this
financiers. Bangladesh’s achievements in issue has articles on Challenges
Countries that growth and development, which in
turn would boost the confidence of
Faced by Banks and Non-Bank
Financial Institutions in Bangladesh,
have global financiers. Countries that Forensic Accounting Education,
graduated have graduated previously have
experienced a higher flow of FDI.
Audit Reporting Trend in
previously
Bangladesh: Opportunities and
However, these opportunities are Challenges, the Implication of Using
have not without challenges. We must Automation Spectrum in the internal
experienced a have proper strategy to reap the
benefit of this important
Audit Practices, which among others
will be worthy to read.
higher flow of recognition.
FDI. ” Preparation and actualization of a
I thank all the contributors and
reviewers of this issue for their
coherent and cogent transition support which made it possible to
strategy for LDC graduation would bring out this issue of Journal. I also
need significant effort. The thank our esteemed readers for their
graduation may not diminish the attachments which encourages us to
flow of foreign aid abruptly and the bring out this publication at regular
Dr. Md. Abu Sayed domestic tax collection, rather, is intervals.
Khan FCA expected to increase significantly.
Chairman – Editorial Board For all these potentials to turn into With best wishes to all..
Council Member - ICAB

President’s Desk
“gloomy
Despite I extend my heartfelt thanks to the
Editorial Board for their
appreciable efforts to bring out this
environment publication under the theme “LDC
Graduation of
precipitated by Bangladesh-Challenges and
the opportunities”. Also thanks to the
contributors who has put their
unprecedented thoughts and acumen in their
pandemic write-ups published in the journal.
Needless to say, ‘The Bangladesh
which has Accountant’ is manifestation of our
almost forced commitment towards addressing
the core issues of trade, finance and
the global economy.
economy to its Despite the hindrance caused by
knees, the pandemic, our endeavour
towards professional development
Bangladesh is is ceaseless. Keeping the limitation Bangladesh's branding to global
still of Covid-19 pandemic in mind, we
are continuing our activities
investors and others.” The country is
now well placed to strive for a
maintaining through digital platform. A large poverty free and advanced
upward trend number of Members’ Conferences,
Trainings, webinars are already held
economy by 2041. The challenges
are steep but not impossible.
in different through Zoom Apps. The large
indexes like scale participation of our members
and stakeholders in these events
Despite gloomy environment
precipitated by the unprecedented
Income per are truly inspiring. pandemic which has almost forced
capita, Human Turning to the theme of this issue
the global economy to its knees,
Bangladesh is still maintaining
Assets Index of Journal, we are at a time when upward trend in different indexes
(HAI), and
Bangladesh marks 50 years of its like Income per capita, Human
independence, the United Nations’ Assets Index (HAI), and Economic
Economic and announcement of graduating and Environmental Vulnerability
Environmental
Bangladesh to a “developing Index (EVI).
country” from a “least-developed
Vulnerability country” has added a time-befitting However, alongside
opportunities, there will be new
the
Index (EVI).”
dimension to the milestone
celebration. The UN General challenges for the country,
Assembly is scheduled to approve especially in the export market, due
the proposal in September this to the diminished trade benefits. To
year. tackle the challenges, Bangladesh
has to come out of the preferential
According to Prof Mostafizur market driven competitiveness and
Rahman, distinguished fellow at enter productivity driven
Mahmudul Hasan Centre for Policy Dialogue (CPD), competitiveness.
Khusru FCA “The recognition will bring new
President-ICAB opportunities and enhance Bangladesh also has to focus on

“recognition
The
is
a milestone
for
Bangladesh,
but the work
is not finished
with that
achievement.
If we become compliance, keeping aside
flexibility as it will step into being a
lifted after 2026. If we can conduct
appropriate economic diplomacy,
complacent, developing country. We need we can extend the duration of this
preparations for negotiations to preparation period even longer.
the result of retain the trade facilities and devise
The recognition is a milestone for
the new ways to start new deals with
trading partners. Bangladesh, but the work is not
recognition It should be kept in mind that the
finished with that achievement. If we
become complacent, the result of
may not be privileges we used to get as an LDC the recognition may not be
in copyright, patent, ICT, and favourable.
favourable.” service sectors might no longer be
available to us after the graduation. More so, there is nothing to be
Foreign investors are certainly complacent about it as the global
paying attention to this growing surge of COVID infections is not
domestic market in Bangladesh as over. We must follow precautionary
well. So, the business of new health rules as strictly as desired as
technology-based products will we see infections increase lately
increase in our domestic market. here following the worst sufferings
of one of our neighbouring country.
After the graduation, international However, we hope surely the days
trade will be more competitive. To ahead will be on our side.
compete with foreign competitors,
Bangladesh will have to make major To conclude, I congratulate
changes in its import-export everyone associated with the
policies. Our factories need to be publication of the journal. I hope the
more environment and readers will be benefitted going
labour-friendly. In the changed through the articles published in the
situation, economic diplomacy has journal.
to be more efficient than ever. After I wish good health and happiness for
the transition, we may lose some of everyone.
the ongoing benefits. The tariff
benefits that we now enjoy may be

www.icab.org.bd
facebook.com/ca.bangladesh
ARTICLES
The Bangladesh Accountant | January - March 2021
LDC Graduation of Bangladesh:
Shubhashish Bose
I
ntroduction Bangladesh was listed as a least
developed country in 1975.
The United Nations held
the first conference on the Least LDCs are low income countries
Developed Countries (LDC) in confronting severe structural
1981 to highlight LDCs special impediments to sustainable
economic needs and to development. They are highly
generate international attention vulnerable to economic and
for socio-economic environmental shocks and have
development of the LDCs. Since low levels of human assets. The
then, the UN has been holding identification of LDCs is
Conference on LDCs in every 10 currently based on G.N.I per
years, progressively adopting a capita Human Asset Index and
Progamme of Action for next Economic vulnerability to
decade. The last Conference on external shocks.
LDCs (LDC-IV) was held in
Istanbul in 2011 and the Istanbul
LDC Criteria
The Author is
Chief Executive Officer Programme of Action (IP0A) The identification of LDCs is
of the Institute of was adopted for the period of currently based on three
Chartered Accountants of 2011–2020. criteria: per capita gross
Bangladesh (ICAB) national income (GNI), human
The overarching goal of the assets and economic
IPOA is to overcome the vulnerability to external shocks.
structural challenges faced by The latter two are measured by
the LDCs in order to eradicate two indices of structural
poverty and achieve impediments, namely the
internationally agreed human assets index and the
development goals. It economic vulnerability index:
specifically aims to enable half
of the LDCs to meet the criteria • Income criterion, based on a
for graduation within the period three-year average estimate
of 2011-2020. As Bangladesh is of GNI per capita, based on
an LDC, this IPoA has big the World Bank Atlas
relevance to our journey toward Method (under $1,035 for
the developing status. inclusion, above $ 1,242 for
graduation as applied in the
The Committee for 2015 triennial review)
Development Policy (CDP), a • Human Assets Index (HAI)
subsidiary body of the UN based on indicators of: (a)
Economic and Social Council, is nutrition: percentage of
mandated to review the population undernourished;
category of LDCs every three (b) health: mortality rate for
years and monitor their children aged five years or
progress after graduation from under; (c) education: the
the category. gross secondary school
enrolment ratio; and (d)
The concept of LDCs originated adult literacy rate.
in the late 1960s and the first
group of LDCs was listed by the • Economic Vulnerability
UN in its resolution 2768 (XXVI) Index (EVI) based on
of 18 November 1971. indicators of: (a) population

ARTICLE
size; (b) remoteness; (C) The reviews were held in 2015 chance to be recommended for
merchandise export and 2018. graduation at the triennial
concentration; (d) share of review in 2021.
agriculture, forestry and At the request of the
fisheries; (e) share of Government of Bangladesh, the It was also mentioned that if
population in low elevated Secretariat of the Committee for Bangladesh attained any two
coastal zones; (f) instability Development Policy (CDP) criteria, for example, EVI and
of exports of goods and travelled to Dhaka from 9 to 12 HAI in 2021, Bangladesh would
services; (g) victims of October 2017 to discuss our go up the developing country
natural disasters; and (h) potential graduation preparation status in 2024 after having
instability of agricultural from the LDC category. The additional three years’ transition
production. Secretariat of the CDP met with period. However, some of the
officials from various Ministries, LDC-specific facilities may
The Committee for the Bureau of Statistics and the remain available for another
Development Policy (CDP), a Prime Minister's Office, as well three years till 2027. Accordingly
subsidiary body of the UN as with representatives from the Bangladesh attained all three
Economic and Social Council, is private sector. criteria again in 2021 and was
mandated to review the recognised to be a developing
category of LDCs every three According to its preliminary economy.
years and monitor their calculations, the CDP
progress after graduation from Secretariat indicated that Because of the pandemic
the category. If the two Bangladesh would, for the first situation faced by Bangladesh,
consecutive triennial reviews time, meet the threshold for specially the impact of it on the
meet the threshold of at least graduation at the next triennial economy, the Govt. of
two of the three criteria, then a review which was to be held in Bangladesh requested the
country can normally qualify for March 2018. Therefore, UNCDP to extend the transition
graduation from the LDC status. Bangladesh might have good period for five years in place of
The review result for Bangladesh done in 2015 marked remarkable progress and stood as follows:
Criteria Threshold Progress Target

Per Capita Income Average of US$ 1,242 US$ 1,190 Not achieved
From 2011 to 2013
Economic Vulnerability Index (EVI) 32 or below 25.1 Achieved
Human Asset Index (HAI) 66 or above 63.8 Not achieved
Source: CDP, UN
It is evident from the above table, Bangladesh attained the economic vulnerability index (EVI) with the score
of 25.1 against the required threshold of 32. Again for the second time, Bangladesh attained all the eligibility
criteria at a time in 2018 which are tabled below:
Criteria Threshold Bangladesh’s Score

GNI Per Capita US$ 1,2 30 or above US$ 1, 274
Economic Vulnerability Index (EVI) 32 or below 25.2
Human Asset Index (HAI) 66 or above 73.2

Bangladesh Profile: UNCDP’S

Review (2021)
Criteria Threshold Bangladesh Score
GNI Per Capita Average of US$ 1,230 or above US$ 1,827
Economic Vulnerability Index (EVI) 32 or below 27.27
Human Asset Index (HAI) 66 or above 75.33
the three years for sustainability LDCs, which include: • increased flexibility for
purpose. LDCs in rules and disciplines
• Duty-free & quota-free governing trade measures;
Special Facilities for (DFQF) market access
LDCs facilities; • extension of longer
transitional periods to LDCs;
All LDCs, including Bangladesh, • GSP facilities; and
are entitled to enjoying some
differential and preferential • Special market access • provision of technical
facilities in the area of facilities for LDC members assistance.
international trade, in various RTAs (Regional
development assistance, Trade Agreements), like Trade-related capacity-
including development SAFTA, APTA; and building
financing and technical
cooperation; and in general • Preferential market access An important initiative in
support and other forms of for trade in services under support of the LDCs is the
assistance. LDC Services Waiver. Enhanced Integrated
Framework (EIF), the successor
Among the preferential facilities, Special and Differential of the Integrated Framework
Special and Differential Treatment under WTO (IF). The EIF is a multi-donor
Treatments for LDCs under the Agreements programme which supports
WTO agreements are the most LDCs to increase their
important given our export-led In the WTO system and participation in the international
economy. Under these, LDCs Agreements, out of 140 Special trading system. It focuses on
enjoy preferential market access and Differential Treatments three main activities, viz.,
including special and differential (S&DTS) that are available for mainstreaming trade into
treatment from some WTO developing countries and LDCs, national development
obligations (other than 15 are exclusively for LDCs. strategies; setting up structures
preferential market access), and These S&DTs can be grouped needed to coordinate the
trade-related capacity-building. into five main categories: delivery of trade-related
technical assistance; and
Preferential market access for • increased market access;
building capacity to trade,
goods and services including addressing critical
• safeguarding of the
Various preferential market interests of LDCs; supply-side constraints.
access facilities are available for

ARTICLE
through FTA/RTAs with

potential trading partners.
Currently, our capacity for
negotiating FTA/RTA is not
competitive and initiatives
are underway to further
develop human resource in
the Ministry of Commerce
and relevant organizations.
Bangladesh is considering
FTAs with a number of
developing countries. FTA
with those countries may
create additional
opportunities for
Bangladesh, and help
minimize negative impacts
on exports;
Possible Impact on Possible Alternatives and
Bangladesh's Export Way Forward • Diversifying the products
and markets are ongoing
Currently Bangladesh has been Ministry of commerce is fully process agenda to add up
enjoying DFQF facilities in all aware of the situation; and to with around 744 items of
developed countries except the face the post-LDC challenges products, which we have
USA. However, the greatest and to minimize the negative been exporting at present;
benefit comes from the EU impacts on trade, it has already
market. Along with developed started exploratory work on the • Exploring the untapped
countries, many developing alternatives including through potentials where structural
countries, including India, China, enhancing overall trade-related constraints, either at
South Korea also provided capacity. Possible slate of production level or in the
DFQF market access to LDCs, actions under active area of management of
including Bangladesh, for a wide consideration include the compliance requirements,
range of products. Among the following, among others: are hindering the growth.
developing countries, India has For example, the leather
provided DFQF market access • Getting GSP+ facility from
sector needs various
to Bangladesh for all products the EU GSP, when EBA
supports, particularly for
except drug and tobacco under (Everything but Arms)
cleaner, higher value added
SAFTA. As such, around 70% of facilities will not be
production through waste
Bangladesh's export is done available. It may be
and effluent treatment.
under the DFQF facilities. mentioned that under the
Transformation has already
GSP+, EU provides
started and it may be
After graduation from the LDC duty-free facilities to 66% of
mentioned that industry is
status, Bangladesh will no total products. However, for
moving from Original
longer be entitled to availing the achieving GSP+ status, a
Product Manufacturing
LDC-specific S&DTs, including country needs to fulfill some
(OPM) to Original Design
the DFQF market access requirements including
Manufacturing (ODM);
facilities. As a result, export of ratification of 27
Bangladesh may certainly face International Conventions;
• Adding more value through
some strain, particularly in the
elements of fashion and
EU market. • Enhancing market access of
design in the products,
our products and services

during the phasing out of

Multifibre Arrangement through
Agreement on Textiles and
Clothing proved to be false, with
the reverse result. Bangladesh
successfully steered clear of the
Global financial crisis of
2007-2008 having little or no
impact on Bangladesh's
exports. All these reveal
Bangladesh's capacity and
resilience: of international trade.
Though Bangladesh will face

many challenges, graduation
from the LDC status would be
recognition of efforts of the
Government to make real
development of the economy
and living standards of the
particularly in garment industry; and last but not people. Becoming a developing
products can significantly limited to country from an LDC will
contribute to product definitely enhance the country's
diversification. In this • Encouraging the linkage image, which in turn will
context, greater emphasis industries as a part of the increase confidence of the
has been given in policy to further the supply global community for doing
establishment of more and value chain. In this business with and investment in
fashion and design regard, the establishment of Bangladesh. However, if
institutes; Special Economic Zones anything comes on the way,
and the Active we'll rewrite our future by sitting
• Raising competitiveness by Pharmaceutical Ingredient with our stakeholders.
increasing productivity and (API) Park may be termed
reducing cost of production; as visionary moves towards Characteristics of
the future;
• Improving business climate
Developing Countries
and trade facilitation system However, the Government is
• High income per capita
are on the card to make ready to explore all possibilities
business more and to address all the issues • Security is guaranteed
cost-efficient; whatever comes on the way.
• Guaranteed Health
• Upgrading the hard and soft Conclusion
business infrastructure is in • Low unemployment Rate
progress for making trade Bangladesh has developed
more competitive; significant trade-related • Mastering Science &
capacity and adaptability. Even Technology of
• Meeting the growing energy withdrawal of the GSP facilities
demand including through by the USA, though made a jolt, • The level of export is higher
cost-efficient and renewable but could not make any big than imports.
energy sources to cater to difference. Many predictions of
the increasing need of the disaster of the RMG sector

