members’ conference on

Anwaruddin Chowdhury fcaMember Council & Past President ICAB, Director CAPA Board

ICAB

Dhaka – 23 February 2013

Harmonization of Financial Reporting and Audit Practices: Bangladesh Perspective

2Regulators, Standards Setters & Professional Bodies

3

4

5

6

7

8

9

Recent Developments – Impact on FR & AP Global Scenario – Economic Recession

(DAVOS/IMF) Global Financial Crisis/ Euro zone Debt Crisis

PREAMBLE PREAMBLE

• Regulatory Failure – Sub-prime Lending / Derivatives

• G-20 Pittsburg Summit 2009 Declaration

• Critical Nature of Financial Markets

• Convergence to Globally Harmonized High Quality Independent Accounting/FR Standards

• Important Role of Accountants - Global Recovery

• Simplification of FI Standards

• Lessons Learnt & Way Forward

10

Political implications of 9/11

Corporate Frauds of New Millennium – Enron

Corporate Governance Failures (Greed) Role of Auditors and Rating Agencies Collapse of Arthur Andersons ? Lessons Learnt / Way Forward Strengthening CG Practices Oversight Regulatory Bodies

ASEAN Financial Crisis (late 90s) Inadequacy of Financial Reporting Lessons Learnt / Way Forward

PREAMBLE PREAMBLE

11

Moving to IAS/IFRS – Rationale.

Forces Driving Harmonization

Accounting as ‘lingua franca’ –Dimensions

Role of IASB & IFAC (IAASB/IPSASB)

Role of IOSCO

Role of ISAR

Role INTOSAI

IAS/IFRS AND ISA –GLOBAL ACCOUNTING/ REPORTING IAS/IFRS AND ISA –GLOBAL ACCOUNTING/ REPORTING AND AUDIT CODES FOR HARMONIZATION OF FR & AP AND AUDIT CODES FOR HARMONIZATION OF FR & AP

12

HARMONIZATION OF ACCOUNTING AND HARMONIZATION OF ACCOUNTING AND FINANCIAL REPORTING PRACTICES /POSITIVE FINANCIAL REPORTING PRACTICES /POSITIVE

DIMENSION DIMENSION

Forces Driving Harmonization

General Considerations

Significance of IFRS Harmonization

Benefits of IFRS Harmonization

Harmonization Benefits to Multinationals

WTO Ministerial 1996 – Implications

G-20 Pittsburg Summit Declaration

European Convergence 2005

American Convergence 2015 ?

13

FACTORS DRIVING STANDARDIZATION FACTORS DRIVING STANDARDIZATION

Deregulation & Liberalization of Economies Accelerated Globalization Catalyzing

Harmonization Entry by Multinational Corporations Increased External Competition Need for Regional/Global HFR&AP

- Donors/Transparency/Corp Govnce.

Foreign Competitiveness – FDI Increased Government/Society/Client

Expectations

Rapidly Evolving Inform. & Comm. Technologies

Increased Clientele Knowledge & Changed Attitudes

Global Economic Scenario –Recession (GFC/EDC)

Transferability of Knowledge, Skills and Competence

14

INTERNATIONAL STANDARDS SETTING BODIES INTERNATIONAL STANDARDS SETTING BODIES

Standard Setting Bodies

IFAC

- IAASB = ISA/IAPS (Prvt Sec Aud Stds)

- IPSASB= IPSAS (Publ Sec Accg Stds)

IASB = IFRS (Prvt Sec Accg/FR Stds)

INTOSAI = ISSAI (Publ Sec Aud Stds)

UNCTAD ISAR = (Prvt Sec Accg Gudls)

15

STANDARDS SETTING/ADOPTION PROCESSSTANDARDS SETTING/ADOPTION PROCESS

Standard Setting Process

IAS/IFRS ISA/IAPS

ICAB Adoption Process

BAS/BFRS BSA/BAPS IPSAS (OCAG) ISSAIs (OCAG)

16

1717

1717

INTERNATIONAL STANDARDS SETTING INTERNATIONAL STANDARDS SETTING BODIES/PROCESS BODIES/PROCESS

IASB

(Steering Comm)

