CA firms' adherence must, says SEC

Express (August 23, 2011)

Chartered Accountant (CA) firms, selected by the securities regulator to make re-valuation of the assets and liabilities of state-owned enterprises (SoEs), will have to comply with specific conditions, officials said.

The Securities and Exchange Commission (SEC) said this Sunday after it has disclosed a list of 12 CA firms selected in light of some parameters to work as valuers for the SoEs.

The SoEs, which will have to go public to comply with government's order, will appoint such firms to make re-valuation of their assets and liabilities.

The SEC said in a statement that CA firms, which will work as valuers of SoEs will have to accept commitments that they have no ownership in stock brokers, dealers and merchant banks.

The list of valuers included, Rahman Mostafa and Company, M J Abedin and Company, A Wahab and Company, Khan Wahab Shafiq Rahman and Company, Hoda Vasi Chowdhury and Company, Malek Siddiqi Wali, Ata Khan and Company, A Motin and Company, A B Shaha and Company, M R H De and Company, Saiful Shamsul Alam and Company and S F Ahmed and Company.

Earlier, a committee formulated uniform rules, regulations and standards for the government enterprises to comply with their efforts to raise funds from the stock market.

CA firms will have to follow Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS) for valuation of the SOEs.

According to the suggested rules, a SoE's fixed assets will include land, plant and machinery, buildings, intangible assets, long-term investments, inter-company balances and other fixed assets including vehicles, computers, power generating and office equipments, furniture and fixtures.

And an audit firm or its partners will not be allowed to valuate a SoE if the firm or its partners hold any position in the government-owned company.

As per rules, the valuation should be done by using definite and reliable reference prices and the SoEs' land must be valued on the current market price. Plant and machinery will be re-valued on the basis of their remaining life.

The SEC also said a firm, which has been appointed as an auditor or actuary in a SoE for the next three years, including the current year, will not be allowed to work as a re-valuer for that SoE.