ARTICLE
Challenges Faced by Banks and Non-Bank

Financial Institutions in Bangladesh:
M Jalal Hussain FCA
I
ntroduction within the banking and
non-banking systems have
Banks and Non-Bank contributed to high levels of
Financial Institutions (NBFIs) non-performing loans (NPLs),
are a portentous and integral resulting in lack of trust and
part of financial management confidence in this sector. The
systems of a country – rich or recent collapse of Peoples
poor, developed, developing Leasing and Financial Services
and underdeveloped. Limited due to ginormous fraud,
Well-functiong Banks and NBFIs misappropriation and misuse of
are a must for achieving the its funds by the Company’s
most desirable Sustainable management, has shattered the
Development Growth (SDG). economic and financial images
They play a gargantual role in of NBFIs sector by depriving
the economy of Bangladesh by and denuding its deposit
accumulating the savings of the holders from their hard-earned
The Author is a 165 million people in one hand money and lost peoples trust
Fellow Member of the Institute of and on the other hand invest the and confidence in NBFIs.
Chartered Accountants of money in various economic
Bangladesh (ICAB) activities – productive and Banking institutions of
unproductive finacing in Bangladesh are licensed and
industries, export-import controlled under the Bank
services, public finacing, Small Companies Act, 1991 and guided
and Medium Enterprises (SMEs) and supervised by Bangladesh
financing and many more. Bank (BB), the central bank of
Economic and financial sectors Bangladesh. NBFIs are, on the
of the most of the countries of other hand, licensed and
the world including Bangladesh, controlled under Financial
have been drastically sufferring institutions Act 1993 and guided
from devastating COVID-19 and supervised by BB.
Pandemic. Nevertheless, BB is the
regulatory and supervisory
In Bangladesh, financial sectors authority of both Banks and
in general and Banks and NBFIs NBFIs, the Ministry of Finance
in particular, have been facing (MoF) of the government
egregious hardship and exercises noteworthy control
challenges come from COVID-19 over Banks and NBFIs.
Pandemic, opprobrious
world-wide financial and Challenges Arisen from
economic conditions, reduction Double-Standard
of exports and imports, closure Interest Policy
of businesses and industries,
mis-management, intrution of The Banks and NBFIs sectors
corruption and on and on. This are facing calamitous liquidity
financial sector of Bangladesh is crisis of inadequate deposits
undergoing liquidity crunch due to the double standard
owing to a number of demand policy that affected the
and supply side factors. investment in private and public
Alongside, governance issues sector as genuinely commented

by financial experts and 9% and deposit rate of 6% Certificates (NSCs) rates to 11.5
economists. The uniform effective from 1st April 2020 had percent, which are still
lending and deposit rate or 9-6 made it difficult and dicey to get exceptionally higher than other
policy hindered and stymied the deposits from deposit holders deposit rates in the Banks and
deposit collection from the and created hypercritical NBFIs sectors. Government
general depositors and liquidity crisis. borrows from the citizens of
eviscerate the financial stability Bangladesh thorough NSCs.
and strength of Banks and The Finance Ministry has triaged Currently, there are several NSC
NBFIs to a great extent. to the declining trend of interest schemes such as: 5-year
Implementation of government rates in the financial markets, it Bangladesh Sanchayapatra with
policy of uniform lending rate of lowered National Savings an interest rate of 11.28 per cent,
3-monthly Profit Bearing
Sanchayapatra with 11.04 per
Table 4.6 Trends in Weighted Average cent, Family Savings Certificate
with 11.52 per cent interest for
Interest Rates of Scheduled Banks five years, and Pensioner
and their Spreads Sanchayapatra with 11.76 per
cent rate of interest. Due to
as of end June (percent) uneven interest rate, i.e.,
Items higher-yielding NSCs, people
FY15 FY16 FY17 FY18 FY19 FY20
will quickly and smartly rush to
Deposit rate 6.80 5.54 4.84 5.50 5.43 5.06 NSCs leaving Banks and NBFIs
appalled. “Recently
Lending rate 11.67 10.39 9.56 9.95 9.58 7.95 government has fixed the
lending rate at 9% and deposit
Spread 4.87 4.85 4.72 4.45 4.15 2.89
rate at 6% of Banking sector.
Source: SD, BB. This system of fixing lending
and deposit rate of interest has
created frustration among the
management of Banks. Due to
Chart 4.5 Trends in Weighted Average low deposit rate in Banks,
Interest Rates of Scheduled Banks general people are encouraged
to invest in NSC” (Source:
12.00 Prothom Alo dated 26/01/2021).
The big difference in interest
rates of NSCs and deposit
10.00
interest rates of Banks and
In percent
NBFIs severely affect

8.00 investment environment in
productive sectors of
6.00 Bangladesh economy.
Challenges From
4.00 COVID-19 Pandemic
FY15 FY16 FY17 FY18 FY19 FY20
Deposit rate Lending rate Devastating COVID-19
Pandemic inflicted 118.63 million
Source: SD, BB. people and took away 2.63
million lives as on 10th March

ARTICLE
expiry the rescheduled periods,

as forecasted by the Banks and
NBFIs.
“Hallmark Scam” of BDT

35,470m from Sonali Bank in
2012, embezzlement of BDT
45,000m from Basic Bank in
2013 and deceitfulness of
Crescent and AnonTex of BDT
100,000m from Janata Bank in
2018, “Destiny Group Scam”,
“Bismillah Group scam” “
Hallmark Group scam” and the
recent collapse of Peoples
Leasing and Financial Services
Ltd. have instigated a question
regarding the validity and
legitimacy of credit assessment,
credit supervision, board
2021 in addition to severely to a Bangladesh Bank report.” independence, management
affecting all sectors of (Source: Daily Star 27/01/2021) efficiency of the Banks and
economies of 208 countries NBFIs, guiding, inspecting and
world-wide. Financial sectors Non-Performing Loans supervising efficiency of BB.
especially Banks and NBFIs are Threats to Banks and Besides, these scams are
sectors of Bangladesh are the NBFIs encouraging deliberate credit
worst sufferers. Government default behavior of borrowers.
borrowing jumped to 79 percent Non-Performing Loans (NPLs) Consequently, banks face the
in April 2020 from 44.60 refers to those loans from which pressure of liquidity risk,
percent in the previous month, investing Banks and NBFIs fail regulatory capital management
according to BB data. In April, to receive interest and to risk and business risk. In
export and import fell drastically recover the principal as per addition, Banks and NBFIs are
and businessmen were unable schedule and reschedule. The facing severe stress for their
to make their payments for LC. NPLs are on the rise in Banks business, liquidity, investment,
Export earnings saw an and NBFLs and has become an managerial efficiency and so on
unexpected 83 percent fall alarming and earth-shaking due to the substantial growth of
year-on-year in April when daily news in the media in NPLs. Economists and financial
imports fell by 62 percent. “The Bangladesh. Bangladesh NPLs experts term NPLs as the “silent
image of the country's financial ratio stood at 8.9 % in assassins’’ of Banks and NBFIs.
sector has been tarnished in the September 2020, compared
international arena as a good with the ratio of 9.2 % in the The NPLs topic is
number of local banks have not previous quarter. Financial unquestionably the single most
made import payments on time. experts consider 2% is the conundrum that the Banking
The number of allegations standard ratio for NPLs. BB has and NBFIs sector of Bangladesh
placed by foreign embassies in recently allowed Banks and are brooking from. The NPL rate
this regard has been rising as NBFIs to extend loan payment in Bangladesh is the second
the respective overseas lenders schedule by rescheduling loans. highest in Asia and 24th highest
failed to get their export As a result, the NPLs ratio is in the world. Back-to-back
earnings in due time, according reduced but it may go up after loans, squalid risk management,

Source: CPD Report
weak corporate governance and resolve, exclusively for those ratio of the banking sector
supervision, political pressure involving large amounts. stood at 9.32 percent. Table 5.3
and malfeasance in sanctioning (a) shows that FCBs had the
loans, weak legal and regulatory The most important indicator to lowest and SCBs had the
frameworks for recovering loans demonstrate the asset quality is highest gross NPL ratio. FCBs'
are considered to be the the ratio of gross gross NPL ratio was 5.74
grander reasons for the rise of Non-Performing Loans (NPLs) percent, whereas those of SCBs,
NPLs. If a recovery case is filed to total loans and net NPLs to PCBs and SBs were 23.86, 5.78
against a loan defaulter, it net total loans. At the end of and 15.13 percent respectively at
usually takes several years to December 2019, the gross NPL the end of December 2019.

ARTICLE
considering the existing

economic conditions of the
country. The new bank is set to
join the others at a time when
the banking and financial sector
is perforated with a number of
loan scams and bad loans due
to a lack of good governance
and proper surveillance. “The
existing banks were already
struggling to survive amid the
current situation over business
activities. In addition, new banks
seem reluctant to expand their
business to rural areas as they
mainly focus on urban areas”
Ibrahim Khalid former Deputy
Governor of BB said. (Source:
Daily Star, 13/02/2021).
The revenues and net-earnings

The banking and NBFIs sectors addition, there are 5 of the Banks and NBFIs of
are now stuck in a quagmire of non-scheduled banks and 34 Bangladesh are on decline due
anguishes. All parameters of the NBFIs operating in Bangladesh. to various causes including
banking sector indicate its All are controlled, supervised over-number of Banks and
obstinate fragility with no sign and guided by BB. Generally, the NBFIs. Dividends on shares of
of revival on the horizon. The rationale to open new banks and Banks and NBFIs have
most discussed issue in the NBFIs depends on the size of down-surged that ultimately
banking sector is the the economy of a country, its affected the stock market of
sky-rocketing non-performing GDP, purchasing power of the Bangladesh
loans (NPLs). In June 2019, the people, productivity, export,
total volume of NPLs increased import, employment and many The cost associated with stiff
to BDT 112,430 crore which was more economic conditions and competition and compliance
11.69 percent of total it should not be personal or management is just one of many
outstanding loans. Surprisingly, political reasons. Due to banking industry challenges
state-owned commercial banks unplanned increase of Banks forcing financial institutions to
had NPLs of over 30 percent of and NBFIs in Bangladesh, Banks change the way they do
their total loans. and NBFIs face hard-hitting business. The swelling cost of
competition to attract and keep capital combined with
High Competition in customers. To survive in the continued low interest rates,
Banking and NBFIs highly competitive financial decreasing return on equity, and
sector is a Big Challenge sector, Banks and NBFIs have to decreased proprietary trading
incur more costs in different are all putting excessive
According to latest BB report, forms, their revenues are down pressure on traditional sources
there are 61 scheduled banks – 6 that severally affect their of banking profitability. In spite
state-owned commercial banks profitability. of this, shareholder
(SCBs), 3 specialized banks
expectations remain
(SBs), 43 private commercial Financial experts and unbothered.
banks (PCBs) and 9 foreign economists are critical about
commercial banks (FCBs). In the opening new banks

Amaranthine Innovation
and Technology is a
Challenge
Technologies are changing,
upgrading and advancing at
supersonic speed in all
businesses and so in Banks and
NBFIs. Maintainable success in
business requires vision,
prowess, munificent clientele
relationship, and continuous
innovation and latest
technology. Benchmarking
effective practices throughout
the industry can provide
valuable insight, helping Banks
and NBFIs stay viable. However,
benchmarking alone only
empowers institutions to keep
up with the pack — it rarely
leads to innovation. As the
truism goes, businesses must
benchmark to survive, and
innovate to thrive; revolution is a
vital differentiator that ruptures
the wheat from the repartee.
Innovation stems from
phantasms, and visions are
discovered through customer
acquaintances and monophonic
organizational analysis. Some
FCBs and PCBs have advanced
by applying the advanced
technologies and are successful
in attracting high value
customers and doing good
businesses than the Banks that
are not well equipped with latest
innovation and
digital-technologies.
However, Banks and NBFIs

using antediluvian business
management applications or
siloed systems will be
amateurish to keep up with this
progressively digital-first world.
(Source: The Business Standard dated 15/02/2021) Without a solid,

