Interview Questions

Public Sector Accounting in Bangladesh: Practices and Issues

1. What are the existing practices of Public Sector Accounting (PSA) in Bangladesh?
i. What are the present practices of Public Sector Accounting (PSA) in Bangladesh? What are the
reports/accounts/statements that are prepared in public sector?
ii. What are the institutional factors/barriers that affect the development of accounting practices in
Bangladesh?
iii. Are there any factors or pressures that might control the authorities in setting up the policies and
procedures? Can you give more details please?
iv. How does the competing institutionalized logic in the area of PSA shape the nature of accounting
regulation, current structure and practices?
v. Is there any role played by culture or society in setting up the rules or applying PSA guidelines in
Bangladesh?
vi. How do you legitimate the existing PSA practices? Do institutions (Government, Ministries,
Divisions, Districts, and Upazila level) follow the rules and standards properly?
vii. What is the present status of accounting reform to convert existing practices as per the
requirement of IPSAS adoption in Bangladesh?

2. What are the problems and challenges in the current Public Sector Accounting in Bangladesh?

i. What are the problems, and obstacles you are facing in the current practices of PSA in
Bangladesh, and how these problems can be resolved?
ii. What are the reasons for not applying IPSAS in Bangladesh?
iii. What are the motivations for IPSAS adoption? Are IPSASs useful and feasible for government
accounting and financial reporting?
iv. Is there any suggestion for adoption of IPSAS from different stakeholders (International Donors,
Institutions WB/IDB/ADB/IMF and institutions within the country)?
v. What are the challenges/obstacles to implement IPSAS? (Govt. interest, stakeholders’ interest,
training on IPSAS, competencies of accountants, accounting environment, technologies)
vi. What is the scope of PSA relating to Information technology application system? (Transaction
processing system, Accounting information system, other systems).

3. How should Public Sector Accounting (PSA) be reformed in Bangladesh?

i. Do you think we need reform initiatives to convert accounting practices to accrual as per IPSAS?
How could we improve the existing practices?
ii. What should be the role of government/C&AG/CGA/Policy Makers/Donors/Stakeholders to
reform accounting in the public sector of Bangladesh?
iii. How could we overcome the barriers (technological, professional, practice, legal; and BAS) of
implementing accrual accounting practices as per IPSAS in Bangladesh?
iv. How could existing accounting practices improve its IPSAS/reporting system, so that the authority
can be more accountable to the stakeholders/users (public, taxpayers, management, donors,
stakeholders)?
v. What should be the steps taken by the government to promote public Confidence on reported
accounting information?
Main Question: What are the Present Practices and Issues of the Public Sector Accounting in
Bangladesh?

Sub-questions:

(i) What are the existing practices of Public Sector Accounting (PSA) in Bangladesh?
(ii) What are the problems and challenges in the current Public Sector Accounting in
Bangladesh?
(iii) How should Public Sector Accounting (PSA) be reformed in Bangladesh?

Research Objectives:

Main Objective: To explore the Present Practices and Issues of the Public Sector Accounting in
Bangladesh?

i) To evaluate the existing practices of Public Sector Accounting (PSA) in Bangladesh.

ii) To explore the problems and challenges in current practices of public sector accounting in

Bangladesh?

iii) To propose policy recommendation to reform public sector accounting in Bangladesh.

What are the existing practices of Public Sector Accounting (PSA) in Bangladesh?

i. What are the present practices of Public Sector Accounting (PSA) in Bangladesh? What are the
reports/accounts/statements that are prepared in public sector?

The CGA is the key institution for processing of payments, internal control, and accounting. It serves as
the treasurer (pay station), accountant, and pre-auditor of government funds. It has accounting offices
for all ministries, districts, and upazilas (sub districts). In addition to payment processing, CGA is
responsible for compilation of the monthly and annual accounts (finance accounts) of the government
as a whole. The government’s accounting standards do not fully comply with the cash basis
International Public Sector Accounting Standards (IPSAS). The modified cash basis of accounting is
used in maintaining the Consolidated Fund account and the public accounts. It is noted that developing
and adopting new standards could be done with authorization from the CAG (i.e. legislation would not
be required). The chart of accounts is unified for both budgets and all government levels. Under the old
chart of accounts (13 digits), whether a payment is charged to the non-development or development
budget is determined by its legal code entered on the bill (level 1code). Each ministry and unit within a
ministry is recognized by its functional code (level 2 and 3). The project to be charged is determined by
its operational unit code (level 4). Finally, the expenditure type (wages, other operational costs,
investments) is determined by the economic code (level 5). Now the New Budget and Accounting
Classification System (56 digits) (BACS) has been implemented which comprises of 9 segments which
are divided into three parts – ‘Core Part’, ‘Additional Part’ and ‘Reporting Part’. Only Core Part and
Additional Part requires data entry. Core part have further 4 sub-parts namely Organizational,
Operational, Fund and Economic, Additional Part have 2 sub-parts namely Mode of Financing and
Location and Reporting Part have 3 parts namely Authorization, United Nations Classification of
Function of Government (COFOG) and Budget. The payment, accounting, and internal control process
follows the same procedure for both non-development and development budgets. All bills submitted for
payment are subject to review by CGA before they process the payment, i.e. with some few exceptions,
only CGA have access to cash.

