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Accurate financial reporting must for capital market dev: BSEC chair

Staff Correspondent | Published: 23:30, Feb 26,2020

 
 

Transparent and accurate financial reporting is the prerequisite for capital market development, said Bangladesh Securities and Exchange Commission chairman M Khairul Hossain on Wednesday.

He made the statement while speaking as the chief guest at a seminar titled ‘Financial Sector Analysis and Detection of Fraud’, organised by the Bangladesh Academy for Securities Markets at the BSEC building in the capital.

The BSEC established the academy to conduct countrywide education on the capital market.

Khairul said that investors could get the perception of a company’s performance and financial ability through the company’s financial statement.

‘Therefore, we should work in unison for ensuring transparency in the financial statements of the companies,’ he said.

All the stakeholders including institutional investors, small investors, issue managers, and regulatory bodies should enrich the ability to scrutinise financial statements of the companies, he said.

Company and auditor play the key role in preparing a financial statement, and they should follow the accounting standards to prepare transparent and accurate financial statement.

Khairul said that ambiguity in the financial reports was one of the reasons for the market debacle in 2010-11.

There is no alternative of accurate and transparent financial reports to bring good IPOs to the market and to ensure proper utilisation of the IPO proceeds, he added.

BSEC director Rezaul Karim mentioned some of the inconsistencies and irregularities in the companies’ financial reports, and ways to analyse them.

Financial Reporting Council executive director Mohammad Mohiuddin Ahmed said that investors had lack of confidence in the companies’ financial reports due to anomalies in the reports.

Companies with the connivance of the auditors falsify financial statements that hurt the investors’ interest.

Companies usually appoint auditors with whom they have intimacies, he said, adding that the professional accountants were involved in the falsification in the financial reports.

Central Depository Bangladesh managing director Shuvra Kanti Choudhury said that Grameenphone has to keep aside Tk12,580 crore claimed by the telecom regulator as per the international accounting rules.

BSEC executive directors Forhad Ahmed and Mahbubul Alam, and Dhaka University associate professor Mohammad Salahuddin Chowdhury, among others, were present at the seminar.

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