ARTICLE
Defilement of corporate ethics

and insider frauds have been
termed as unfathomable risks
for Banks and NBFIs. The
Financial Stability Board (FSB)
had submitted letter to the
Finance Ministers and Central
Bank Governors of G20
countries in 2019 commenting
that “numerous instances of
misconduct in the financial
industry in recent years have
damaged confidence in financial
institutions and undermined
trust in markets. The
implications of misconduct can
be far-reaching, limiting the
potential of finance to serve real
forward-thinking technological questions about the integrity, economies and to foster global
foundation, Banks and NBFIs capability, creditability, economic growth”
will miss out on critical and accountability and effectiveness
advanced business evolution. of the above stated internal and
Ways Forward
Digital renovation is not just an external audit and inspection
Strong and effective internal
upright idea — it’s become teams and remains a big
and external audit and
domineering for survival in the challenge for Bank and NBFIs.
inspection systems are a must
competitive and emulous
to control fraud and
financial sector. It was widely published in the
irregularities in Banks and
local dailies as earth-shacking
NBFIs. Board of Directors of
Anemic and Impuissant news that the audit and
Banks and NBFIs and BB
Internal and External inspection team members of
management may play an
Controls in Banks and various agencies didn’t disclose
important role from sanctioning
NBFIs and hid the loan-scams and
a loan to recovery of loan and
irregularities by taking bribe
Banks and NBFIs have their own punishing the corrupt and
from concerned Banks and
internal audit and compliance criminal managers and staff
NBFIs. Due to weak, feeble and
departments. In addition, they rigorously. Good governance in
ineffective management, the
are audited and inspected by BB the banking and non-banking
corrupt officials remain
audit and inspection team, financial sectors is very much
unpunished and, in few cases,
external auditors, credit rating needed.
departmental disciplinary
agencies and auditors from actions are taken by transferring
Authorities may consider that
Auditor General’s office if they the convict from one
SCBs, SBs and PCBs Boards of
are State-owned Commercial department to another
Directors be composed of
Banks (SCBs). Despite so many department or from one branch
competent, perspicacious and
audit and inspections, the to another branch. Lack of
au courant professionals,
frauds and loan-scams remain honest, sincere, ethical and
instead of those appointed on
undetected and unearthed, integrated senior managers in
political reasons alone.
especially in case of scam Banks and NBFIs is a serious
Management should allow full
involving huge amount for a uncontrollable challenge.
operational freedom in
long of period. This raises

conducting banks’ daily Local investors need to be Conclusion

operations. Both the Board and encouraged to invest more in
management must be industries and businesses by The financial sectors including
accountable to BB. BB should introducing favorable rules, Banks and NBFIs in Bangladesh
be allowed authority to ensure regulations, laws, reducing the are passing thorough a crucial
that individuals sitting on interest gap between and critical stage. These sectors
Boards possess operational investment in Banks, NBFIs and demand a robust, resilient,
knowledge of banking and NSCs. well-guided and well-supervised
finance. Promoting and systems to tackle the great
introducing technology-driven Despite adopting various challenges faced by Banks and
and digital services and measures for smooth and NBFIs. The existing rules,
products in Banks and NBFIs dynamic operation of Banks and regulations and laws that
may help address stiff NBFIs, many challenges conflict and act as deterrent
competition and improve remained unresolved. It’s thus instead of perfect solution to
performances at national and important to look at other smooth operations –
global level. countries’ planning, measures sanctioning of loans, recovery of
and experiences in dealing with loans from defaulted clients,
The legal systems dealing with excessive NPLs, frauds and actions against corrupt officials,
Banks and NBFIs default loans irregularities and adopt in etc., need to be changed or
like Artaho Rin Adalat Ain Bangladeshi Banks and NBFIs. amended. It’s the time to
20003 and Bankruptcy Act 1997 To reduce NPLs to tolerable convert the traditional banking
are very complicated and levels, creative regulatory systems to a customer-centric,
lengthy. It’s observed that it solutions and well-designed risk digital, mobile and online
took many years to settle a NPL extenuation techniques have banking system using latest Fin
case under the said laws. To been utilized in several countries Techs. The lessons from
stream line the Banks and NBFIs in Asia, Africa, Latin America economic and financial history
operation, the obstacles and and Europe that may be applied tell us that no country won’t be
barriers in recovering default in Bangladesh. able to achieve SDGs, economic
loans need to be removed by recovery and economic
amending the laws and creating Banks and NBFIs management solvency – keeping its Banks
more courts to handle NPLs. should recruit qualified, and NBFIs in crisis. Proactive,
knowledgeable, intelligent, timely and corrective steps
All NPLs are not deliberate. honest, sincere and integrated need to be taken by the
Some borrowers face business managers. “In looking for people state-policy-makers, the Central
problems – less export due to to hire, look for three qualities: Bank and the stake-holders of
lack of good buyers, heavy integrity, intelligence, and Banks and NBFIS to save this
energy. And if they don’t have sector from the
competition, lack of materials
economic-financial-shock-wave
due to import restrictions and the first, the other two will kill
s and make it solid, strong,
so on. Congenial invest-climate you” - Warren Buffett, the
effective and efficient.
is needed for Banks and NBFIs. business magnet of USA said.

ARTICLE
World Countries:
Paradox of Wealth, GDP & Debt per Capita
T
he UN has a membership Criminal Police Organization
of 193. A few countries & (Interpol), and The African
agencies are given status Union (AU), to name a few. All
as observers in UN also. There countries in the study are within
are Palestine, Holy See, Taiwan UN.
among those countries. The
organizations in observer status The article would enlighten
are Niue & Cook Island of NZ readers about financial &
who were refused entry as population strength of the
member because of objection. countries. The Financial data will
International Chamber of also involve population, per
Commerce, International capita GDP & debts etc. of some
Olympic Association & 20 nations. It will try to take
International Committee of Red account of status of world
Cross are among observes in economies taking cognizance of
UN. Few recognized net worth, GDP at PPP per
The Author is an organizations approved as capita & debt per capita also,
Economist is a Past President ICAB & observers in UN include ICC searching the paradox. World
Founding Partner Mash Muhith (International Criminal Court), GDP by countries & population
Haque & Co. Chartered Accountants EU (The European Union), Latin are reflected in the table below,
American Integration for 30 countries:
Associations, International

World Countries:
World Bank 2018 Data: GDP, Debt & Per capita Development Paradox of 42 Countries
Country Population GDP @ GDP@ National National Per Capita
2020 in Million Nominal PPP Debt in Debt as Debt GDP Debt as
in Billion Billion Billion % of % of
US& US$ US$ GDP GDP
(2020)
World 7794 85,804 127,723 - - - - -
USA 331 20,494 19,391 22,720 107 58,200 62,641 93
China 1439 13,608 23,301 1,971 14 1,326 9,771 14
Japan 126 4,971 5,487 4,244 85 28,200 39,281 72
Germany 83 3,997 4,187 5,801 145 65,000 48,196 136
UK 68 2,825 2,896 8,49 1 300 127,000 42,491 300
France 65 2,777 2,871 6,470 233 87,200 41,464 210
India 1380 2,726 9,597 543 20 383 2,016 19
Italy 60 2,074 2,411 2,472 119 42,300 34,318 123
Brazil 212 1,868 3,241 697 37 3,200 8,921 36
Canada 37 1,712 1,702 2,091 122 52,300 46,125 113
Russia 145 1,657 3,817 469 28 3,700 11,289 33
S. Korea 51 1,619 1,969 463 29 7,500 31,363 24
Australia 25 1,432 1,157 1,484 41 60,800 57,305 103
Spain 46 1,426 1,774 1,385 97 48,700 30,524 160
Mexico 128 1,223 2,344 2,390 195 3,30 0 9,698 34
Indonesia 273 1,042 3,243 452 44 1,499 3,894 38
Netherland 17 913 907 1,930 52 265,400 52,978 500
KSA 34 782 1,774 4,238 541 6,100 23,219 26
Turkey 84 767 2,254 440 57 2,983 9,311 32
Switzerland 9 705 550 1,840 260 213,100 82,839 257
Poland 37 586 1,112 352 60 9,500 15,424 62
Taiwan 24 575 1,120 199 34 7,400 24,827 30
Sweden 10 551 504 994 180 94,500 54,112 174
Belgium 12 532 541 1,280 240 112,000 43,325 258
Argentina 45 518 920 1,294 256 8,280 11,653 71
Thailand 69 505 1,234 284 56 73,100 6,579 1,111
Austria 9 455 463 163 36 2,170 7,274 30
Iran 84 454 1,700 694 153 90 7,305 1.23
Norway 5 434 322 604 139 117,000 81,807 143
UAE 9 412 694 220 52 23,500 43,005 55
Nigeria 206 397 1,119 109 27 60 2,028 3
Ireland 5 382 367 2,700 707 540,000 77,450 697
Israel 9 370 335 98 26 10,700 41,614 26
S. Africa 59 368 766 181 52 2,600 6,340 41
Singapore 6 364 527 1,537 422 231,000 64,582 358
Malaysia 32 354 931 221 62 6,800 11,239 60
Denmark 6 352 292 517 146 85,700 60,596 141
Philippine 109 331 1,025 81 24 720 3,103 23
Colombia 50 330 714 133 40 2,500 6,651 38
Pakistan 220 313 1,088 105 34 525 1,473 36
Chile 19 298 435 187 63 9,771 15,23 16
Bangladesh 164 348 917 91 26 160 2,068 7
Source: Websites of WB group including IMF, CIA ADB

ARTICLE
An analysis of the data shows us net worth if per capita debt with Rostow OBE has been the
different surprising aspects. The GDP accounting is made. proponent of Theory of Stages
high GDP per capita countries of Growth. These are Traditional
whose per capita GDP is around Again Germany, UK, France, Society, Pre-conditions for
US$ 40,000 or above are highly Italy, Canada, Spain, Australia, Take-off, Drive to Maturity & Era
debt prone countries. Starting Netherlands, Switzerland, of Mass Consumption. The US
with USA the per capita debt: Sweden, Norway, Ireland, Economist Rostow passed away
GDP is US$ 58,200:62,641. This Singapore, Denmark are having in Austin Texas in the year 2005.
means USA has Debt per Capita similar debt vs GDP ratio. For Born in 1916 he has been Special
of 108% on GDP. Again Japan’s Germany & UK this ratio is as Assistant, National Security
GDP per capita is US$ 39,287, high as 136% & 299% Affairs to US President Lyndon
whereas its debt per capita is respectively. France, Italy & B. Johnson. Born in NY.
US$ 28,200, In other words 72% Canada are having these ratio Economist WW Rostow is
of the GDP per capita is Japan’s respectively at 210%, 123% & greatly remembered for his
Debt per Capita. Looking at 113%. Australia, Spain & Theory of Stages of Economic
China the Debt is US$ 1,326 vs Netherlands are respectively Growth. These 5 (Five) stages
GDP of US$ 9,771, making its having debt to GDP ratio of he referred to are still relevant
debt @ 13% of GDP. It is less 103%, 160%& 500% on the other for economic development. As
Debt prone for development hand. Switzerland has 257% of per his theory, Bangladesh
finances than the recurrent GDP as debt, Sweden @ 174%, appears now to be in take off
Development tycons. Belgium @ 258% whose GDP stage aspiring its drive onwards.
capita are US$ 82,839, US$
Before coming into its further 54,112 & US$ 43,325 respectively. The above table deals with all
analysis a look into 3 largest the countries which are in Era of
Norway has per capita debt of mass consumption. These
economies may be very
US$ 117,000 to GDP US$ 81,807 countries are heavily indebted
meaningful & pertinent. USA
while for Ireland these indicators but their debts are blessings to
GDP is US$ 20,494 Trillion
per capita are debt of US$ their development. As we
which is US$ 13,608 Trillion for 540,000 & GDP of US$ 77,450.
China. Again it is US$ 4,971 reckon back into it for UK the
Singapore has GDP per capita Per Capita Debt: GDP ratio is
Trillion for Japan. In terms of of US$ 64,582 Vs debt US$
purchasing power parity (PPP), 127:42, France 41:87, Italy 34:42,
231,000 while for Denmark GDP Canada 46:52, Australia 57:61,
the order of top 3 changes. At per capita is US$ 60,596 against Spain 30:49, Netherland 53:265,
PPP the GDP of China with US$ per capita debt of US$ 85,700. Switzerland 83:213, Sweden
23,301 Trillion is followed by
54:95, Belgium 43:112, Norway
USA @ US$ 19,391 Trillions. At Of the 42 countries in the table 82:117, Ireland 77:540, Singapore
PPP GDP of Japan is US$ 5,487 the following had highest or 64:231, Denmark 61:86 etc. while
Trillion. Although the colossal around US$ 40,000 GDP per for USA it is 62:58.
number of population of China capita vis-à-vis its stated debt
causes its GDP per capita to be per capita. The Big Push theory of
at very low level US$ 9,771 Economist Paul Rosenstein
compared to highly indebted This table shows all the high per
Rodan is also called balanced
but high per capita income capita countries have huge
growth. This theory means a
countries its debt is only US$ national debt. This may in the
colossal amount of investment
1,326 per capita. We can safely form of inter country
is needed to gear up an
read that high per capita cannot development finance for
economy to be accelerated to
be the basis of complacence for infrastructures, FDI etc. & so
pace of development. It stated
the present developed countries forth.
to reap & derive benefit of
while their debt per capita is external economy, a huge
Way back in 1960 .famous
huge. This may lead to negative amount of investment will lead
Economist Walt Whitman

World Countries:
Country Million Billion US$ Billion US$ Debts as % Per Capita US$
GDP National of GDP GDP Debt
Nominal Debt
USA 331 20,494 22,720 107 62,641 58,000
Japan 126 4,971 4,244 85 39,281 28,200
Germany 83 3,997 5,801 145 48,196 65,600
UK 68 2,825 8,491 300 42,491 127,000
France 65 2,777 6,470 210 41,464 87,200
Italy 60 2,074 2,472 123 34,318 42,300
Canada 37 1,712 2,091 113 46,125 52,300
S. Korea 51 1,619 463 24 31,363 7,500
Australia 25 1,432 1,484 103 57,305 60,800
Spain 46 1,426 1,385 97 30,524 48,700
Netherl and 17 913 193 500 52,978 265,400
KSA 34 782 4,238 542 23,219 6,100
Switzerland 9 705 1,840 260 82,839 213,100
Sweden 10 551 994 180 54,112 94,500
Belgium 12 532 1280 240 43,325 112,000
Norway 5 434 604 139 81,807 117,000
Ireland 5 382 2,700 707 77,450 540,000
Singapore 6 364 1,537 422 64,582 231,000
Denmark 6 352 517 146 60,596 85,700
UAE 9 412 220 52 43,005 23,500
Source: WB group, CIA, ADB websites.
any country into self-sustaining Taiwan 34%, Thailand 56%, Iran @ 250%, and Colombia @ 31% &
development. The features are 153%, UAE 52%, Israel 26%, Chile @ 63%.
big investment amount, sectoral Pakistan 34%, Bangladesh 26%.
choices, planned However breaking away from We can by these countries is
industrialization, economics of this trend Singapore has limited which squeezes their
scale etc. In order to keep pace exposure of debt to GDP@ development strive. A paradigm
of development on going, 422%. Off course the per capita shift in the development finance
Bangladesh also needs a big GDP is higher for Singapore @ & new World Economic Order
push. This has started already US$ 64,582, KSA @ US$ 23,219 may not be a far cry. Come to a
attracting some Economists & South Korea @ US$ 31,363 & conclusion that Australia, EU
observation. However good UAE@ US$ 43,005. countries & USA are wealthier at
governance & accountability are huge debt burden. Asian, Latin
yet a far cry for Bangladesh to If we visit Africa, Nigeria’s debt American countries are less
optimise the benefit, if it wants to GDP ratio is @ 27%, South prone to debt financed
to. It is a sheer ill luck for the Africa @ 49% more in line with development except Mexico &
nation & country that earned Asian countries with 3 Argentina. The paradigm for
liberation by a war & shed blood exceptions. The Asian & African development in Asia, Africa &
for mother tongue countries are less prone to debt Latin America are in
in their respective development resemblance with one another.
If we consider Asian countries’ finance. It may however be more so
debts these are China is 14% of because access to debt
GDP, India 20%, Russia 28%, In Latin America Brazil’s funds……. ???
South Korea 29%, Indonesia exposure of debt to GDP is @
44%, KSA 541%, Turkey 57%, 37%, Mexico @ 195%, Argentina