(Exposure Drafts)

IFRS(formerly IAS)

Accounting

IFAC

(IAASB)

(Discussion Drafts)

ISA(and IAPS)

Auditing

17

Harmonization of Financial Reporting refers to the process of standardized convergence through overcoming inconsistencies and narrowing differences in accounting principles and treatment (recognition and measurement) and presentation (disclosure) of items in Financial Statements. Harmonization of Audit refers to the process of standardized convergence through overcoming inconsistencies and narrowing differences in conducting the audit (methodology application) and reporting on the audit of Financial Statements (audit report). HFR&AP ensures greater accountability of management decisions and credible transparency of reported financial information - thereby enhancing good governance in corporate sectors and providing reliable information to user groups (stakeholders) for decision making purposes.

HARMONIZATION MEANINGHARMONIZATION MEANING

18

NEED FOR IAS/IFRS HARMONIZATION NEED FOR IAS/IFRS HARMONIZATION Implementation of International Best

Practices

Global Convergence of Accounting/FR Regimes

IOSCO Compliance- Cross Border Listing of Securities

Enable Structured Uniform Presentation of FS

Encourage Global Investment Opportunities

Facilitate Cross-border Mergers and Acquisitions

Credibility of FS by Regulators & Stakeholders

Reduce Capital Cost for Foreign Companies Ensure Global Comparability of Financial

Statements - Accounting Principles, Treatment

(Recognition & Measurement)

- Presentation/Disclosure of Items in FS

19

BENEFITS OF IFRS HARMONIZATION BENEFITS OF IFRS HARMONIZATION Global Comparability of Financial Information

Access to Foreign Capital Markets Credibility of Domestic Capital Markets for

FDI Reduced Cost of Capital to Foreign Companies

Compliance with GATS/WTO Provisions Greater Objectivity in Audit of FS Reduced National Standard setting Costs. Local Implementation Guidelines,

Adaptation Global Professional Credentials

- Transparency - Understandability

- Relevance - Reliability

20

HARMONIZATION BENEFITS TO HARMONIZATION BENEFITS TO

MULTINATIONALSMULTINATIONALS Improved Accessibility to Foreign Investor Funds.

Improved Management Control

Enhanced Appraisal Facilitation

Ensures Foreign Stock Exchanges Compliance

Permits Consolidation of Subsidiaries and Associates

Audit Costs Reduction

Transferability/Mobility of Accounting Personnel

Determination of Global Tax Assessments 21

HARMONIZATION OF AUDITING PRACTICES HARMONIZATION OF AUDITING PRACTICES

General Considerations

Stewardship System of Financial Reporting

Audit Administration Methodology

Significance of ISA Harmonization

Benefits of ISA Harmonization

22

ACCOUNTABILITY FOR STEWARDSHIP SYSTEM ACCOUNTABILITY FOR STEWARDSHIP SYSTEM OF FINANCIAL REPORTINGOF FINANCIAL REPORTING

ShareholderShareholderss

ShareholderShareholderss

DirectorsDirectorsDirectorsDirectors

Au

dit

or

Au

dit

or

Au

dit

or

Au

dit

or

OwnershiOwnershipp

OwnershiOwnershipp

ManagementManagementManagementManagement

23

AUDIT ADMINISTRATION PROCESSAUDIT ADMINISTRATION PROCESS

24

Knowledge of Business Risk Assessment Letter of Engagement

Accounting System & Internal Control

Planning

Controlling

Documentation

Evidencing

Review of Financial Statements

Post Audit Review

Audit Report

Commencement of Audit

Initial Discussion

Audit Methodology

Completion of Audit

Submission of Audit Report

HARMONIZATION OF PUBLIC SECTOR HARMONIZATION OF PUBLIC SECTOR ACCOUNTING AND AUDITING PRACTICESACCOUNTING AND AUDITING PRACTICES