The CGA earlier used the Integrated Budget and Accounting System (IBAS), a computerized
software system, for budget management and accounting purposes. Now, the Government have
implemented iBAS++ in 2018. iBAS++ is an integrated financial management information system for
the Government of Bangladesh. It is a centralized internet and oracle-based software which allows
budget preparation, budget distribution to the field offices, fund release, appropriation, online
submission of pay and other bills, etc. The CGA records all expenditures (charges made against the
government bank accounts) and checks that bills submitted for payment have been authorized through
the budget process with total expenditure contained within budget ceilings. All ministries rely on
reports from iBAS++ for monitoring purposes, but also on accounts from their field offices. There is
absence of commitment control (i.e. checks that limit commitments to actual cash availability and
approved budget allocations) which government plans to improve through roll out of commitment
control module in iBAS++. This ‘rush of expenditure’ has the attendant risk of attracting inferior
quality and, at the same time, constrains budget credibility.

The CGA is responsible for preparing financial statements of cash release and expenditure
incurred as well as consolidated financial statements. Line ministries are responsible for maintaining
the central accounts of all resources received and spent in cash and kind. The CAOs attached to each
ministry are responsible for preparing ministries reports, which includes sub-national data. The quality
of in-year budget reports is good, but timeliness could be improved. Data inaccuracies are limited to
revenue estimates. The production of annual financial reports is incomplete and untimely; this
undermines the credibility of annual financial reports. The Government of Bangladesh prepares two
sets of financial reports annually: Annual Appropriation Accounts and Annual Finance Accounts.
The principal accounting officers of the ministries/divisions are under obligation to sign annual
appropriation accounts prepared on a cash accounting basis for their respective expenditure
jurisdictions. This account by definition is meant for showing comparison between original and actual
outturn for expenditure. The Annual Finance Accounts are prepared by CGA, showing both receipts
and expenditure together with the balances deduced from the books of accounts maintained. Earlier,
IBAS captured only uses of funds, but not entirely the sources, this is expected to be resolved by
IBAS++.

Reports are prepared on a monthly basis, normally within 40 working days of the period-end.
Financial reports take long for preparation and submission for external audit. The FY end in
Bangladesh is June. Financial reports take long for preparation and submission for external audit. The
revised and final annual accounts should be available by October and submitted to the CAG by
December (i.e. within six months of the year-end), but these dates are usually not met, which
subsequently delays the audit carried out by the CAG. Backlog was observed in the audit of
government accounts, until the backlog is dealt with and accounts submitted on time for audit, the
usefulness of financial reports will be undermined.

 Cash basis for annual Appropriation Account and Modified cash basis for the Finance
Account-Receipts and Payments Account.
 Different types of monthly report for internal decision making
 Annual Finance Accounts for Audit by CAG
 Annual Appropriation Accounts prepared and signed by PAO
 Lack of timeliness in reporting


ii. What are the institutional factors/barriers that affect the development of accounting practices in
Bangladesh?

Khan (2019) states that various reform initiatives were undertaken by the governments of
Bangladesh to improve its public financial management systems, known as the "Committee on
Reform in Budgeting and Expenditure Control (CORBEC)" in 1989. Another Committee, "Reform
in Budgeting and Expenditure Control Project (RIBEC)" was introduced in 1995 to ensure the
application of the recommendations of the CORBEC. Following the completion of the RIBEC, the
GOB launched another reform initiative in July 2003 known as the "Financial Management Reform
Programme (FMRP)" to improve the quality of government accounting and reporting such as
treasury and cash management, computerization, and linking all government pay points.
Improvement of the Public Sector Accounting, Reporting and Accountability is one of the major
components or objectives of the Public Financial Management project of the government (Rahman
et al., 2019). PFM is therefore considered an integral part of good governance, transparency, and
accountability for the public sector accounting (Islam, M. S., 2020).

However, to ensure improvements in line with the intentions of the development partners, the
government of Bangladesh has recently tried to develop the accounting system (central and local)
and has established fully automated software-based accounting known as Integrated Budgeting and
Accounting System (iBAS++) that is based on the modified cash basis of accounting (ADB, 2018).

 Legislature or Parliamentary intervention (Compliance of the Constitution)

 Interest of the political leader (Political parties philosophy)
  Preparer Vs Executive Interest (CAG & CGA offices)
 Regulators involvement (MOF)
 Donors preference (World Bank, ADB,IMF) or prescriptions

iii. Are there any factors or pressures that might control the authorities in setting up the policies and
procedures? Can you give more details please?