ARTICLE
Macro-Economic Aspects:
National Budget 2021-22 and Expectations
S
Speakers at a webinar Hon’ble Prime Minister said, it is
Compilation of Pre Budget webinar
emphasized on important to monitor whether
discussion organized by ICAB & strengthening the the flow of investment increases
Economic Reporters Forum (ERF) ongoing vaccination as a result of the tax cuts. He
by programme, carrying out thinks that if there is a lack of
Abu Taher necessary tax reforms and trust, investment will decrease.
Senior Assistant Director reducing the corporate tax Mr. Rahman also stressed the
(Press & Publication), ICAB rates, ensuring proper budget need for boosting confidence
implementation and quality among the businesses and
spending of development investors, attracting more FDI,
projects, addressing the ensuring skills development
livelihood issues in the context and, sound basic education up
of pandemic, prioritizing the to secondary level.
CMSMEs, and the health sector
to mitigate the health-related Stressing the need for carrying
risks, widening social safety out necessary reforms in the
nets, raising the tax-GDP ratio, financial sector and in the
generating more employment revenue sector he said, there
and bringing the education could be a long discussion on
sector under the purview of the reforms in the banking sector
stimulus packages. and tax administration and
added that, reforms in the
They also opined that the next capital and bond markets are
budget should not be also necessary to attract
conventional and recommended large-scale investors. If the lion's
the tackling of Corona crisis as a share of deficit financing could
top priority, and getting out of be made available from the
the 'obsession' with GDP foreign sources, then its impact
growth. in the domestic sector would
not be that much, the adviser
Country’s leading economists, noted.
professionals, business leaders,
and civil society representatives About provision of whitening
gave their recommendations at the black money, this time the
a webinar titled presidents of the two big
"Macroeconomy: Expectations business organizations of the
from National Budget 2021-22" country took a stand against
organised by the Institute of laundering black money. They
Chartered Accountants of are Barrister Nihad Kabir,
Bangladesh (ICAB) and the president of the Metropolitan
Economic Reporters’ Forum Chamber of Commerce and
(ERF) on 4 May 2021. The Industry (MCCI) and Rizwan
programme was moderated by Rahman, president of the Dhaka
Md. Humayun Kabir FCA, Chamber. They criticized the
Council Member and Past opportunity to legalise black
president, ICAB. money through payment of
lower amount of tax, saying
The Chief Guest on the honest businessmen pay taxes
occasion, Dr. Mashiur Rahman, at the highest rates.
Economic Adviser to the

the tax net rather than setting

target for revenue collection, he
added.
He said, "It is not humane to give

the opportunity to whiten the
money of theft and robbery to
the launderers with 10 percent
tax. This deprives honest
taxpayers. '
Giving an example of how

honest taxpayers can be
discouraged by the opportunity
to whiten black money, Rizwan
Rahman said, "We pay 35
percent tax,". Considering the
business attitude, I will not pay
tax at the rate of 35% of income
next year, he said and added
that next year I will whiten that
money with 10 percent tax. I
Nihad Kabir said, many "We see some changes in the have the opportunity not to, 25
launderers could whiten the figures in budget. But the percent tax, which will be my
money of theft and robbery at destination of the taxpayers' profit.
the rate of 10 percent tax to the money remain unclear," she
government’s coffer. This would added. The SMEs sector needs On black money he opined, the
discourage the honest policy support so that they get illegally earned money should
taxpayers, she added. access to the stimulus not get the opportunity to be
packages, she added. Large legalised through paying lower
MCCI president said, I have been industries got benefit of the rate of taxes. Rather a penal tax
doing business ethically for 30 stimulus package, but the at the rate of 10 per cent needs
years with a maximum tax rate government should tag the to be added to the normal tax
of 25/30 percent. But with a 10 condition of employment rates for legalising illegally
per cent tax, many are escaping generation with their package earned money, he suggested.
25/30 percent tax. 'Look at to thwart job cut, she said and
those who are taking the added that the economy would He demanded reduction of
country's money abroad, she rebound if the government corporate tax at a progressive
suggested.' prioritizes on cottage and small manner, slashing by 2.5 per cent
industries. for three consecutive years to
Ms. Kabir also put utmost bring it down to 25 per cent.
priority on ensuring qualitative Dhaka Chamber of Commerce
spending of development and Industry (DCCI) president Similarly, Abul Kashem Khan,
projects through real-time basis Rizwan Rahman said, the former president of the Dhaka
monitoring and evaluation by majority portion of the stimulus Chamber and director of the AK
the IMED, raising the tax-GDP packages has reached to the Khan Group, thinks that honest
ratio, giving policy support to medium scale industries, taxpayers are being treated
CMSMEs, and to check the trend depriving the CMSME. The unfairly by giving the
of dodging tax. government should give a opportunity to the money
target to the NBR for expanding launderers for whitening the

ARTICLE
no loss or break even’. Who will

come to do business if you have
to pay taxes from the first year,
she questioned and also added
that the existing corporate tax
rate is higher than that of the
profit level of the businesses.
She demanded withdrawal of

the minimum tax as it is charged
on businesses irrespective of
their incurring losses or making
profits. She said, the effective
tax rate becomes 50 per cent in
some cases for corporate
taxpayers due to different
withholding taxes.
black money at a rate of 10 per black money. Already 12
cent. He suggested the thousand crore Taka have been At the event, businessmen and
continuation of the stimulus whitened. The CPD Special economists called for ensuring
packages in the next budget as Fellow also suggested for an investment-friendly
well as rationalizing taxation coming out of the GDP growth environment by reducing
measures and improving the illusion. He said, tackling the corporate taxes. Aftab-ul-Islam,
investment climate to maintain Corona crisis should be given former President of the
the growth of goods priority in the next budget. American Chamber of
consumption through providing Commerce in Bangladesh
'consumption incentives'. "The In the current budget, besides (AmCham), said, it was difficult
production will fall if investing in the stock market, to do business with so much
consumption declines and it will cash and black money corporate tax. If the tax rate is
ultimately affect employment," deposited in banks are also so high, foreign investors will
he said. given the opportunity to be not come to this country. Apart
whiten with 10 per cent tax. from this, there is less difference
He further mentioned that There is also an opportunity to in tax rate between listed
consumers in the UK get up to whiten the black money by companies and non-listed
50 per cent discount for eating buying land and flats with a companies in this country. This
at restaurants. The government certain amount of tax levied is also a big obstacle, he added.
gives the discount money. according to the area. If
Consumers in Bangladesh will someone launders money, no Bangladesh Garment
be encouraged to spend if they agency other than the NBR, Manufacturers and Exporters
are given a discount. including the Anti-Corruption Association (BGMEA) President
Commission (ACC), will be able Faruk Hasan thinks that the
Mostafizur Rahman, Special to question the source of the same tax rate should be kept for
Fellow of Center Policy Dialogue money, he added. at least five years. He said, if
(CPD), agreed with the there is one tax rate for five to
businessmen. According to him, Rupali Chowdhury, President, ten years, there will be
regular taxpayers are being FICCI said, there is no guarantee confidence among investors.
discouraged from paying taxes that the first year will be They will be encouraged to
with the opportunity given to profitable. It takes a few years invest.
launderers for whitening the for a business to reach ‘no profit,

The recovery from the Dr Selim Raihan, executive some visible reforms. He
pandemic impact may take director of South Asian Network mentioned that exports in some
longer time, affecting the export on Economic Modeling destinations and remittances are
of goods, he allured. (SANEM) expressed that the increasing, but the growth of
second wave of corona is those two sectors has some
He also said, the SMEs are in worrying. He also emphasized multiplier effects. The country
most vulnerable condition now. that the working and urban poor will not be able to come out of
"We hope that there would be should be given incentives in this the crisis unless it implements
specific direction and allocation situation. They are suffering the the budget properly, he opined.
for the sector in the upcoming most. Executive Director of
budget," he added. BGMEA SANEM expressed that erosion Mashrur Riaz, chairman of the
President urged the of business confidence is an Policy Exchange of Bangladesh
government to provide policy alarming sign as the recovery of said, if 50 per cent of the people
support to the affected SMEs remains slow. He also could not be vaccinated in the
industries until the crisis ends so called for expanding economic next one year, the recovery
that those could make a operations and growth, not process would have to start
turnaround. having an obsessed mindset on from "zero".
GDP growth, rolling out social
He also demanded to keep the safety net schemes for the He said, the government should
tax rates stable for 10 years, or urban poor, boosting business allocate 1.0 per cent of GDP for
at least for five years, for confidence through necessary the low-income group of people
turnaround of the industries. measures, increasing budget to help them survive in this
implementation, and ensuring pandemic.

ARTICLE
more on expenditure, and thus

opined that the budget deficit
could be stretched from 7% to
8%.
ICAB President Mahmudul

Hasan Khusru FCA pointed out
that the revenue rate in the
country is lower than the GDP
and suggested for increasing
the tax net. Mentioning the
ICAB's cooperation with the
NBR and the company's
obligation to verify the audited
report (Document Verification
System or DVS, he said,
Bangladesh's economy has
been severely damaged. Many
indicators of the global
economy are still down. There is
We have to get out of the He also suggested extending an uncertainty in the economy
obsession of growth, as stated support to develop the of the whole country. To address
by vernacular daily Prothom capacitates of domestic the losses, the government is
Alo's special news editor industries on vaccination. planning to increase spending in
Shawkat Hossain Massum. Strategic investment is also the financial year 21-22 by
About the priorities of the next required to ensure vaccination increasing the liquidity flow in
budget he said, "We don't want supply, he added. He proposed the economy, he said and added
GDP to be discussed in the next allocation of Tk 10 billion for the that people's expectations from
budget". GDP growth may not new poor. The government the budget are much higher.
be the main issue in the next should focus on reforms rather Higher corporate taxes would
budget. Production, investment, than imposing huge revenue hinder foreign investment.
employment and consumer target which is not achievable Hence, the corporate tax needs
demand must be given the he said, adding that spending to be reduced, he suggested.
highest priority in the next the allocation is necessary to
budget, he suggested. reap benefit. ICAB Vice President Maria
Howlader FCA suggested that
Ahsan H Mansoor, executive He cautioned that, for the new the budget should be with
director of the Policy Research poor, which is being created specific proposals to increase
Institute (PRI) said, during the from the impacts of the the number of women
Corona crisis, people should be pandemic, only cash support is entrepreneurs. There should be
given priority over GDP. The not enough for them, rather budget allocation for training to
next budget will have to make some permanent measures enhance the skills of women
big allocations for life and should be taken for them. entrepreneurs. Last year, 94
livelihood. Executive director of percent of the incentive
Policy Research Institute (PRI) The renowned economist also package was for men and the
proposed allocating OF Tk suggested to address the remaining 6 percent was for
15,000 crore Taka for livelihood issue caused by the women. This is obviously
vaccination in the next budget. pandemic, prioritize the SMEs in discriminatory, she expressed. A
the stimulus packages, focuse cell may be opened in the

specially during this pandemic

situation. She put emphasis on
preparing crisis management
plan to face any health disaster
like Covid-19.
Rasheda K Chowdhury,
Executive Director, Campaign
for Popular Education (CAMPE)
said that the upcoming budget
should be a pandemic-focused
one while the education sector
should be brought under the
stimulus package as the losses
to this sector is huge and it is
invisible. She demanded for
stimulus package specially for
the non-MPO educational
Ministry of Finance for women employment. Transparency, institutions those are passing a
development and technology and unemployment very critical time during this
empowerment. She called for are the three things we need to pandemic. She also said,
inter-ministerial functions and look at - to restore the economy, education sector must not be
transparency as well as special he suggested. set aside.
sector-based allocations for
women's development. Stressing on the Ms. Chowdhury said,
macro-economic management, government should give special
ICAB Council Member food & health security, Dr attention to reduce the rate of
Mohammed Forkan Uddin FCA Nazneen Ahmed, senior early marriage, dropout from
said, there should be a plan for research fellow at the school and continuation of
economic recovery during the Bangladesh Institute of mid-day meal at primary school.
ongoing Covid period. There will Development Studies (BIDS) Citing a research of UNFPA she
be many challenges in the advocated for reducing the said, government is giving less
economy and policy support corporate tax rate and attention on the women’s
will have to be increased to exploring the untapped areas reproductive healthcare
address them. Corporate taxes for raising the tax collection to campaign while giving more
are much higher than listed meet the additional liquidity focus on the health issue during
companies. If the capital market pressure on the government. this pandemic time.
remains in good condition, the She urged for allocation in
tax from the market investment budget for ensuring food Also spoke in the discussion,
will increase further, he said. security and creation of ICAB Vice Presidents Sidhartha
Companies need to be employment for the people in Barua FCA, Md. Abdul Kader
encouraged to invest in the urban area. In this regard she Joaddar FCA. ERF President
stock market. As a result, suggested the government to Shirmeen Rinvy made the
balanced distribution of arrange part-time employment opening remarks while its
resources will be ensured, he opportunities for them. She also general secretary SM Rashedul
added. We need to increase demanded allocation for Islam offered vote of thanks.
investment in setting up new building awareness among the
industries to increase people about health risks

ARTICLE
Forensic Accounting Education:

A Brief Discussion on Existing Literature
Dewan Mahboob Hossain1 | Md. Saiful Alam2 | Al Amin3
The Authors are:
A
bstract hand, in the last few decades,
several notorious fraud cases in
The main objective of this the private/corporate sector
article is to provide an overview (such as Enron, WorldCom,
of the current state of forensic Tyco, Satyam etc.) got immense
accounting education from the attention from the public. The
global scenario. Forensic roles and actions of the top
accounting, as a new branch of management, accountants and
accounting is gaining independent auditors came
importance all over the world under public scrutiny. Because
because of the increased of this ever-increasing
number of fraudulent activities fraudulent activities (mostly
(financial crimes) in both public financial in nature), stakeholders
1
Associate Professor and private sector. For that started emphasizing on the
Department of Accounting & reason, now a day, the need for importance of corporate
Information Systems good fraud investigators and governance, auditing and
University of Dhaka
forensic accountants has forensic accounting.
become a burning question. The
education and training of Though both forensic
forensic accounting can be accounting and internal auditing
done in several ways by are ‘investigative’ in nature,
following several approaches. these are not the same. Auditors
This article, on the basis of the form and express an opinion
published literature, highlights and provides a reasonable
the current state of forensic assurance on the fairness of the
accounting education, the overall financial statements
qualities and skills needed for prepared for a particular period.
forensic accountants and the Whereas, forensic accounting
Associate Professor
2 different frameworks of forensic mostly deals with fraud
Department of Accounting & accounting education detection and investigation.
Information Systems suggested by different authors. Over the last few decades,
University of Dhaka forensic accounting has
Keywords emerged as a new and
important branch in the
Fraud, Forensic Accounting, discipline of accounting.
Financial Crimes, Forensic Forensic accountants help in
Accounting Education preventing, detecting and
examining frauds that are
Introduction related to any particular
occupational/professional issue
White collar crimes and public
or the financial statements. Also,
sector corruption have become
the forensic accountants
burning questions among the
provide litigation-support
policy makers, professionals and
2
Associate Professor services in relation to the fraud.
academicians over the last few
Department of Accounting & For that reason, it is said that
decades. On one hand, public
Information Systems forensic accountants need to be
University of Dhaka sector corruption prevails all
experts in multiple disciplines.
over the world. On the other

importance of forensic
accounting courses and
trainings (3) the teaching
approaches that are followed
and (4) the frameworks related
to forensic accounting
curriculums.
The next section of the article

highlights the nature of forensic
accounting and fraud
investigation. After that, on the
basis of several published
literatures, the necessary skills
and qualities of the forensic
accountants are highlighted.
Then, the findings of the
literature on forensic accounting
education is presented. At the
These multiple disciplines suggest that society is end, conclusion is drawn.
include economics, accounting becoming more alert and
and finance, law, statistics, conscious with the financial Forensic Accounting and
technology and frauds and accounting Fraud Investigation
research/investigative methods. profession is also focusing on
Also, in order to present the fraud investigation. Therefore, Pedneault, Rudewicz and
fraud in paper (i.e., in the written there is a need for ‘competently Sheetz (2012, p. 2) has defined
form) and in the court of law educated and trained forensic forensic accounting as ‘the
(orally), forensic accountants accountants’ (Rezaee & Burton, action of identifying, recording,
need to have good oral and 1997, p. 480). Forensic settling, extracting, sorting,
written communication skills. In Accounting has been seen, reporting and verifying past
order to develop these skills, mainly in the USA and European financial data or other
proper education and training countries, as a separate field of accounting activities for settling
are essential. That is why, there study in both graduate and current or prospective legal
is a call for undergraduate programs disputes or using past financial
changes/development in the (Zeytinoglu & Anadolu, 2020). data for projecting future
accounting curriculums in the financial data to settle legal
educational and professional The objective of this study is to disputes’. In general, the term
institutions. analyze the current state of forensic accounting is
forensic accounting education. associated with concepts such
According to Rezaee, Lander Drawing from the existing as ‘fraud, fraud prevention, and
and Gavin (1992), accounting literature, the study focuses on fraud investigations’ (Pedneault
syllabi should include forensic four issues: (1) the relevant skills et al., 2012, p. 1). As mentioned
accounting as the demand for and qualities required for a earlier, the number of financial
this kind of service is increasing forensic accountant/fraud fraud cases (in both public and
because of the rising fraud investigator, (2) the perceptions private sector) is increasing over
cases in different industries. of the professionals and the time around the world.
Rezaee and Burton (1997) educationists about the Prabowo (2013, p. 353) has

