The Bangladesh Securities and Exchange Commission on Wednesday published an amendment to its rules of auditing financial statements, allowing companies to continue using their current auditors if the appointments were approved before June 12.
This amendment updates an earlier directive issued on June 12 this year. This change takes effect immediately, as stated in the notice signed by BSEC chairman Khondoker Rashed Maqsood.
The amendment is intended to give companies time to adjust to the new rules without causing disruptions to their financial reporting.
The earlier directive required companies like stock exchanges, stockbrokers, asset managers, mutual funds and other organisations involved with the securities market to follow specific rules when hiring auditors.
It was issued to improve reliability, transparency and trustworthiness of financial statements prepared by entities on the securities market, ensuring they accurately reflect financial performance and safeguard investors鈥� interests.
A clause in the original directive limited companies from using the same auditing firm for more than three years in a row.
It also required most companies to choose their auditors from a list of firms approved by the commission.
The new amendment added an exception to this rule. It said that if a company already hired an auditing firm and the appointment was approved at an annual general meeting 鈥� a yearly meeting where shareholders make decisions 鈥� before June 12, 2024, that auditing firm could continue working for the company for the current financial year.
The exact addition reads, 鈥楶rovided that any audit firm of chartered accountants, which has already been appointed by any registered entity as its statutory auditor and such appointment has been approved in the annual general meeting prior to June 12, 2024, may continue its audit services only for the respective financial year.鈥�
The earlier directive also had other clauses, including those stating that entities must appoint auditors from a commission-approved panel, except for specific cases like stock exchanges and alternative investment funds, submit financial statements within 90 days of the financial year-end and limit audit firm engagements to three consecutive years.
It also enabled the commission to penalise auditors for non-compliance and mandated consultation with the Financial Reporting Council in case of disputes over audit quality.