As a result, the country has some external pressures from the development partners, primarily
from the World Bank, ADB, and IMF to take some structural adjustment programs as reform
initiatives to improve the governance mainly in the public financial management (WB, 2018). Khan
(2019) states that various reform initiatives were undertaken by the governments of Bangladesh to
improve its public financial management systems, known as the "Committee on Reform in
Budgeting and Expenditure Control (CORBEC)" in 1989. Another Committee, "Reform in
Budgeting and Expenditure Control Project (RIBEC)" was introduced in 1995 to ensure the
application of the recommendations of the CORBEC. To fulfill the prescriptions of the donors, the
government of Bangladesh is on under the pressure to maintained the requirements in the practice of
accounting. On the other hands the authority who have power to initiate the development in practice
also must consider the constraints within the internal environment such as lack of expertise,
resources, infrastructure and the interest of the management and the political leaders.

 Internal factor (interest of the practitioners)

 Donors control over finance
 Lack of professional bodies participation
 Specific agenda of the donors
 Regulators (MOF) specific agenda
 Lack of sufficient competent resources

iv. How does the competing institutionalized logic in the area of PSA shape the nature of accounting
regulation, current structure and practices?

The local and international organizations such as professional accountant bodies ICAB, IFAC and
ADB, World Bank, IMF have involved with the development of accounting practice in Bangladesh
since independence. Bangladesh, like other developing countries, is under pressure to improve
current accounting practices in order to meet the requirements of international agencies, which
expect borrower countries to take on the specific practice of accounting and reporting of their
financial activities. The government accounting practice in Bangladesh is prescribed by the external
agencies to practice private sector accounting in the government sector.

 Specific practicing requirement of IFAC as accrual accounting

 Donors reporting requirements
 Practicing suggestions of the local professional accounting bodies
 Administrative requirements such as MOF
 Capacity of the administration
 Availability of the expertized workforce

v. Is there any role played by culture or society in setting up the rules or applying PSA guidelines in
Bangladesh?
 The reform process of the public sector accounting in Bangladesh is based on the prescriptions of
the international agencies. The government servants or the accounting practitioners are responsible
to deliver service to the citizens in exchange of their tax contribution. But the taxpayers have the
little access to the performance information of their tax monies. And there is no or little involvement
of ICAB in development of the PSA.

 Non interest of the social members to the financial information of PSA.

 Insignificant involvement of the professional bodies
 Lack of accountability of the political leaders to their voters.
 Limited access to the accounting information by the taxpayers

vi. How do you legitimate the existing PSA practices? Do institutions (Government, Ministries,
Divisions, Districts, and Upazila level) follow the rules and standards properly?

The Constitution of Bangladesh is known as the fundamental laws or regulation that provides
guidelines of accounting practice in the public sector of Bangladesh. It provides the CAG of the
country with absolute independence; hence, he is not answerable to any other authority to gain
access to all documents required while conducting an audit. Article 127–132 of the constitution of
the country illustrates the establishment, functions, terms of office and so on of the Auditor General.
On the basis of the authority of this order the office of the Auditor General issue some important
directions/directives known as Account Code (Volume I, II, III and IV), General Financial Rules
(GFR), Treasury Rules and the Subsidiary Rules, and the Audit Code in that period to govern the
overall financial and accounting practices in the government financial and accounting of the
government. The title of the Article 85 of the Constitution of Bangladesh is the “Regulation of
Public Moneys” and states that “The custody of public moneys, their payment into and the
withdrawal from the Consolidated Fund or as the case may be, the Public Account of Republic, and
matters connected with or ancillary to the matters aforesaid, shall be regulated by Act of Parliament,
and until provision in that behalf is so made, by rules made by the President.” On the basis of this
constitutional requirement the government of Bangladesh issued and enacted an act named “The
Public Moneys and Budget Management Act, 2009” which contain eight (08) chapters, twenty seven
(27) sections and numerous sub sections. The objective of this act is to regulate overall financial
matters of the government including the instructions regarding the custody, deposit and withdrawal
of the public moneys from the two types of government accounts known as the Consolidated Fund
and the Public Account of the Republic, ensuring accountability and transparency in preparation and
implementation of budget, maintenance of budget deficit, management of public debt, guideline to
improve the macroeconomic stability and other related matters also. Besides these regulations, the
responsible authority also issued some practicing guidelines is known as manual for the different
bodies such as BACS manual, departmental accounting manual, defense accounting manual etc.

 Constitutional enforcement
 Rules issued by government
 Manuals issued by CGA with the approval of MOF

vii. What is the present status of accounting reform to convert existing practices as per the
requirement of IPSAS adoption in Bangladesh?