ARTICLE
4. Relying on the false

statement caused damage
for the victim.
As mentioned earlier, we need

forensic accountants for fraud
detection, investigation and
prevention. As the business
organizations, regulators and
other stakeholders (specially
the investors) are becoming
highly concerned about the
ever-increasing fraud,
corruption, financial crimes and
bribery, the demand for forensic
accounting is growing (Rezaee
& Wang, 2019). Other than just
investigating the fraud, forensic
accountants can also help in
highlighted fraud as a ‘major “Fraud is an activity that takes presenting these matters in the
international problem’. For that place in a social setting and has courts for dispute resolution
reason, fraud detection, severe consequences for the (Pedneault et al., 2012). In a
prevention and investigation has economy, corporations and fraud investigation case, the
become one of the burning individuals. It is an opportunistic forensic accountants are
questions in almost every infection that bursts forth when involved in (1) planning, (2)
economy. A fraud can have a greed meets the possibility of gathering and preserving
tremendous negative impact on deception. The fraud information, (3) discovering the
the investors, owners of investigator is like the attending fraud and (4) reporting
businesses, auditors, physician looking and listening (Pedneault et al., 2012). Forensic
government and regulators, and for the signs and symptoms that accountants can also be
general public (Ozili, 2020). reveal an outbreak”. appointed for various other
That is why, over the past two activities, such as (p. 3-4):
decades, researchers have Wells (2005) identified four
general elements that are 1. Bankruptcy, insolvency, and
published a lot on forensic
present in the offence of fraud. reorganization,
accounting (Ozili, 2020).
These include ( p. 8):
2. Computer forensic analysis,
The Association of Chartered
Fraud Examiners defined fraud 1. A false statement that is
3. Economic damage
as ‘the use of one’s occupation material in nature.
calculation (say in case of an
for personal enrichment
2. The fraudster has the insurance claim),
through the deliberate misuse
or misapplication of the knowledge that his/her
4. Family law (say claims in
organization’s resources or statement is false.
case of a divorce),
assets’ (Pedneault et al., 2012, p.
3. The victim relied on the
12). According to Pedneault et 5. Financial statement
false statement.
al. (2012, p. 12): misrepresentation,

6. Business valuation, business organizations, problem solving skills and have

governmental agencies, police to be good in inductive and
7. Fraud prevention, detection and others (Tiwari & Debnath, deductive reasoning. Other than
and response. 2017). these, he/she must have good
written and oral communication
Similarly, Rezaee and Wang The Necessary Skills and skills so that the case doesn’t
(2019) has emphasized on the Qualities of the Forensic remain misrepresented to the
increasing importance of Accountants stakeholders (especially in the
forensic accounting as a court of law). Tiwari and
separate branch and identified Considering the Debnath (2017) has illustrated
forensic accountants’ multidimensional involvement forensic accounting as a ‘blend
involvement in following of forensic accountants, it is of knowledge’. According to
activities: obvious that traditional them, forensic accountants
accounting knowledge is not should possess knowledge
1. Fraud examination; sufficient for a forensic related to accounting &
accountant. Rather a forensic auditing, IT, law, communication
2. Anti-corruption and accountant needs education and human behavior and
anti-bribery activities; and training in different statistics. These are briefly
disciplines and possess various described here:
3. Business valuation; skills. According to Ozili (2020,
p. 49): a) Accounting and auditing:
4. Litigation support and
expert witnessing and Forensic accountants
“… the emerging innovations in should have the skills related
financial fraud schemes, and to examining accounting
5. Cyber security.
frequent changes in accounting records and analyzing the
Tiwari and Debnath (2017) has methods and policies by firms in financial statements. These
categorized forensic the preparation of financial skills are helpful in
accountants’ involvement in reports has made fraud identifying potential red
three service domain. For them, detection become a flags in relation to fraud,
a forensic accountant can complicated process in recent corruption, bankruptcy and
perform consultancy (in times, and for this reason, a insolvency. Also, forensic
valuation, arbitration, family combination of skill, knowledge, accountants should possess
disputes, insurance claims, experience and the knowledge and skills of
insolvency and others), “attention-to-details” will be the auditing. However,
non-scientific testimony (such major attribute of a successful according to Tiwari and
as fact finding and collecting forensic investigator in these Debnath (2017), in most
evidence in criminal matters) times”. cases, forensic accounting
and investigative services goes beyond the scope and
Rufus, Miller and Hahn (2015) purpose of auditing. The
(related to manipulation of
has recognized that a forensic purpose of auditing is to
accounting data, assessing
accountant must have the provide an independent
damages and examining
ability of critical thinking, opinion on the overall
corruption and employee
reasoning and communication. financial statements and
negligence). As a result,
Moreover, he/she should be report the deviations. It is a
forensic accountants can be
rational, reasonable, skeptical, regular activity performed
appointed by different clients
open-minded and well-informed on periodic basis. But
such as lawyers, insurance
(Rufus et al., 2015). Also, a forensic accounting is not
companies, banks, investors,
forensic accountant should have

ARTICLE
highlighted the importance of

big data analysis in forensic
accounting. Kilic (2020) has
mentioned the importance
of knowledge of big data
analysis, data analytics and
algorithms in fraud control
activities as in today’s digital
business environment,
traditional methods cannot
be applied to detect
fraudulent transactions. In
order to detect
cybercrimes, forensic
accountants need to
perform computer
examinations (Tiwari &
Debnath, 2017).
d) Human Behavior Skills: As

forensic accounting is
investigative in nature and in
‘regular’ in nature. Rather, it forecasting (in relation to most of the cases forensic
is need based. Forensic stock prices, loss prediction, accountants have to deal
accountants are appointed sales prediction etc.). For with corruption and fraud,
in case of suspicion of fraud that reason, it is expected they must have the skill to
(Tiwari & Debnath, 2017). that forensic accountants understand human
Forensic accountants need have knowledge of psychology and behavior.
to go through all the statistical tools, models and The success of a forensic
relevant records and tests and data mining accounting engagement
conduct enough techniques (Tiwari & highly depends on
investigation (through Debnath, 2017). interpersonal and
collection, inquiry and communication skills of the
scrutiny of sufficient c) IT Knowledge: Tiwari and
forensic accountants.
evidence) in order to Debnath (2017) mentions
Command over disciplines
remove all the doubts and that because of the
such as criminology,
suspicions in relation to the increasing number of cyber
psychology and
fraud. frauds, the IT knowledge
communication is important
has become important for
(Tiwari & Debnath, 2017).
b) Statistics: In order to deal the forensic accountants.
Moreover, the written and
with large data set and These authors emphasized
oral communication skills
identifying the that the forensic
are also important to
abnormalities in data, accountants should become
present the case in the court
forensic accountants need experts in software
of law (Rufus et al., 2015).
to gain knowledge of embedded statistical IT
statistical tools. Also, in tools. Authors such as e) Legal Issues: Court is
many cases, they need to go Rezaee and Wang (2019) considered as one of the
for prediction and and Kilic (2020) have

stage. In recent years, because

of the rapidly increasing
corporate fraud and corruption
cases, the issue of forensic
accounting has drawn the
attention of the researchers. So,
the number of studies on
forensic accounting is still very
limited. The existing studies on
forensic accounting education
have mostly focused on the
perceptions of the accounting
professionals, students and
academicians about forensic
accounting education. Few
studies have also focused on the
current accounting curricula
and the need for inclusion of
forensic accounting issues in the
‘working fields’ for a forensic has highlighted that curriculum. Few other studies
accountant (Tiwari & “Forensic accounting acts have illustrated the alternative
Debnath, 2017). Many frauds as a bridge between law and teaching methods in forensic
are to be proved and many accounting sciences”. accounting.
disputes are to be solved in
the court of law. In some Drawing from Turkish The perceptions of the
cases, forensic accountants accounting academicians, Uyar professionals and
can assist the lawyers, as and Cavusoglu (2020) has educationists regarding
Tiwari and Debnath (2017) identified the skills of forensic forensic accounting education
has mentioned, in criminal accountants in a recent paper.
and civil lawsuits as financial For them, the most important As mentioned earlier, some
experts to provide skills for forensic accountants studies focused on the
testimony. Hopwood, Leiner include ‘deductive analysis, perceptions of the professionals
and Young (2012, p. 15) has critical analysis and and educationists regarding
stated: “… the forensic unstructured problem solving’ forensic accounting education.
accountant constantly (p. 245). Rezaee and Burton (1997) is one
works in the legal of the earlier studies in this
environment and for this A Summary of the regard. Drawing from the
reason must have a broad, Findings of the perceptions of academicians
basic understanding of legal Literature on Forensic and Certified Fraud Examiners
systems … Such an Accounting Education (CPEs) in the USA, the study has
understanding should suggested an increasing
This section presents a demand for forensic accounting
encompass not only basic
summary of the findings of and therefore proposed the
business law and civil court
some existing literature on inclusion of forensic accounting
systems but also criminal
forensic accounting education. in accounting curricula. The
law and criminal court
The research on forensic respondents also emphasized
systems”. Uyar and
accounting is still at the nascent that the career opportunities
Cavusoglu (2020, p. 245)

ARTICLE
future. In order to explore the

opportunities regarding careers
in forensic accounting, support
from the educational institutions
is needed.
To summarize, it can be seen

that most of these studies have
shown that the accounting
practitioners and educators
consider forensic accounting as
an emerging discipline and they
propose the inclusion of
forensic accounting courses in
the existing curricula.
The teaching methods applied

in forensic accounting
education
related to forensic accounting forensic accounting and they The issue of the teaching
should be highlighted to the emphasize the need for methods applied in forensic
university and college level integration of forensic accounting education has been
students. According to these accounting issues in the explored in some of the studies.
respondents, forensic curriculum. In the study of Zeytinoglu and
accounting education not only Anadolu (2020), the authors
meet the society’s demand for Kramer et al. (2017) have also
have concluded that the
fraud investigation, but also conducted a survey on the
educators should apply
enhance the credibility of accounting academicians
innovative methods (rather than
financial reporting and ensure (randomly selected from the
classical methods) while
corporate governance. However, Hasselback Accounting Faculty
teaching forensic accounting.
as the respondents identified, Directory) and practitioners.
Alshurafat et al. (2020), by
several obstacles in relation to The respondents have agreed
interviewing the practitioners
introducing forensic accounting that the demand for forensic
and academics in Australia, has
education. Among them, lack of accounting will increase. That is
suggested that experiential
financial resources, materials why, separate undergraduate
methods should be used while
and textbooks, lack of interest and graduate course/degree is
among the academics and needed to fulfil the demand.
This method will teach students
students are prominent. the technical, theoretical and
In a recent study, Zeytinoglu and
ethical issues through real
Hidayat and Al-Sadiq (2014) has Anadolu (2020) has evaluated
forensic accounting problems.
conducted a survey on the need the perceptions of Turkish
Also, in the survey of Kramer et
for forensic accounting students and certified public
al. (2017, p. 249), the
education among the accountants regarding forensic
respondents (accounting
accounting professionals in accounting education. The
educators and practitioners)
Bahrain. The authors have found respondents have identified that
have emphasized on the need
that the respondents are demand for forensic
for ‘experiential learning
familiar with the benefits of accountants will increase in

existing accounting/auditing
courses or as an
independent/separate course.
Similar integration approach has
also been proposed in an earlier
study by Rezaee and Burton
(1997). The authors contend, a
forensic accounting course
should have four modules: (1)
investigation and law, (2) fraud
and fraud auditing, (3) financial
reporting process and (4)
ethics.
Rezaee et al. (1992, p. 27) has

emphasized that ‘accounting
education at every level is in
process of change’. The authors
component’. The extant level courses on forensic have proposed several initiatives
evidence has also suggested the accounting (Zeytinoglu & to provide a coverage of
use of different and innovative Anadolu, 2020, p. 29). forensic accounting in the
teaching approaches in forensic Zeytinoglu and Anadolu (2020), curriculum. According to them,
accounting such as case study, on their study on Turkey, a forensic accounting course
small discussion group, mentioned that “… in Turkey, should not only train the
teamwork, mock trials, short forensic accounting education is specialized knowledge and
stories and problem-based given in universities under the contents of forensic accounting
learning cases (DiGabriele, 2012; department of accounting and but also teach the students how
Lehmann, 2015; Jones & certification programs of some to prevent and detect fraud in
Dosanjh-Zucker, 2018; trade associations or an effective manner. The
Marychurch, 2006; Crumbley et foundations”. Several Australian accounting departments in the
al., 2016; Kleinman & universities are offering university level should offer
Anandarajan, 2011; Alshurafat et undergraduate majors/minors in curriculum based forensic
al., 2020). forensic accounting (Van accounting programs. Also,
Akkeren et al., 2013). In accounting firms and
Forensic Accounting Bangladesh, the Department of practitioners should support the
Curriculum Accounting & Information universities so that forensic
Systems of University of Dhaka accounting courses can be
Forensic accounting offers a full separate course on offered in an efficient manner.
researchers have also forensic accounting in the
recognized the topics necessary Master degree level. The According to Ahmad (2003), a
to be included in a forensic Nigerian study of Kumshe, Umar forensic accounting course
accounting course. As and Imam (2018) has suggested should be divided into three
mentioned earlier, many of the the forensic accounting components: (1) financial
universities in the USA and education in Nigeria is still statement preparation and
European countries have growing and emphasized on its analysis, (2) accounting
already introduced separate integration in accounting standards, companies act and
undergraduate and graduate curricula either as a part of other guidelines and (3) forensic

