FABRICATED FINANCIAL STATEMENTS

ICAB debars an audit firm from practice for 1 year

HM Murtuza | Published: 22:37, Oct 20,2017 | Updated: 22:59, Oct 20,2017

 
 

The Institute of Chartered Accounts of Bangladesh has debarred Amal Krishna Das FCA, an associate of chartered accountancy firm Amal & Leena, from public practice for one year and imposed Tk 1 lakh in fine for approving fabricated financial statements of a suspended brokerage house, Sylhet Metro City Securities Limited.
The Council of ICAB imposed the sanction and penalty on Amal Krishna Das after its investigation and disciplinary committee had recommended taking punitive action against the chartered accountant.
The IDC of ICAB conducted hearing on the issue following complaints from the Chittagong Stock Exchange.
The ICAB also ordered suspension of membership of Amal Krishna Das for two years if he fails to pay the fine within three months, according to an ICAB letter issued by its secretary Muhammad Imrul Quayes on October 15.
The port city bourse in its observations on the audit reports of Sylhet Metro City Securities for the year ended on June 30, 2015 and June 30, 2016 raised a number of questions about the reports that were conducted by Amal Krishna Das.
The CSE in September last year suspended operation of Sylhet Metro City Securities for embezzling investors’ fund worth Tk 12.63 crore in 2014 by selling shares of their clients without their consent.
Although Amal Krishna Das audited the brokerage house’s financial statements, he did not mention any wrongdoings by the firm in his opinions.
Moreover, Amal provided a report stating that the financial statements gave a true and fair view of the state of the affairs of the firm.
The ICAB’s IDC in its observations after conducting hearing stated that it found Amal Krishna Das FCA guilty of professional misconduct under clause 19, 20, 21, 22, 24, 25, 32 and 33 of part-I of schedule-C, Part-II of ICAB Bye-laws 2004 based on his confessional statement.
The IDC specifically mentioned that the audit report was prepared on going concern basis although the operation of Sylhet Metro was suspended by the CSE, representing the auditor’s failure to identity the material fact.
The auditor also failed to report material misstatements regarding suspense account amounting to Tk 36.19 crore and reduction in paid up capital (Tk 38.50 lakh), it said.
Amal also failed to apply basic audit procedure and to obtain sufficient audit evidence to warrant the expression of his audit opinion or to negate the expression of his opinion on the material balance of account receivable of Tk 36.20 crore and payable of Tk 14.25 lakh and suspension of operation, IDC mentioned.
The firm has completely failed to conduct the audit of Sylhet Metro with due care and competence, it added. 

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