Khan (2019) states that various reform initiatives were undertaken by the governments of
Bangladesh to improve its public financial management systems, known as the "Committee on
Reform in Budgeting and Expenditure Control (CORBEC)" in 1989. Another Committee, "Reform
 in Budgeting and Expenditure Control Project (RIBEC)" was introduced in 1995 to ensure the
application of the recommendations of the CORBEC. Following the completion of the RIBEC, the
GOB launched another reform initiative in July 2003 known as the "Financial Management Reform
Programme (FMRP)" to improve the quality of government accounting and reporting such as
treasury and cash management, computerization, and linking all government pay points.
Improvement of the Public Sector Accounting, Reporting and Accountability is one of the major
components or objectives of the Public Financial Management project of the government (Rahman
et al., 2019). PFM is therefore considered an integral part of good governance, transparency, and
accountability for the public sector accounting (Islam, M. S., 2020).The Government of Bangladesh,
however, has completed and is currently conducting multiple accountability improvement projects
in collaboration with other donors and NGOs. They include the RIBEC family of projects funded by
the UK-DFID within the Ministry of Finance, the Comptroller and Auditor General, and the
Financial Management Academy; two other UNDP-supported projects, Strengthening the OCAG
and Strengthening Parliamentary Democracy; and ADB-sponsored projects within the Ministry of
Finance and the Securities and Exchange Commission.

As a part of these reform measures, the Bangladesh government decided to schedule the central
and local government's financial statements, the first IPSAS-based statements for key ministries and
other specialist entities for the 2007-2008 and 2009-2010 fiscal years, respectively (World Bank,
2007a, 2015). But a decade has passed to impose its commitment to incorporate the Cash Basis
IPSASS (Rajib et al. 2019). As advised by the World Bank and other donor organizations, neither
the key ministries nor the specialist public sector institutions in Bangladesh have implemented the
Cash Basis IPSAS

 Planning but delaying to adopt cash basis IPSAS

 Lack of available resources
 Difficult to apply accrual accounting in the budgetary central government
 inadequate planning by public administrators
 poorly grounded reform recipes;
 needs, capacity and infrastructure; and
 corruption and political patronage.

4. What are the problems and challenges in the current Public Sector Accounting in Bangladesh?

vii. What are the problems, and obstacles you are facing in the current practices of PSAin Bangladesh,
and how these problems can be resolved?

In a report, Asian Development Bank (ADB) titled "the Public Financial Reporting System of
Bangladesh" states that the country began using computerized accounting software known as
Integrated Budgeting and Accounting System (iBAS) in 2009 and iBAS++ as the updated version
fully applied from 2019-2020 FY that is based on the concept of modified cash basis IPSASs in the
country. This report noted some weaknesses of this system as (i) TheiBAS++ is not fully integrated.
(ii) Financial reports are not system-generated. (iii) PFM related internal control mechanisms are
mostly absent in the departments, divisions and ministries. (iv) CAO accountability is not clearly
defined. (v) no system for risk assessment has been set up yet. (vi) The lack of trained staff is
evident.

 Internet network (low data speed)

 System Error
  Posting in wrong code of account by inefficient staff
 Proper utilization of accounts is absent
 Interpretation of accounts is not available
 Lack of control on iBAS++ by the CGA
 Only cover budgetary central government units
 The present accounting software not cover the extra-budgetary central government units
(autonomous bodies), local government etc.

viii. What are the reasons for not applying IPSAS in Bangladesh?

Similar to neighbouring countries, forinstance, India and Sri Lanka, Bangladesh has inherited a
colonial administrative structure withwell-developed bureaucratic and legal systems, although their
functioning in practice has beendisappointing (Islam, 2016). However, on the contrary to Sri Lanka
and India, few attempts havebeen made in Bangladesh since the acceptance of IPSASs in the last
decade to develop financialstatements of government entities adhering to the requirements as laid
down in the Cash BasisIPSAS. Some interviewees have envisaged this delay as part of the
government’s implicitresistance to IPSASs, a situation which is evident across a range of emerging
economies(Adhikari and Jayasinghe, 2017). The extant work shows that IPSASs have become an
importantlegitimacy tool for the government and the delay in their implementation has become a
normaltendency. Like other developing countries Bangladesh also striving to implement donors
prescribed accounting practices but not able to implement it because of some limitations.

