FE Report (Novermer 15, 2010)
The securities regulator at last has decided to put in place a mechanism to re-audit the suspicious balance-sheets of listed companies.
The Securities and Exchange Commission (SEC) Sunday approved a draft policy to re-examine 'doubtful' audit reports of listed companies.
However, after Eid-ul-Azha the regulator will seek public opinion to formulate guidelines for re-auditing the doubtful balance sheets submitted by the listed companies.
The decision came in the backdrop of criticism by market experts as the errant companies allegedly resort to window dressing of their balance-sheets to deceive the investors.
The SEC at a meeting held on August 04 last with its chairman Ziaul Haq Khondker in the chair took a decision to re-audit the suspected balance-sheets.
But the decision was not made effective in absence of any concrete strategy.
The SEC Executive Director Anwarul Kabir Bhuiyan said the commission will finalise the rules after evaluating public opinion on the issue.
"The SEC thinks that its move will help reduce the manipulation in the balance sheets of the listed companies," he said.
Normally, the listed companies appoint auditors to carry out annual assessment of their financial health, but very often the bookkeepers cover up the company woes, big debts and inflate or downplay figures to show they are in perfect conditions.
But the SEC is unable to penalise the rouge auditors in the absence of any provision in its rules. On the other hand, the auditors' quasi-regulator --Institute of Chartered Accountants of Bangladesh (ICAB) -- is also reluctant to go for action against the unscrupulous auditors.
The securities regulator at last has decided to put in place a mechanism to re-audit the suspicious balance-sheets of listed companies.
The Securities and Exchange Commission (SEC) Sunday approved a draft policy to re-examine 'doubtful' audit reports of listed companies.
However, after Eid-ul-Azha the regulator will seek public opinion to formulate guidelines for re-auditing the doubtful balance sheets submitted by the listed companies.
The decision came in the backdrop of criticism by market experts as the errant companies allegedly resort to window dressing of their balance-sheets to deceive the investors.
The SEC at a meeting held on August 04 last with its chairman Ziaul Haq Khondker in the chair took a decision to re-audit the suspected balance-sheets.
But the decision was not made effective in absence of any concrete strategy.
The SEC Executive Director Anwarul Kabir Bhuiyan said the commission will finalise the rules after evaluating public opinion on the issue.
"The SEC thinks that its move will help reduce the manipulation in the balance sheets of the listed companies," he said.
Normally, the listed companies appoint auditors to carry out annual assessment of their financial health, but very often the bookkeepers cover up the company woes, big debts and inflate or downplay figures to show they are in perfect conditions.
But the SEC is unable to penalise the rouge auditors in the absence of any provision in its rules. On the other hand, the auditors' quasi-regulator --Institute of Chartered Accountants of Bangladesh (ICAB) -- is also reluctant to go for action against the unscrupulous auditors.
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