ARTICLE
educators and the professionals

agree that the demand for
forensic accountants are
increasing over time. They also
suggest that courses on forensic
accounting need to be included
in the current curricula.
Secondly, the extant studies
have emphasized on
introducing innovative teaching
methods (such as, case study
and experiential methods). The
traditional accounting teaching
methods may not work in
Thirdly, few of these studies
propose and illustrate some
frameworks for forensic
accounting curriculum. It has
accounting and financial fraud. integrated in the business been observed that universities
However, Matson (2016) curriculum. For them, teaching in different parts of the world
contend that a single course is the big data techniques can are offering forensic accounting
not enough to prepare students improve the quality of forensic courses at both undergraduate
for forensic accounting accounting education and and graduate level. Accounting
profession. Students need more ultimately have a positive researchers suggest various
coursework and practical impact on practice. Moreover, issues such as relevant laws,
exposures to forensic the forensic inspections get financial reporting, information
accounting. In order to be an better when the forensic technology, ethics and fraud
efficient forensic accountant, accountants are well versed theories and investigation
students may pursue with big data, data analytics and techniques need to be included
professional qualifications such algorithms (Kilic, 2020). in the curriculum.
as: (1) Master Analysts in
Financial Forensics (MAFF), (2) Conclusion The study has practical
implications for academics,
Certified Financial Forensics
The main objective of this study practitioners and policymakers.
(CFF), (3) Certified Forensic
is to provide an overview of the First, academic researchers get
Accountant (CrFA), or (4)
current state of forensic important insights about the
Certified Fraud Examiner (CFE)
accounting education from the alternative areas of forensic
(Matson, 2016).
global perspective. In order to accounting education for
Some studies have advocated fulfill this objective, a review of further study and exploration.
the inclusion of information some existing literature on Moreover, they can develop a
technology in the curriculum forensic accounting education separate module on forensic
(see for example, Rezaee and was conducted. The evidence accounting attributing contents
Wang, 2019; Kilic, 2020). Rezaee suggests that three issues are on skills, knowledge, real case
and Wang (2019) suggests that highlighted in the literature of stories, scope of the work etc.
forensic accounting and data forensic accounting education. As mentioned before, one of the
analytics (big data) need to be Firstly, the accounting prominent steps has been taken

by the Department of other non-assurance cases of financial frauds and

Accounting & Information consultancy services. Once accounting scandals, forensic
Systems, University of Dhaka in professional accountants accounting has already
this regard. It has introduced a acquire necessary knowledge established its prominence in
complete separate course on and skills, they can equally work the domain of business
Forensic Accounting and been as forensic accountants and education. Bangladesh is not an
taught at the MBA class for few fraud investigators. Apart from exception here. Bangladesh
years now. Second, the regular audit evidence, forensic government and regulatory
practitioners who get the most accountants can produce authorities should come
benefit from this new branch of important legal evidence that forward with policies that
accounting are professional can be justified a cause in the encourage the expansion of this
accountants: chartered court of law. Finally, the study is emerging accounting discipline.
accountants and cost and important for government and It will eventually help
management accountants in regulatory authorities as they Bangladesh in producing human
Bangladesh. Traditionally, need to conceive the resources necessary to minimize
independent professional significance of forensic the corporate frauds.
accountants are working as accounting education and
auditors for company and devise policies to support this The study is not free from
provide audit assurance and education. With the growing limitations though. The main

ARTICLE
Jones, C. G. & Dosanjh-Zucker,

K. (2018). Using a forensic
accounting novel to increase
student engagement with
accounting ethics and the
profession. Journal of Forensic
& Investigative Accounting,
10(2), 250–257.
Kilic, B. I. (2020). The effects of

big data on forensic accounting
practices and education.
Contemporary Issues in Audit
Management and Forensic
Accounting Contemporary
Studies in Economic and
Financial Analysis, 102, 11-26.
Kleinman, G. & Anandarajan, A.

(2011). Inattentional blindness
limitation is that it only Alshurafat, H., Beattie, C., Jones,
and its relevance to teaching
considers a limited number of G. & Sands, J. (2020).
forensic accounting and
literature on forensic accounting Perceptions of the usefulness of
auditing. Journal of Accounting
education. Moreover, it does not various teaching methods in
Education, 29(1), 37–49.
provide any empirical evidence forensic accounting education.
on forensic accounting Accounting Education, DOI: Kumshe, A. M., Umar, I. & Imam,
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studies are required in both accounting education in Nigeria:
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a review. SAJRED: Journal of
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empirically the nature, forensic accounting and fraud
Development, 1(1), 74-84.
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accountants. DiGabriele, J. A. (2012). A case
forensic accounting education.
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Accounting Research Journal,
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249-264.
accountant. Issues in
Ahmad, S. N. S. (2003). Accounting Education, 27(3), Lehmann, C. M. (2015). Asset
Developing expertise in forensic 751–759. misappropriation schemes:
accounting: forensic accounting Short cases for Use in the
courses in Malaysia. Paper Hidayat, S. E. & Al-Sadiq, A. A.
classroom.
Presented at the 4th Regional (2014). A survey on the need to
Anti-Corruption Conference of offer forensic accounting Journal of Forensic &
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Rezaee, Z & Wang, J. (2019). The

relevance of big data to forensic
accounting practice and
education. Managerial Auditing
Journal,34(3), 268-288.
Rufus, R. J., Miller, L. S. & Hahn,

W. (2015). Forensic Accounting.
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Forensic accounting: a blend of
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Cross-disciplinary assessment: Fraud Investigation (CPE Management and Forensic
bringing law students and Edition). USA: John Wiley & Accounting, 102, 245-264.
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Annual ALTA Conference – Prabowo, H. Y. (2013). Better, MacKenzie, K. (2013). A
“Legal Knowledge: Learning, faster, smarter: developing a metamorphosis of the
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Sheetz, M. & Silverstone, S.

ARTICLE
Audit Reporting Trend in Bangladesh:

Dr. Mohammad Istiaq Azim CA, CPA, CMA
I
t is a regulatory better compliance with
requirement that all the disclosure requirements, etc.
listed companies must This article aims to analyse the
get their financial statements audit opinions issued by the
audited by a Chartered audit firms for the companies
Accountant firm eligible for listed on the Dhaka Stock
auditing the listed companies in Exchange over the last five-year
Bangladesh. This list of audit period, i.e., year 2014–2018.
firms is being approved by the
Securities and Exchange Although the Companies Act
Commission (BSEC). The audit requires the preparation of
firm issue an audit report and financial statements according
they state whether the financial to IFRS and audited according
statements are prepared in to International Standards of
accordance with the Companies Auditing (ISA), there is
Act, specifically, whether the significant variation in the
The Author is a
Professor statements represent a true quality of audit reports. As part
Accounting and Finance picture of the business and of the corporate governance
North South University whether all the relevant mechanism, auditors are
accounting standards and other expected to enhance the quality
regulatory requirements have of reporting following the ISAs..
been followed. This process In the last half-century, demand
actually helps the company to has risen for greater
remain viable in a competitive accountability and closer
business environment and scrutiny of accounts. This is
ensure that its' financial specially evident in recent years
statements remain solid. following bank scandals such as
Despite the importance of Hallmark-Sonali Bank Loan
auditing, so far, no analysis has Scam, Basic Bank, Farmers Bank
yet been done on the types of and the 2010 - 2011 Bangladesh
opinions issued in Bangladesh. stock market crash due to fraud,
Specifically, no research has mismanagement, and lacking
been published yet in recent many governance issues. It is a
times when a number of general expectation of clients
significant incidents happened that the auditor will: (i) review
that might have an impact on and confirm that the financial
listed companies' reporting information is correct (true and
practices. Examples include the fair); (ii) information was
adoption of the International checked for, and no fraud exists;
Financial Reporting Standard and (iii) the business is a sound
(IFRS) in 2013, introducing the organisation for investment
new Financial Reporting Act in based on going concern
2015, an adaptation of a new assumption. However, the
format of auditor's report expectation gap is a reality.
effective from the beginning on Major issues associated with the
or after January 2018, affiliation expectation gap are: firstly, the
with Big-4 accounting firms for nature and meaning of audit

Qualified opinion is generally

issued in the following
circumstances:
• where a scope limitation

exists;
• where a disagreement is
evident between the auditor
and those charged with
governance;
• where a non-compliance
with applicable accounting
standards exists, that is
material but not extreme in
nature.
Disclaimer Opinion
report messages; secondly, the financial data is honest, true A Disclaimer Opinion is
detection and reporting of and fair. An Unqualified opinion expressed when the possible
fraud; and thirdly, early warning is expressed when the auditor effect of a limitation on the
of corporate failures (going has concluded that he/she has scope is so material and
concern issue). It is expected obtained a reasonable pervasive that the auditor is
that with the new format of the assurance that the financial unable to express an opinion on
audit report and the report is free from material the financial report. The opinion
introduction of the 'Key Audit misstatement, whether due to paragraph is generally headed
Matters' will reduce this fraud or error. 'Disclaimer of Auditor's Opinion'
apparent gap. (Gay and Simnett, 2019). The
Qualified Opinion
following circumstances give
Broad Categories of
The auditor expresses a rise to a Disclaimer Opinion:
Audit Opinions
Qualified Opinion when: firstly,
the auditor, having obtained • when the auditor is unable
Four broad categories of audit
sufficient appropriate audit to obtain sufficient
opinions are: Unqualified,
evidence, concludes that appropriate audit evidence
Qualified, Disclaimer and
misstatements, individually or in on which to base the
Adverse opinion.
aggregate, are material but not opinion, and the auditor
Unqualified Opinion pervasive to the financial report; concludes that the possible
or secondly, the auditor is effects on the financial
Unqualified Opinion is the best unable to obtain sufficient report of undetected
opinion an entity may receive. appropriate audit evidence on misstatements, if any, could
This type of opinion is which to base the opinion. be both material and
expressed when the auditor is However, the auditor concludes pervasive.
satisfied that the financial report that the possible effects on the
in all material respects has been • When, in extremely rare
financial report of undetected
prepared in accordance with the circumstances involving
misstatements, if any, could be
Companies Act 1994 and that multiple uncertainties, the
material but not pervasive. The

ARTICLE
report. This matter is generally

included in the notes to the
financial statements. It is
important to note that the
Emphasis of the matter is not a
qualification, so steps need to
be taken to ensure that this is
communicated to the audit
report user.
Other Matter
Other matter paragraph

included in the auditor's report
refers to a matter other than
those presented or disclosed in
the financial statements that are
relevant to users' understanding
of the audit. Other matter
paragraph is added to the
auditor concludes that, incomplete nature of the
auditor's report after the
notwithstanding having financial report. The opinion
opinion paragraph.
obtained sufficient paragraph is headed "Adverse
appropriate audit evidence Auditor's Opinion". Other than
Analysis of Audit
regarding each of the these four, based on the
Opinions Issued for the
individual uncertainties, it is circumstances, the auditor can
Listed Companies in
not possible to form an also extend his/her opinion with
Bangladesh
opinion on the financial 'Emphasis of matter' and 'Other
report. This is due to the Matter'. These are additional Unqualified audit report is the
potential interaction of the paragraphs which the auditor most common type of audit
uncertainties and their might add if he/she thinks it is report issued in any countries.
possible cumulative effect essential to draw the user's Bangladesh is no exception to
on the financial report. attention to them. this. As shown in Table,
Unqualified Opinion was the
Adverse Opinion Emphasis of Matter (EOM)
most common type of opinion
given by auditors in Bangladesh,
An Adverse Opinion is generally In some circumstances, the
ranging from 90.86% (in 2014)
issued when the auditor, having auditor may issue an Unqualified
to 95.43% (in 2016). Of this
obtained sufficient appropriate Opinion with EOM or a Qualified
number, Unqualified with EOM
audit evidence, concludes that Opinion with EOM. The
range from 2.69% (in 2014) to
misstatements, individually or in Emphasis of matter paragraph
9.72% (in 2018) and Unqualified
aggregate, are both material was introduced to draw
with OM range from 0.91% (in
and pervasive to the financial attention to certain issues in the
2016) to 4.15% (in 2015).
report. Subsequently, the financial report. This type of
Qualified reports taking 4.57%
auditor concludes that the opinion may be issued in
(in 2017) to 9.14% (in 2014).
Qualification of the auditor's circumstances where the
There is no Qualified with EOM
report is not adequate enough auditor wishes to highlight a
and OM reports issued in 2014
to disclose the misleading or matter affecting the financial
and 2015. Only four (1.83%), five

Table: Types of Audit Opinion Issued in Bangladesh (2014-2018)
2014 2015 2016 2017 2018

Unqualified 160 159 194 168 199
86.02% 82.38% 88.58% 85.71% 80.57%
Unqualified with EOM 5 9 13 12 24
2.69% 4.66% 5.94% 6.12% 9.72%
Unqualified with OM 4 8 2 7 9
2.15% 4.15% 0.91% 3.57% 3.64%
Total Unqualified 169 176 209 187 232
90.86% 91.19% 95.43% 95.41% 93.93%
Qualified 17 17 6 4 10
9.14% 8.81% 2.74% 2.04% 4.05%
Qualified with EOM 0 0 4 5 3
0 0 1.83% 2.55% 1.21%
Qualified with OM 0 0 0 0 2
0 0 0 0 0.81%
Total Qualified 17 17 10 9 15
9.14% 8.81% 4.57% 4.59% 6.07%
Adverse 0 0 0 0 0
0 0 0 0 0
Disclaimer 0 0 0 0 0
0 0 0 0 0
Total number of audit reports 186 193 219 196 247
(2.55%) and three (1.21%) The Table also shows that from issued any disclaimer or adverse
companies received Qualified 2014 to 2018, Unqualified audit report in our sample
with EOM in 2016, 2017 and reports with EOM are gradually period between 2014–2018. The
2018, respectively, and only one increasing. This is the period issue is explored further
(0.81%) company received when some major changes industry by industry and found
Qualified with OM in 2018. happened: introducing the new some clear cases where the
Financial Reporting Act in 2015; auditor could have issued a
These findings conclude that, on adaptation of the new format of Disclaimer or Adverse report,
average, in 93% of cases, the auditor's report effective from but only one Qualified report
auditors have been able to 2018; and probably auditors emerged. We discussed this
secure sufficient and become more conservative with a number of practising
appropriate evidence to support when they issued Unqualified auditors and found it is a
the financial reports being reports. Again, the percentage common practice in Bangladesh
prepared. Those have been of Unqualified opinion was not to issue any Adverse or
done so in accordance with the between 80.57% (in 2015) to Disclaimer report. Instead, it is
appropriate accounting 88.58% (in 2016). left to the company to find a
framework, relevant corporation suitable auditor who might be
legislation and international Conclusion willing to compromise on
accounting standards. quality.
This article provides some
Surprisingly, there is no Adverse
insights into the common types If the auditor issues an Adverse
or Disclaimer report issued
of audit opinions issued in or Disclaimer opinion, there is a
during this period (2014–2018).
Bangladesh. No audit firm high chance of losing the clients.