 Lack of expertise in the area of IPSAS driven accounting practice

 Complexity in the nature of government accounting transactions
 Political/Govt. Philosophy
 Legislature and Executive interest
 Donor driven accounting policy
 Lack of resources and infrastructure
 Commercial accounting is not feasible for the budgetary central government
 Non participation of the local practitioners
 a lack of will by political party;
 the resistance of consultants;
 very low local involvement,

ix. What are the motivations for IPSAS adoption? Are IPSASs useful and feasible for government
accounting and financial reporting?
Ijeoma. N. B., Oghoghomeh. T. (2014) conducted an empirical study and reported several benefits
of adopting IPSAS’s in the reporting of the public sector were grouped two broad ways in this
paper such as political benefits (Accountability, transparency, Improved Credibility/Integrity,
Political Leverage, International Best Practice and Comparability, Greater Disclosures, Increased
control of public agencies) and economic benefits (Building confidence in donor agencies and
lenders, Improved services delivery, Aggregate Reporting, Enhanced public-private partnership
arrangements, Economic leverage). The study found that IPSAS adoption is expected to increase
the accountability and transparency of the accounting practice in the Nigerian public sector. They
also argued that the adoption of IPSAS will also increase comparability along with international
best practices of reporting. This study also denoted that IPSAS adoption will help to provide more
useful information for decision-makers as well as improve the quality of the reporting systems in
the public sector of Nigeria. In addition, this study was found that the government of Nigeria will
 improve the comparability of accounting information provided by the public sector entities within
or outside of Nigeria. They also concluded that the adoption of IPSAS is likely to impact the
operating procedures as well as reporting practices by strengthening the good governance and
relationship within the government.
 International best practice
 Improve the quality of the reporting system
 Enhance comparability of the financial statement with other government
 Improve accountability and transparency of the government
 Increase confidence of the donors and lenders of the govt.
 Improve service delivery
 Enhance private-public partnership arrangement
 Increase the usefulness of the information to decision makers
 Ensure good governance within and outside of the government.

x. Is there any suggestion for adoption of IPSAS from different stakeholders (International Donors,
Institutions WB/IDB/ADB/IMF and institutions within the country)?

The adoption of IPSAS is being considered by a number of jurisdictions and the current period can
best be described as a process of transition, and the situation continues to evolve as governments
around the world make decisions about their financial reporting. (Deloitte 2015).

Developing countries are urged to adopt IPSAS by international organizations which provide
financial assistance to developing countries. Other countries, regardless of their political and
economic systems, are encouraged to harmonize their national standards with IPSAS. Thus, IPSAS
have become de facto international benchmarks for evaluating Government accounting practices
worldwide. For these reasons, IPSAS deserves the attention of accounting policy- makers,
practitioners and scholars alike (Mohammed,2014).

 IPSAS based accrual accounting gives better financial report

 Gradual implementation starts from different government bodies
 Confirm application of Cash Basis IPSAS then transit for accrual


xi. What are the challenges/obstacles to implement IPSAS? (Govt. interest, stakeholders’ interest,
training on IPSAS, competencies of accountants, accounting environment, technologies)

There is still a wide variation in the rate of progress and success made with the adoption of IPSASs.
Specific complex and consistent implementation challenges face the implementation of the IPSASs
more so in the Asian countries and part of African countries (Ryan, Guthrie, & Day, 2008). The
challenges facing the implementation of IPSASs can be classified into stakeholder engagement
challenges, legal and structural transformational challenges, change management issues, skills
capacity, the cost of implementation, the technological and infrastructural challenges,
implementation approaches adopted by the nations and the external supports (Adamu, & Ahmed,
2014).

Barton (2009) has indicated that the level of awareness and understanding of the IPSASs framework
greatly varies across the jurisdictions. The level of knowledge on the IPSASs guidelines differs
across the public sector entities, political class and the academicians accustomed to cash accounting
principles. The success of IPSASs application depends on understanding, engagement, and
 education of the key stakeholders (Aliyu, &Balaraba, 2014). Failure to engage the staff members in
developing a stronger partnership between audit and finance departments in an organization led to
the unsuccessful application of the IPSASs. The resistance by auditors and accountants to introduce
the IPSASs guidelines in an organization has also resulted in the unsuccessful deployment of the
standards in most countries (Kalulu, 2015).

The financial costs and resource costs of implementing IPSASs are too high, hence most countries
are reluctant to introduce the provisions in their financial management systems (Ofoegbu, 2014).
The external support from the professional accounting organizations are required to enhance
awareness of the need to realize accountability and transparency in financial reports is also a factor
that can contribute to successful implementation of IPSASs. Therefore, failure to incorporate
external support may lead to failure (Rogosic, & Palos, 2017).

 Lack of Expertise
 Donor driven accounting policy
 Lack of resources and infrastructure
 Commercial accounting is not feasible for the budgetary central government
 Non participation of the local practitioners
 a lack of will by political party;
 the resistance of consultants;
 very low local involvement,
 Cost to implement
 Availability of qualified accountants
 Readiness of government departments and agencies

xii. What is the scope of PSA relating to Information technology application system? (Transaction
processing system, Accounting information system, other systems).

