Experts at an online meeting on Saturday said many corporates were not preparing quality financial reports.
Chairman of Financial Reporting Council (FRC) CQK Mustaq Ahmed said at the meeting many companies were adopting "various mechanisms" for the survival during the Covid-19 pandemic.
"We are hearing companies are taking various mechanisms, we are not blaming them, they are incurring losses, but they have to abide by laws," he said while speaking as chief guest at the online meeting organised by the ICAB.
"Whatever they do, they can't breach the laws, laws and institutions should be upheld," he said. "We can't let institutions fall," he added.
The virtual members' conference focused on 'Bringing Improvement in the Financial Reporting and Quality of Auditing', organised by the Institute of Chartered Accountants of Bangladesh or ICAB.
FRC Chairman said corporate good governance is the first and foremost priority.
"We have to maintain corporate good governance anyway," he said.
He said the government should stand beside the companies who are facing difficult times.
He said the FRC is taking initiatives to improve the quality of financial reporting, attract good students in professional accounting.
The country will face a very difficult time in the post-Covid period, he said, urging the professional accountants to help overcome the crisis.
Speaking as the special guest, Prof. Dr. Shaikh Shamsuddin Ahmed, Commissioner of the Bangladesh Securities and Exchange Commission (BSEC) said many financial reports are not useful.
He said there are a lot of things to improve the quality of financial reporting.
As accountants demanded raise for fees, he said, the country then should open for international accountants so that competition is created and thus quality would also be ensured.
FRC Executive Director Mohiuddin Ahmed said audit process and quality of financial reporting are questionable.
The purpose of this conference was to exchange views on the challenges and way forward to improve the financial reporting and quality of auditing.
Speaking at the conference, ICAB President Muhammad Fraooq said high quality financial reporting supports well-informed investment decisions, thereby facilitating the efficient formation and deployment of capital.
"So, independent and consistently high quality audits is an essential tool for trustworthy financial reporting, which brings stakeholders' confidence when pursuing market opportunities," he added.
He said as part of the mandatory inspection programme, ICAB evaluates quality control system of each firm maintaining IFAC requirements.
The ICAB takes necessary actions, if it identifies quality control deficiencies. Even, proactively take actions against the firm for any professional misconduct, he informed.
About the role of the auditors, Mr. Farooq said auditors cannot compromise audit quality for audit fees. They should perform high quality audits regardless of the level of audit fee.
Considering the high level of cost to engage audit personnel with sufficient skill, expertise, and the use of information technology like Computer Assisted Audit Techniques (CAAT), the existing audit fees are not sufficient, he said adding that regulators' involvement in selection of audit firms and fixing of audit fees may be an option to think about.
In this connection, the Financial Reporting Council and Bangladesh Securities and Exchange Commission could work together in the formation of a joint committee or task force to develop a strategic plan to improve the quality of financial reporting and auditing, he suggested.
Describing the responsibilities of management and the auditors for quality audit, the paper presenter, Mahbub Ahmed Siddique pointed out some issues and challenges for improving the quality of audit like corporate governance, family dominated business , conflict of interest, fraud , corruption, minority shareholders, lack of technical skill, low audit fee, lack of collaboration among regulators and stakeholders, etc.
Independence of preparers, auditors and regulators could improve the quality of audit, he said, adding regulators should protect CFOs from any threat including job security.
The regulators should ensure the fees of the audit considering the volume business and nature of company, he opined.
Muhammed Farhad Hussain FCA, Past President of ICAB acted as the session chairman while ICAB President Muhammad Farooq FCA delivered the address of welcome.
Mahbub Ahmed Siddique FCA, Director Technical-ICAB presented the keynote paper.