ARTICLE
upgrade the quality of chartered

accountants through training
and continuous professional
development seminars. The
ICAB needs to address the
issues. Educational
requirements need to be
IT
broadened but also tightened
U D
A ORT
up with contemporary
knowledge like block chain,
REP
robotic process automation,
data analytics, artificial
intelligence, etc. This can be
done by providing exemptions
in education requirements to
reputed universities and also
attract bright students to the
profession. Again, BSEC needs
to seriously review its selection
Also, the socio-cultural realities firms for clients, which we found criteria for auditors and select a
of Bangladesh do not allow as justified because it affects rigorous benchmark. Finally, it
them to issue an audit modified opinions issued to listed needs to encourage auditors to
opinion in the form of an companies in Bangladesh. If a exercise their independence if
Adverse or Disclaimer. big audit firm is unwilling to they are to perform their jobs
According to these expert issue a preferred opinion for honestly and produce
opinions, stakeholder pressure clients, then the latter can high-quality audit reports.
makes even the issuing of a switch to small audit firms
Qualified opinion difficult. because the BSEC does not References
have any benchmark guidelines
Another reality that affects with Annual Reports from Company
for auditors to adhere to.
regard to issuing an opinion in website. Available from:
Bangladesh, is a list of selected It is also noticed that Company Listing | Dhaka Stock
auditors by the Bangladesh competency of auditors affects Exchange (dsebd.org)
Securities Exchange the integrity and quality of audit
Gay, G. & Simnett, R. (2019).
Commission (BSEC). When opinion in Bangladesh. Institute
Auditing & Assurance Services
noticed at the BSEC approved of Chartered Accountants of
in Australia (7th ed.).
lists of audit firms, it is apparent Bangladesh (ICAB) is the
McGraw-Hill.
that big audit firms are authority to regulate the
competing with the new audit accounting profession and

In the Digitalized Business World the
Implication of using Automation Spectrum
S.M. Rafiqul Islam FCA
I
ntroduction world, no matter whether one is
a crow or a man.” --- Baum, L. F.;
According to IIA,” Internal The Wonderful Wizard of Oz,
auditing is an independent, George M. Hill Company, USA,
objective assurance and 1900.
consulting activity designed to
add value and improve an Thus microscope, telescope and
organization’s operations”. For brain imaging equipment are
senior management including few examples that provide new
Board of Directors, there is no digital tools and software such
alternative other than internal as machine learning model
audit department viz-a-viz risk architecture to inspect complex
management department to see system for the purpose of
the value of it by aligning accelerating discovery.
organization’s strategy directly
with audit report findings. It Now I believe you got the point.
The Author is a
works as third line of defense of Yes, we are talking about the
Fellow Member of the Institute of
the organization irrespective of Automation Spectrum. Now it is
Chartered Accountants of
Bangladesh (ICAB) the size -- large or small time for internal auditor to
following the traditional method understand and prioritize
that mandated detective and opportunities for automation
compliance control since its spectrum (Figure-1), and take
inception. important steps to prepare for
thoughtful and progressive
Understanding the deployment of it to help drive
Automation Spectrum efficiency and effectiveness,
and its Magnitude in the expand capacity, boost quality
Modern Business World and enable greater audit
coverage.
The world is changing faster
than anyone could have It is worth mentioning here that
visualized at the beginning of AI and machine learning (ML)
the 21st century because of algorithms are used in cyber
Internet. It has become a security to measure heuristics
collective parent to a new form and report possible breaches
of decision-making entity and incidents. The scientific
co-opting with the changed community is using AI for data
scenario of global business analysis in the case of COVID-19.
pattern. This would lead to quality
enhancements, risk reductions
Wise words: “Brains are the only and time savings--- thereby
things worth having in this increasing risk intelligence.

ARTICLE
Figure-1
Automation Spectrum
Foundation Analytics Robotic Cognitive intelligence
Data Predictive Robotic process Natural language
integration analytics automation generation
Applications that accept
Integrated data to Software solutions using Rules-based systems that structured data inputs
provide a consistent predictive models mimic human behavior to generate seemingly
information foundation (e.g., compliance risk models) to automate parts of unstructured narratives
repeatable processes
Data Natural language
visualization processing
Applications that process
Software placing data unstructured data (e.g., text)
in a visual context and allow querying and
(e.g., GRC dashboards) generation of structured data
Machine learning
Applications that are able
to improve predictability and
operation based on data
they receive over time
Artificial intelligence
Applications that are able to mimic
human behavior, such as visual
perception, speech
recognition,
decision-making, and
translation
between languages
Source: Deloitte
Benefits of Embedding higher-value activities, such ensuring higher quality

Automation as quality assurance output due to the
reviews, exception systematic nature of the
Here are a few examples of how management, process process.
investments in automation improvement, and
technologies can yield positive interpersonal interactions. • It enables continuous
returns by improving the auditing model for
effectiveness and efficiency of • It can help to increase providing business insights
audit processes and providing efficiency and reduce costs and analysis and hence add
greater insight to the business: by executing audit tasks more business value.
around the clock at an
• Automation can ensure accelerated pace There are many ways in which IA
better use of scarce can leverage automation
• It enables performance of capabilities throughout the
resources by replacing
the tasks in more uniform audit life cycle, including risk
manual activities, and
assessments, audit planning,
thereby allowing the team and efficient manner which
fieldwork, and reporting
members to focus on are traceable and auditable
(Figure-2).
subsequently and thereby

Figure 2. Leveraging Advanced Analytics and Automation acrossInternal Audit

Analytic Techniques & Robotic Process Natural Language Natural Language
Dashboards Automation Processing Generation
Key Activities
Risk Audit Planning Design Fieldwork Reporting / Issue Tracking /
Assessment Effectiveness Closing Risk Assessment
Assessment Ongoing
Monitoring
Establish the audit Communicate Perform detailed audit Hold opening meeting Produce audit report
entity universe intention to audit planning overview Utilize history of
Create operational issues tracking to
Assess completeness Conduct Develop testing effectiveness testing Review issues in develop insights
of audit universe introduction/scoping strategy (OET) work papers the report through trends
meeting and analysis and KPIs
Analyze risk profile of Review and approve execute testing in Conduct overall
the audit entity Complete audit design effectiveness accordance with the assessment Establish continuous
planning assessment (DEA) OET strategy Auditing
Identify audit needs memorandum (APM) Draft audit report
and develop audit Evaluate operating
plan Develop process effectiveness of key Issue final audit report
understanding controls
Conduct business Perform audit folder
monitoring Identify inherent risks Draft issues closure
and key controls
Analyze audit budget
Complete risk control vs actual
Conduct audit team

debrief
Update risk
Assessment
Representative Tasks
Automation of IA Population testing Automated generation Real-time reporting of
IA compliance risk Automation of tasks of text-based audit frauds arising in
assessment text-heavy documents Data aggregation and reports financial systems
Data modeling and integration
Location risk Profile business batched reporting Data visualization / Enhanced
assessment operations Intelligent detection of audit story board dashboarding and
visualization suspicious logs reporting
Exploratory analytics associated with IT Impact quantification
Cross business and "what-if" analysis systems Thematic risk
unit/region identification
comparative and flux
analysis CAE dashboard
Issue tracking
Continuous business visualization
operations monitoring
Analytic Techniques
Risk assessment & Dashboards
dashboard
Robotic Process
Automation Natural L
Source: Deloitte

ARTICLE
However, automation does not wherever we need to go yet. To that is leadership support from
come without issues or handle the grumble of the top of the organization since
fallbacks. Among the myriad of automation, we need to IT connects and interacts with
ethical and social dilemmas we understand the substance of so many different areas of the
face with the creation and audit readiness initiatives-- the organization with
implementation of automation, goal of which is to make things representation from functional
one of the most prevalent issues work better. Audit readiness areas including financial
is undesirable results. For means that controls— including controls, operations, internal
example: Google recently IT-related controls—become audit, and roles within IT itself
apologized for its AI image more effective, and financial (e.g., security and data
labeling algorithm having reports are more reliable and specialists) etc.
produced racist results by accurate. To achieve such goal it
labeling a dark-skinned hand is inevitable to link the testing of To address the said gray area,
holding an infrared data response to underlying automation spectrum offers
thermometer as a gun while a risks and controls which are many opportunities for
version of the same picture with designed to address risks at enterprises to get ahead and
the hand painted a lighter color many levels and they can stay competitive, but they also
was labeled as a monocular.1 become increasingly detailed expose enterprises to new sets
(micro) to reflect specific of risk factors. Managers must
Therefore, if we are unaware of possibilities and vulnerabilities. do their homework, be diligent,
these behaviors and biases, and and clearly understand the
they can be difficult to Under such circumstances we benefits and added value before
acknowledge. Thus, we cannot need to emphasize another considering the automation ---
simply hand the keys over to critical component as a part of say RPA and AI put into
automation and let it take us better optimization strategies operation. Implementing robots

structures. Transforming the

organization, and the
risk/control management
functions, in a way that is
deliberate and controlled is
critical to achieving strategic
objectives. Automation can
assist IA to generate and
standardize data to run custom
analytics, automate the initial
data gathering and
classification for the annual risk
assessment process, test of
details that consist of data fields
matching from one source to
the other, and automate
controls testing thorough bots.
In addition, automation can
assist in tracking outstanding
to perform mundane and well-defined governance evidence, follow-up requests
time-consuming tasks provides procedures is of utmost and management responses.
employees with opportunities to importance to oversee the
The IA department can save
focus their time, energy and implementation and operation
important man hours by
effort on more strategic, of automation, provide
employing automation to
high-value activities consistent assurance of the quality of the
perform a number of repetitive
with the enterprise’s mission, automation and minimize the
tasks discussed here. This can
goals and objectives. chance of an unfavorable
help IA to focus on unique,
impact on the enterprise. Only
On the other hand, challenges, important tasks to achieve a
by understanding, preparing for
risk factors and obstacles must deeper, more sophisticated
and addressing these factors
also be studied in detail and analysis of risk as part of the
can enterprises capitalize on
tackled in an effective and audit process.
automation and expand its
efficient manner. Procedures usage.
1 Kayser-Bril, N.; “Google
must be established to ensure
Apologizes After Its Vision AI
that the automation is aligned Conclusion
Produced Racist Results,”
with the enterprise’s goals and
As organizations adopt new Algorithm Watch, 7 April 2020,
objectives, management is on
technologies and embrace new https://algorithmwatch.org/en/s
board from day one, and
business models, they also need tory/google-vision-racism/
relevant personnel possess the
necessary technical knowledge. to evolve their culture, working
The establishment of practices and organizational

ARTICLE
A Snapshot of some Trends in

Corporate Governance in South Asia
in Reference with Bangladesh
Arif Hossain FCA
E
xecutive Summary (i) binding provision in
company legislation
In South Asia, important regulating the basic
steps have been taken during governance architecture of
the last 15 years toward the companies, directors’
improvement of national duties, shareholder rights
regulatory frameworks and the and minority shareholder
development of effective protection mechanisms; and
corporate governance soft law as-
structures. They were driven by:
(ii) best practice standards set
(i) International initiatives such out in corporate governance
as the Organization for codes.
Economic Co-operation and
D e v e l o p m e n t This pattern of flexible
(OECD)–Asian Roundtable regulation of the conflicts of
on Corporate Governance, interest was prevalent in
The Author is a
Chartered Accountant and which set out an ambitious corporations began in the
Fellow Member of the reform program in its 2003 United States in the early 1970s
Institute of Chartered Accountants white paper on corporate which were backed up by
of Bangladesh-ICAB governance in Asia; statements regarding the role
and and responsibilities of directors
DGM (Accounts & Finance) (ii) World Bank, which monitors issued by the Business
Ha-Meem Group the implementation of Roundtable, the National
international standards on Association of Corporate
corporate governance; Directors, and the Council of
Institutional Investors.
(iii) International financial
institutions that have Since then, private
devised, under the auspices organizations, stock exchanges,
of the International Finance and some large institutional
Corporation (IFC), a investors or associations of
common methodology for investors in most developed and
assessing corporate developing economies have
governance in investee produced increasingly detailed
companies; and sets of best practice standards
containing provisions on board
(iv) National governmental composition, independence
bodies and private sector requirements for outside
associations. directors, committees of the
board, and the role of
Corporate Governance shareholders. In some countries,
Frameworks these standards have been
incorporated into the listing
Introduction rules of stock exchanges and
are, accordingly, binding on
Corporate governance is companies listed in prime
typically regulated by a market segment. in others they
combination of hard law, such operate on a comply-or-explain
as: basis.

Corporate governance codes

exist in most, but not all,
member countries of the South
Asian Association for Regional
Cooperation (SAARC). Table 1
gives an overview of the most
recent initiatives.
Measures of good governance

in the protection of minority
interest
The goal of corporate

governance, according to the
World Bank and most national
TRADING
policy makers is “the protection
ACROSS
BORDERS of minority investors”. The
World Bank in its Doing
Business reports measure good
governance as an aggregate of
six elements:
Table 1: Corporate Governance Codes in SAARC Member Countries

ARTICLE
(i) review, approval, and are concerned following issues (vi) the mechanisms facilitating
disclosure of requirements were considered: the enforcement of best
of related party practice standards.
transactions; (i) the proportion of
nonexecutive to executive These best practice standards
(ii) ability of minority directors on the board; have to be assessed against the
shareholders to sue and backdrop of the binding legal
hold interested directors (ii) the number of independent and general institutional system.
liable for prejudicial directors; Hence, the country reports also
related-party transactions; evaluate
(iii) the definition of
(iii) ease of filing a minority independence; (i) the legal rights of
shareholder lawsuit shareholders to appoint and
(derivative action), (iv) the separation of the two remove directors,
central roles on the board,
(iv) shareholder rights in major that of chair and chief (ii) the structure of directors’
corporate transactions, executive officer (CEO); duties,
(v) governance of safeguards (v) the delegation of sensitive (iii) the enforcement of these
protecting shareholders issues involving particularly duties by minority
from undue board control pronounced conflicts of shareholders on behalf of
and entrenchment, and interest to independent the company, and
committees, including
(vi) extent of corporate succession planning, (iv) the nonlegal institutional
transparency. responsibility for the review determinants of the
of internal control effectiveness of the above.
The World Bank carried out an procedures and the Other complementary or
assessment of four SAARC appointment of the external functionally equivalent
economies with their findings auditor, and remuneration regulatory institutions, for
being summarized in Table 2. As decisions; and example, disclosure
far as best practice standards regulation and the activities
Table 2: Minority Investor Protection Index (0-10)

by the BSEC by virtue of its

authority to “impose conditions”
under Section 2CC of the
Securities and Exchange
Ordinance, 1969. Although the
code itself does not mention
penalties for noncompliance,
the Securities and Exchange
Ordinance, 1969, Section 22(b)
contains penalties for
noncompliance with an order or
direction of the BSEC. No
“explain” provision is found in
the code. Government
regulators for corporate
governance in Bangladesh are
the Registrar of Joint Stock
Companies and Firms, the
BSEC, and Bangladesh Bank,
the central bank of Bangladesh.
Nongovernment regulators are
the Institute of Chartered
Accountants of Bangladesh,
Chittagong Stock Exchange,
and Dhaka Stock Exchange.
Board Structure
Table 3 gives an overview of the

regulation of corporate boards
in Bangladesh along the five
dimensions that section
identified as critical in ensuring
that boards operate as an
effective, independent control
mechanism. The table also gives
information on the manner in
which the regulatory
and powers of public and regulated by the requirements are enforced, in
regulatory bodies, are Companies Act, 1994. The act is particular whether companies
outside the scope of this supplemented by a Corporate can deviate from them,
articles. Governance Code, the most provided they give an
recent edition issued in 2018 by explanation of their
Bangladesh the Bangladesh Securities and noncompliance; or the board
Exchange Commission (BSEC). structure framework is laid
Overview of the Regulatory The code does not operate on a down in binding regulations.
Framework “comply-or-explain” basis, but is The provisions are contained in
binding on all companies falling the Corporate Governance
Companies are incorporated within its remit. It was published Code, 2018.