This was followed by the Financial Management Reform Programme (FMRP) was launched in July
2003 and was completed in September 2009. The FMRP was responsible for: Launching automated
Integrated Budgeting and Accounting System (iBAS) for capturing every day transactions and
accounting information of all government pay and account offices; Launching of Wide Area
Network (WAN) linking 64 DCA and DAO offices and 49 CAO offices across the country for
facilitating everyday accounting data transmission to CGA and Finance Division; Improved quality
of Government Accounts; Introduction of automated import of debit & credit scroll data form banks
performing treasury functions; and Examine and determine the CGA’s Training requirement.
The new Budget and Accounting Classification System (BACS) was prepared under the Deepening
of Medium Term Budgetary Framework (DMTBF) and the Strengthening of Financial
Accountability Project. It was developed in parallel with another area under that Project the
integrated Budget and Accounting System (iBAS++) design and development.

 Only cover the whole accounting and reporting of the transactions of the budgetary central
government.
 Difficult to cover all the areas of public sectors in a single window
 Huge investment required
 Digitalization policy of the govt. can help to implement the system

5. How should Public Sector Accounting (PSA) be reformed in Bangladesh?

 vi. Do you think we need reform initiatives to convert accounting practices to accrual as per IPSAS?
How could we improve the existing practices?

The international best practice of accounting based on IPSAS has several benefits to government
accounting. To gain the benefits of accrual accounting based on IPSAS, the policy makers should
initiate action to reform existing accounting system in the public sector of Bangladesh.

 Need clear statement of the government/government policy

 Wide spread area coverage required by the present FMIS
 Required extra budget allocation to speed up the reform process
 Indigenous capabilities and competencies should improve


vii. What should be the role of government/C&AG/CGA/Policy Makers/Donors/Stakeholders to
reform accounting in the public sector of Bangladesh?

In the development of PSA reform in emerging economies, international organizations, primarily the
World Bank and IMF, have played an influential role in reforming the public sector with the goal of
promoting new-liberal ideas, professional expertise, and creating opportunities for the employment
of their consultants with high paid salaries (Hopper et al., 2009, 2017; Josiah et al., 2010).

However, to ensure improvements in line with the intentions of the development partners, the
government of Bangladesh has recently tried to develop the accounting system (central and local)
and has established fully automated software-based accounting known as Integrated Budgeting and
Accounting System (iBAS++) that is based on the modified cash basis of accounting (ADB, 2018).
But these reform initiatives should come from the heart of indigenous stakeholders instead of
external donors prescriptions or need. So the government of Bangladesh is required to ensure the
participation of the local administration including the professional accounting bodies.

 Ministry of Finance should play the regulatory role efficiently on behalf of government
 Role of CGA must separated from the role of CAG
 Donors should give priority of the indigenous practitioners
 Professional Accounting bodies like ICAB should play active role in the reform process.

viii. How could we overcome the barriers (technological, professional, practice, legal; and BAS) of
implementing accrual accounting practices as per IPSAS in Bangladesh?

Bangladesh needs to implement the Cash basis IPSAS fully at first, and then gradually move
forward under a comprehensive future action plan to adopting the Accrual basis IPSAS phase by
phase under phased-out method like Sri Lanka. For this purpose, the C&AG under its constitutional
mandate of Article 131 may take an initiative to develop Bangladesh Public Sector Accounting
Standard (BPSAS) like IPSAS for few pilot projects. These standards will be recommendatory at
the initial stage and gradually will be made mandatory for the pilot projects. In addition, all
stakeholders including the MoF, OC&AG, OCGA, concerned regulators and standard setters
and Professional Accountancy Organizations (PAOs) need to work together under a
meaningful and effective partnership to develop a New Public Management (NPM) to adopt
IPSAS and harmonize the public accounting system in line with the international best accounting
practices. It is also necessary to share experiences of the member PAOs of the regional and
global apex organizations of the professional accountants (PAs) for providing high quality
 Integrated Reports (IR) on PFM on which the general public, the donors and the development
partners like bilateral and multilateral lending agencies can rely.

 Amend all the regulations to make easy to implement IPSAS

 Prepare BPSAS by CGA with the help of national and international professional
accounting bodies
 More investment required to improve IT infrastructure
 Professional accounting bodies should include with the reform initiatives
 Need to arrange a comprehensive training program for the government accounting
personnel.

ix. How could existing accounting practices improve its IPSAS/reporting system, so that the authority
can be more accountable to the stakeholders/users (public, taxpayers, management, donors,
stakeholders)?

