Online system to be launched today to weed out fake audited accounts
If you enquire at the apex body of the chartered accountants about the firms and organizations its members audit and sign annually, you will get to know the number is about 16,000.
But if you talk with the National Board of Revenue (NBR), you should come to learn that roughly 35,000 firms furnish their tax and audited statements yearly as part of tax compliance.
The gap clearly implies that there is something very fishy: an organization of people have been involved in preparing fake audited financial statements and so are submitting them to evade paying actual amount of tax.
"We will stop this. This influences our good will," said Mohammed Forkan Uddin, vice-president of the Institute of Chartered Accountants of Bangladesh (ICAB).
He said the ICAB is rolling out a Document Verification System (DVS) to stop the preparation of fake and multiple financial statements by unruly firms.
The ICAB and the NBR are anticipated to sign a knowledge agreement today to launch the DVS in order to prevent the practice of submission of fake audited financial statements.
The ICAB said financial documents endorsed by third person to mislead the regulating authorities and stakeholders will not be possible following the launch of the DVS, that will allow taxmen to check on authenticity of financial record submitted by firms along with their income tax returns.
"This will help the federal government get an increased amount of revenue," said Uddin, adding that the online audited accounts verification systems may also enable the government to know using the number of companies operational in the united states.
Bangladesh has a lot more than 180,000 officially registered companies.
Uddin, also the convener of the ICAB Taskforce on DVS, said the online-based audited accounts verification system can help the Registrar of Joint Stock Companies and Firms get more revenue.
Beneath the online system, ICAB's practicing members gives five key financial data such as for example profit, turnover, asset and liability of a company, generate an 18-digit document verification code (DVC), write the DVC in the audited financial statements and sign the report.
The financial documents submitted to the earnings authority, banks and non-bank finance institutions could possibly be verified through the search option on the DVS Portal by sharing a few information such as the name of person, organisation, the objective of verification, unique code of documents, mobile number and email, said the ICAB.
Uddin said partners of chartered accounting organizations will have to start out making the DVC and sign the audited financial statements from December 1.
"You want to sign an agreement with the Bangladesh Bank too in order to make certain that actual audited financial statements are submitted by companies to use for loans," he said.
"If we can do that, the tendency of showing inflated profits to avail loans should come to a halt. This will help reduce default loans."
The NBR can be willing to plug the loopholes in the submission of fake audited accounts by firms.
In August, it formed a team to identify and prepare a list of the companies that don't have valid taxpayer identification numbers (TIN) , nor submit tax returns.
In September, both NBR and the ICAB also sat to build up something to authenticate audited financial statements.
Finance Minister AHM Mustafa Kamal is expected to inaugurate the DVS today.