ARTICLE
Table 3: Board Structure Regulation in Bangladesh

Some Corporate (i) Audit Committee; and Secretary (Chartered

Governance Features in Accountant or Cost and
Existence in Various (ii) Nomination and Management Accountant or
Rules and Legislation Remuneration Committee. Chartered Secretary) other
than its statutory auditors
Governance of Board of Audit Committee- or audit firm on yearly basis
Directors of Subsidiary regarding compliance of
Company- (1) Responsibility to the Board conditions of Corporate
of Directors. Governance Code of the
(a) Provisions relating to the Commission and shall such
composition of the Board of (2) Constitution of the Audit certificate shall be disclosed
the holding company shall Committee in the Annual Report.
be made applicable to the
(3) Chairperson of the Audit (2) The professional who will
composition of the Board of
Committee provide the certificate on
the subsidiary company;
compliance of this
(4) Meeting of the Audit
(b) At least 1 (one) independent Corporate Governance
Committee
director on the Board of the Code shall be appointed by
holding company shall be a the shareholders in the
(5) Role of Audit Committee
director on the Board of the annual general meeting.
subsidiary company; Reporting of the Audit
(3) The directors of the
Committee
(c) The minutes of the Board company shall state
meeting of the subsidiary (a) Reporting to the Board of whether the company has
company shall be placed for Directors complied with these
review at the following conditions or not.
Board meeting of the (b) Reporting to the Authorities
holding company; Some Corporate
(c) Reporting to the Authorities Governance Features in
(d) The minutes of the the Legislation
respective Board meeting of Nomination and Remuneration
the holding company shall Committee (NRC). Appointment and Removal of
state that they have Directors
reviewed the affairs of the (1) Responsibility to the Board
subsidiary company also; of Directors According to Section 91 of the
Companies Act, 1994, the
(e) The Audit Committee of the (2) Constitution of the NRC directors of a company are
holding company shall also elected by the shareholders
review the financial (3) Chairperson of the NRC from among them in general
statements, in particular the meeting. Section 106 of the
investments made by the (4) Meeting of the NRC Companies Act, 1994 provides
subsidiary company. that a company may, by
(5) Role of the NRC extraordinary resolution,
Board of Directors’ remove any
Committee- Reporting and Compliance of shareholder-director before the
Corporate Governance. expiration of his or her period of
For ensuring good governance office with or without cause,
in the company, the Board shall (1) The company shall obtain a and may, by ordinary resolution,
have at least following certificate from a practicing appoint another person in the
sub-committees: Professional Accountant or same position.

ARTICLE
Further, pursuant to Section 131,

directors must abstain from
voting on any contract or
arrangement in which they are
directly or indirectly interested,
and their presence does not
count for the purpose of
forming a quorum.
Minority Shareholders’
protection
The Companies Act, 1994

provides for certain functions to
be undertaken by the
shareholders, such as attending
meetings, appointing and
removing directors, and
Directors’ Duties Related-Party Transactions exercising their right to obtain
financial information, as well as
The Companies Act, 1994 does The Companies Act, 1994 approving annually the balance
not lay down the duties of a requires related-party sheet. The law also provides for
director. However, the act transactions to be disclosed and certain mechanisms for
contains a number of provisions interested directors to abstain shareholders to enforce these
aimed at checking the neglect from voting on such rights, the principal among
of duties by a director, and a transactions. More specifically, them being a suit for minority
breach of these provisions will Section 130 provides that a protection under Section 233 of
entail liability. In particular: director, who is directly or the act. According to Section
indirectly concerned or 233, members or debenture
• Section 104 prohibits a interested in a contract or
director from holding any holders of a company may
arrangement entered into by or lodge an application with the
office of profit under the
on behalf of the company, must High Court claiming that:
company except that of a
disclose the nature of his or her
managing director,
interest at the meeting of the a. the affairs of the company
manager, or a legal or
directors dealing with the are being conducted or the
technical adviser or banker.
contract or arrangement (a powers of the directors are
• Section 105 provides that general notice that a director is being exercised in a manner
except with the consent of a director or a member of any prejudicial to one or more of
the directors, a director of a specified company or of a its members or debenture
company, or the firm of specified firm, and is to be holders, or in disregard of
which he is a partner, or any regarded as interested in any
his or her, or their interest;
partner of such firm or the subsequent transaction with
private company of which that firm or company, is b. the company is acting or is
he is a director or member, sufficient). The company must likely to act in a manner
shall not enter into any keep a register of all
which discriminated or is
contract for the sale, transactions with a director,
likely to discriminate against
purchase, or supply of which must be open to
the interest of any member
goods and materials of the inspection by any member of
or debenture holder; or
company. the company.

c. a resolution of the shares to file an application Code (adopted in 2018) as a

members, debenture constitutes a significant barrier benchmark. The UK is generally
holders, or any class of them to minority protection. Further, regarded as being at the
has been passed or is likely the application under Section forefront of developments in
to be passed, which 233 can only be moved in the corporate governance since it
discriminates or is likely to Company Bench of the High promulgated the world’s first
discriminate against the Court, where legal costs are corporate governance code in
interest of one or more of generally high. The 1992. The UK Corporate
the members or debenture effectiveness of the minority Governance Code is updated
holders. protection regime is further regularly, usually every 2 years,
called into question by the fact and its best practice standards
The minority suit can be that the judiciary suffers from have influenced standard
brought by shareholders considerable backlogs and setters worldwide. Indeed, in the
holding at least 10% of the cases are often pending for South Asian countries’ analysis
shares issued. Upon application several months before a hearing. here, concepts pioneered by UK
by the minority shareholders, if codes, for example, the
the High Court is of the view Conclusion independent director and the
that the interest of the minority definition of independence,
shareholders is being Corporate governance have, by and large, been
prejudicially affected, it has the frameworks in South Asia have adopted faithfully.
power to make the following undergone a process of
orders: comprehensive modernization Reference
over recent years. In all member
(i) cancel or modify any countries of the South Asian https://dailyasianage.com/news
resolution or transaction, Association for Regional /200124/corporate-governance
Cooperation (SAARC), except -practices-in-bangladesh#:~:tex
(ii) regulate the affairs of the Afghanistan, Bhutan, and Nepal, t=Since%20corporate%20gover
company to ensure that the corporate governance codes nance%20also% 20provides,
order of the court is being have been adopted. The codes smoothly%20functioning%20of
enforced, or surveyed for this study are %20corporate%20disclosure.
generally comparable to
(iii) amend any provision of the internationally accepted https://www.sec.gov.bd/slaws/C
memorandum or articles of standards of best practice in orporate_Governance_Code_10.
the company. corporate governance 06.2018.pdf
(although they do, in certain
Although minority shareholders aspects, fall short of these https://www.sec.gov.bd/slaws/C
are given protection under benchmarks). In order to orporate_Governance_Code_10.
Section 233, the provision has illustrate where the codes in 06.2018.pdf
remained of limited relevance. force in South Asia (and Nepal’s
Shareholders are often not https://openknowledge.worldba
Companies Act) conform to, or
aware of Section 233 and the nk.org/handle/10986/25191
diverge from, international best
minority protection regime. In practice standards, we use the
addition, the holding of a most recent United Kingdom
minimum 10% of the issued (UK) Corporate Governance

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ACCOUNTANCY JOURNAL IN
BANGLADESH
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he Institute of Chartered Accountants of Bangladesh (ICAB) is the
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GLOBAL
RECOGNITION
OF ICAB
Recognition of ICAB membership by ICAEW
Membership Scheme of The Institute of Chartered Accountants of England and Wales (ICAEW) allows the members of ICAB to apply
for ICAEW membership based on their experiences.
Eligibility criteria of this membership scheme are a series of questions which assess ICAB Member’s experience, achievements, skills
and expertise. Each application must be supported by an eligible sponsor. Applicants need to complete an Examination of Experience.
Details of ICAEW Membership Scheme is available at http://www.icaew.com/membership/becoming-a-member/
members-of-other-bodies/ campaigns/pathways-to-membership.
ICAB signed it’s first Memorandum of Understanding (MoU) with the Institute of Chartered Accountants in England and Wales (ICAEW)
in 2009. Since them, ICAB has been working with ICAEW as the learning and professional development partner, and also recognized
as an approved tuition provider of ICAEW.
As per MoU, ICAB Members can be the members of ICAEW after successful completion of 04 papers out of 15. These members have
the opportunity to apply for UK Practicing Certificate (PC) subject to meeting the standard ICAEW PC requirement.
Recognition of ICAB Membership by CIPFA, UK

Members of the Institute of Chartered Accountants of Bangladesh (ICAB) are eligible to apply for membership of the Chartered
Institute of Public Finance and Accountancy (CIPFA), a globally recognised membership body for the public sector.
An MoU between ICAB and CIPFA, UK was signed on 28 January 2017. Under this MoU, an ICAB member can also become a members
of CIPFA subject to fulfillment of certain criteria.
An ICAB Member with good standing having five or more years post-qualification public sector experience are eligible for Full
Membership of CIPFA as Chartered Public Finance Accountant (CIPFA) and the members having fewer than five years
post-qualification public sector experience are eligible as Affiliate member of CIPFA (CIPFA Affiliat).
ICAB members having CIPFA Affiliate membership, or having no working experience in public sector can gain CIPFA status with the
successful completion of exams of only two papers i.e. Public Sector Financial Reporting and Strategic Public Finance.
Membership Pathways Agreement (MPA) with CPA Australia

The Institute of Chartered Accountants of Bangladesh (ICAB) has recently signed a Membership Pathways Agreement (MPA) with CPA
Australia, one of the largest accounting bodies around the world. Through this agreement, ICAB members can be the members of CPA
Australia just after passing 04 papers (i.e. 1. Ethics and Governance, 2. Financial Reporting, 3. Global Strategy & Leadership and 4.
Strategic Management Accounting) out of their 12 papers. This MPA has been in effect since 20 July 2018.
Membership through Chartered Accountants Australia &

New Zealand (CA ANZ) International Pathway Program (IPP)
The Institute of Chartered Accountants of Bangladesh (ICAB) signed an MoU with the Chartered Accountants Australia & New Zealand
(CA ANZ). Under this, ICAB members living in Australia or New Zealand having five years post qualification experience at anywhere will
be eligible to be member of CA ANZ after successful completion of CA ANZ International Pathway Program (IPP).
There will be no requirement of passing CA ANZ general route examinations by eligible ICAB members as their International Pathway
Program (IPP) workshop through case studies would examine the contemporary Australasian business, accounting and finance
environment relevant for members of ICAB. On the other hand, CA ANZ members can also be members of ICAB subject to having
Bangladeshi citizenship and other requirements as prescribed by ICAB Bye-laws.
Membership of the International Valuation Standards Council (IVSC)

Efforts are underway for ICAB to Become a member of the International Valuation Standards Council (IVSC). This would create an
opportunity for the members of ICAB to involve in the valuation process of local and foreign investment in Bangladesh.
This would allow Chartered Accountants to put up their highly essential services and play positive roles in attracting foreign
investment. With regard to this, ICAB has already conducted a Members Conference. More so, a virtual meeting with the CEO of IVSC
was held on 8 June 2021 where the IVSC proposed ICAB to become member of IVSC on pro-rata basis.
Other Memberships
ICAB is an active member of International Federation of Accountants (IFAC), Confederation of Asian and Pacific Accountants(CAPA)
and South Asian Federation of Accountants (SAFA). ICAB is also an associate member of Chartered Accountants Worldwide (CAW).
www.icab.org.bd

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THE BANGLADESH January - March 2021

LDC Graduation of Bangladesh: Challenges and Opportunities

EDITORIAL BOARD CONTACT US

JANUARY - MARCH 2021 | The Bangladesh Accountant 1

In the quarterly journal, articles of

The monthly news bulletin

P21 World Countries:

P25 Macro-Economic Aspects:

P31 Forensic Accounting Education:

2 JANUARY - MARCH 2021 | The Bangladesh Accountant

P42 Audit Reporting Trend News & Events

P48 In the Digitalized Business

P53 A Snapshot of some Trends in

JANUARY - MARCH 2021 | The Bangladesh Accountant 3

community for 4 (four) Issues in a year is not

4 JANUARY - MARCH 2021 | The Bangladesh Accountant

JANUARY - MARCH 2021 | The Bangladesh Accountant 5

6 JANUARY - MARCH 2021 | The Bangladesh Accountant

8 JANUARY - MARCH 2021 | The Bangladesh Accountant

Criteria Threshold Progress Target

Criteria Threshold Bangladesh’s Score

Human Asset Index (HAI) 66 or above 73.2

JANUARY - MARCH 2021 | The Bangladesh Accountant 9

Bangladesh Profile: UNCDP’S

Criteria Threshold Bangladesh Score

GNI Per Capita Average of US$ 1,230 or above US$ 1,827

Economic Vulnerability Index (EVI) 32 or below 27.27

Human Asset Index (HAI) 66 or above 75.33

10 JANUARY - MARCH 2021 | The Bangladesh Accountant

through FTA/RTAs with

JANUARY - MARCH 2021 | The Bangladesh Accountant 11

during the phasing out of

Though Bangladesh will face

12 JANUARY - MARCH 2021 | The Bangladesh Accountant

Challenges Faced by Banks and Non-Bank

JANUARY - MARCH 2021 | The Bangladesh Accountant 13

NBFIs severely affect

14 JANUARY - MARCH 2021 | The Bangladesh Accountant

expiry the rescheduled periods,

“Hallmark Scam” of BDT

JANUARY - MARCH 2021 | The Bangladesh Accountant 15

Source: CPD Report

16 JANUARY - MARCH 2021 | The Bangladesh Accountant

considering the existing

The revenues and net-earnings

JANUARY - MARCH 2021 | The Bangladesh Accountant 17

However, Banks and NBFIs

18 JANUARY - MARCH 2021 | The Bangladesh Accountant

Defilement of corporate ethics

JANUARY - MARCH 2021 | The Bangladesh Accountant 19

conducting banks’ daily Local investors need to be Conclusion

20 JANUARY - MARCH 2021 | The Bangladesh Accountant

Masih Malik Chowdhury FCA

JANUARY - MARCH 2021 | The Bangladesh Accountant 21

22 JANUARY - MARCH 2021 | The Bangladesh Accountant

JANUARY - MARCH 2021 | The Bangladesh Accountant 23

Source: WB group, CIA, ADB websites.

24 JANUARY - MARCH 2021 | The Bangladesh Accountant

JANUARY - MARCH 2021 | The Bangladesh Accountant 25

the tax net rather than setting

He said, "It is not humane to give

Giving an example of how

26 JANUARY - MARCH 2021 | The Bangladesh Accountant