In the public sector there was a similarlyclear need for the adoption of the IFRSequivalent, IPSAS.
Broadly, there havebeen two reasons why developingcountries have looked to transition toIPSAS
(ACCA 201). The first has been theestablishment of a new government, or atransfer of political
power withingovernment leading to a desire tostrengthen transparency, accountabilityand general
financial managementpractices. The second has been thegrowth of donors and funders stipulatinga
funding requirement for the country toimprove its financial management andfinancial reporting
practices.Many developing countries have in recentyears announced their intention to adoptIPSAS
standards. This report, however,suggests comparatively few havecompleted the process
successfully andseamlessly – particularly as measured bythe outcomes of government audits.
Fullyadopting and complying with IPSASstandards has been difficult for manycountries, and it
remains at best what canbe described as ‘work in progress’. Thetransition to IPSAS type standards
inmany developing countries in SouthAmerica, South Asia, the Caribbean andAfrica has been
ongoing for several years,and countries in Eastern Europe thatemerged from the former Soviet
bloc– for example, Latvia and Lithuania – havesought aggressively to adopted IPSAStype
standards too.This study has illustrated the need forcountries adopting and implementingIPSASto
have a clear strategy, with realistic timescales, milestonesandresources. Some of the current
challengespertaining to IPSAS adoption are broaderchange management and
programmemanagement issues; others are morebasic, such as poor IT infrastructure, bad
record keeping, and paucity of core accounting information under previousfinancial reporting
practices. Yetgovernments and their public sectorentities do not have to act on their own– the
accountancy profession can, and should, assist. Professional accountancyorganisations should
consider what rolethey can play in increasing awareness of the need for transparent financial
reports in the public sector, including – but goingbeyond – providing training on accounting
standards. IFAC has played itsimportant part too, launching the‘Accountability Now’ initiative
focusingon PFM reform and assisting users offinancial statements to understand them(IFAC, n.d.).
Arguably donors could also do more to supporttheprofessionalisation of public sectorfinancial
management as we moveforward. Other stakeholders, includingthe audit firms, can also assist
withimproving the public financemanagement training environment.Users need guidance to
understand theinformation contained in financialstatements, whether cash based IPSAS oraccrual
based IPSAS. The accountancyprofession needs to play a fundamentalrole in assisting them in
understandingfinancial reports. A partnership between governments, their public sector
entities, the users of financial reports and the
 accountancy profession can achieve much. Transparent financial reports
thatincreaseaccountability, improve publicsector financial management and betterdecision-making
and ultimately superiorvalue for money for taxpayers should bethe ultimate goals.

 Gradually update the integrated budgetary and accounting software (iBAS++) as per the
requirement of IPSAS
 Form a clear IPSAS implementation strategy, with realistic timescales, milestones and
resources.
 Ensure the involvement of the professional accountancy bodies
 Increase awareness of the importance of the need of transparent financial report
 Providing training on accounting standards based on IPSAS
 Extensive donors support required to adopt IPSAS based reporting.

x. What should be the steps taken by the government to promote public Confidence on reported
accounting information?

Every government has the responsibility to protect public interest, ensure best utilization of public
money, reduce poverty and achieve inclusive socioeconomic growth. The member states of the
United Nations (UN) have a new responsibility to achieve Sustainable Development Goals (SDGs)
by 2030. PFM has a major role to achieve success in this regard. In spite of all limitations, PFM
system is gradually improving in Bangladesh though there are many shortcomings.

The first step on the part of the government is to recognize and acknowledge that change is
required. Strong commitments of the policy makers and stakeholders are also needed to effect the
necessary reforms in PFM. Among others, adoption of international standard budgeting, accounting
and auditing systems are also vital for improving the quality of PFM system and making it
accountable. This sophisticated work cannot be done without engaging the professionally qualified
accountants in PFM and developing the skills of the government employees working in the field
level of the PSEs. In order to address this problem, government may take the assistance of the PAOs

 Government should make available the accounting reports for all stakeholders
 Public Account Committee (PAC) of the Parliament should perform more efficiently
 Office of the CAG should perform its duty properly
 Must ensure Excess to financial information by the stakeholders
 Ensure value for money
 Must engage the professional accountants in the policy and practice level.
 Should improve the efficiency and competencies of the public servants or accountants.
 Letter of Invitation (Interview Participant)

Dear Participant

I am a PhD candidate in the Department of Accounting & Information Systems at Jagannath University,
Dhaka, currently working on my doctoral dissertation. It is with great pleasure that I am inviting you to
participate in my research. The title of my research is "Public Sector Accounting in Bangladesh:
Practices and Issues."
I have had the great honor of being able to work as an academic in the area of accounting at the university
level for the last 16 years. I have become extremely interested in learning about the actual accounting
practices in the public sector or government sector.

The objective of my research is to investigate the present practices of accounting in the public sector and
also explore the relevant problems and challenges that exist with this accounting practice. It also focused on
forming some recommendations to improve the existing practices for the future.

The purpose of this letter is to ask you to participate in an interview with the researcher at a time and
location that is most convenient for you. I anticipate that the interview will take you no longer than 50
minutes. If you permit me to take an audio record of your interview, I will do that. Otherwise, I will take an
interview note of your conversation with me. I would like to schedule the interview in the months of
December 2021 and January 2022.

The anticipated benefits of this study are that it will provide a better understanding of the existing practices
to those interested parties who are not directly involved with them and also identify the problems and
challenges that exist with the practices. It is hoped that the results of this study will lead to the development
of a series of suggestions and strategies that may help the existing practitioners and the regulators solve the
problems they currently face and improve the existing accounting practices in the government sector.

All information is confidential and every effort will be made to protect your anonymity. Information you
provide in the consent form and interview will be stored separately from the data. The researcher’s
dissertation chair may have access to all the data collected during the project. Your individual performance
will not be reported. Only the results of all participants as a group will be reported. The final research report
will not include any identifying information. All data and documentation collected will be destroyed upon
completion of my study.

Your participation is greatly appreciated.

With best regards

………………………….
(Md. Abdul Mannan)
Associate Professor & Research Fellow
Department of Accounting & Information Systems
Jagannath University, Dhaka-1100
Mobile-01716418892, Email: mannan@ais.jnu.ac.bd
 Letter of Invitation (Survey Participant)

Dear Participant

I am a Ph.D. candidate in the Department of Accounting & Information Systems at Jagannath University,
Dhaka, currently working on my doctoral dissertation. It is with great pleasure that I am inviting you to
participate in my research. The title of my research is "Public Sector Accounting in Bangladesh:
Practices and Issues."

For the last 16 years, I have had the great honor of being able to work as an academic in the area of
accounting at the university level. I have become extremely interested in learning about the actual
accounting practices in the public sector or government sector.

The objective of my research is to investigate the present practices of accounting in the public sector and
also explore the relevant problems and challenges that exist with this accounting practice. It also focused to
form some recommendations to improve the existing practices for the future.

The purpose of this letter is to ask you to complete a survey questionnaire at a time and location that is most
convenient for you. I anticipate that the survey will take you no longer than 20 minutes. I would like to
schedule the survey for December 2021–January 2022.

The anticipated benefits of this study are that it will provide a better understanding of the existing practices
to those interested parties who are not directly involved with them and also identify the problems and
challenges that exist with the practices. It is hoped that the results of this study will lead to the development
of a series of suggestions and strategies that may help the existing practitioners and the regulators solve the
problems they currently face and improve the existing accounting practices in the government sector.

All information is confidential and every effort will be made to protect your anonymity. Information you
provide in the survey will be stored separately from the data. The researcher’s dissertation chair may have
access to all the data collected during the project. Your performance will not be reported. Only the results of
all participants as a group will be reported. The final research report will not include any identifying
information. All data and documentation collected will be destroyed upon completion of my study.

Your participation is greatly appreciated.

With best regards

……………………
Md. Abdul Mannan
Associate Professor & Research Fellow
Department of Accounting & Information Systems
Jagannath University, Dhaka-1100
Mobile-01716418892, Email: mannan@ais.jnu.ac.bd
To
The Controller General of Accounts (CGA)
Office of the Controller General of Accounts
HishabBhaban, Segunbagicha, Dhaka-1000

Through: Chairman, Department of Accounting & Information Systems, Jagannath University, Dhaka.

Subject: Application for grant permission of data collection through interview and questionnaire survey.

Dear Sir
I am a Ph.D. candidate in the Department of Accounting & Information Systems at Jagannath University,
Dhaka, currently working on my doctoral dissertation. The title of my research is "Public Sector
Accounting in Bangladesh: Practices and Issues."

For the last 16 years, I have had the great honor of being able to work as an academic in the area of
accounting at the university level. I have become extremely interested in learning about the actual
accounting practices in the public sector or government sector.

The objective of my research is to investigate the present practices of accounting in the public sector and
also explore the relevant problems and challenges that exist with this accounting practice. It also focused on
forming some recommendations to improve the existing practices for the future.

This letter is to ask permission to conduct interview and survey at your organization for my study. I expect
the interview to last 50 minutes and the survey to be 20 minutes. That should be December 2021–January
2022.

The anticipated benefits of this study are that it will provide a better understanding of the existing practices
to those interested parties who are not directly involved with them and also identify the problems and
challenges that exist with them. It is hoped that the results of this study will lead to the development of a
series of suggestions and strategies that may help the existing practitioners and the regulators solve the
problems they currently face and improve the existing accounting practices in the government sector.

All information is confidential and every effort will be made to protect anonymity of the respondents.
Information collected in the interview and survey will be stored separately from the data. The researcher’s
dissertation chair may have access to all the data collected during the project. The respondent performance
will not be reported. Only the results of all participants as a group will be reported. The final research report
will not include any identifying information. All data and documentation collected will be destroyed upon
completion of my study.

Your permission to collect data is greatly appreciated.

With best regards

……………………
Md. Abdul Mannan
Associate Professor & Research Fellow
Department of Accounting & Information Systems
Jagannath University, Dhaka-1100
Mobile-01716418892, Email: mannan@ais.jnu.ac.bd