Objectives & Dimensions

Strengthening PSFM/Public Sector Accg & Audit

OCAG Accounting & Auditing Function

Implementation of D.E. Accrual Accounting

Application of IPSAS in PS Accounts

Application of ISSAIs in PS Audits

Performance Audit/Environment/Forensic Audits

25

GOVT / PUBLIC SECTOR FINANCIAL ACCOUNANTABILITY

StakeholdersStakeholdersStakeholdersStakeholders Govt. Agencies Govt. Agencies Govt. Agencies Govt. Agencies ConstitutionConstitutionConstitutionConstitution

SAI / CAG SAI / CAG SAI / CAG SAI / CAG

OwnershipOwnershipOwnershipOwnership CitizensCitizensCitizensCitizens

CAG FUNCT ACT-1974CAG FUNCT ACT-1974CAG FUNCT ACT-1974CAG FUNCT ACT-1974

26

PUBLIC SECTOR PURVIEW PUBLIC SECTOR PURVIEW IPSASB Framework“Public sector refers to Governments, Regional

Government, Local Governments & Related Government entities including Agencies, Boards, Commissions & Enterprises”

Bangladesh Public Sector - All Arena of Public Services: Government Ministries Divisions /Directorates / Departments Government Sub-Ordinate Offices Local Government Authorities Autonomous/Semi-Autonomous Bodies Public Sector Corporations Foreign Aided Projects (SCOPE/SPEMP B) State Owned Enterprises (SOEs) State Owned Bank (SOB) Hospitals/Educational Institutions etc. LGIs –City corps, Municip, UPs

27

IMPORTANCE OF FINANCIAL REPORTING SYSTEM IMPORTANCE OF FINANCIAL REPORTING SYSTEM FOR GOVERNMENTS / PUBLIC SECTORFOR GOVERNMENTS / PUBLIC SECTOR

Increased Accountability/Transparency of Public Funds

Developing Public Sector Awareness of Govt. Spending

Credibility of Financial Information for Public Trust

Timeliness for Good Governance and Decisions

Increased Credibility for Attracting FDI

Assurance to Development Partners

Improved Sovereign Rating Awards

Efficient Financial Reporting System for Economic Development & Public Welfare.

28

GOVERNMENT PUBLIC SECTOR REPORTING GOVERNMENT PUBLIC SECTOR REPORTING - CASH / ACCRUAL ACCOUNTING- CASH / ACCRUAL ACCOUNTING

Cash Flows

Budget

Revenues,

Expenses

Budget

Assets,

Liabilities

Estimate

Revenues,

Expenses Actuals

Assets, Liabilities

Actuals

Cash Flows Actuals

Cash Accounting

(SE)

Accrual Accountin

g(DE)

29

CASH-BASIS IPSAS: TRANSITION STEP TO CASH-BASIS IPSAS: TRANSITION STEP TO ACCRUAL IPSAS (OCAG BANGLADESH)ACCRUAL IPSAS (OCAG BANGLADESH)

Accrual Accounting IPSAS 1-32

(Accrual DE)

Cash-Basis IPSAS

(Transition Step)

Current policies

(Cash SE )

30

ACCRUAL AND CASH ACCOUNTING : AN INTEGRATIVE APPORACH

Accrual and Cash

Accounting are

Fully Integrated Accrual and Cash

Accounting are

Fully Integrated Adoption of

Cash-Basis IPSAS

is Facilitated

Adoption of

Cash-Basis IPSAS

is Facilitated Requiring Direct

Method Cash Flow

Statement Requiring Direct

Method Cash Flow

Statement

31

PUBLIC SECTOR AUDITOR’S ROLE

Determining Oversight

Facilitating Foresight

Increasing Insight

Conducting Objective Independent Financial Audit

Conducting Performance/VMA Environment and IT Audit

Enhancing Economy, Efficiency & Effectiveness of Resources Utilization of Audit Entities

Meet Expectations of Development Partners

Ensuring Transparency of Financial Information

Assuring Accountability of Management Decisions

Combating Corruption, Misuse & Wastage 32

PUBLIC SECTOR AUDIT FOCUS

Emphasis on Expenditure

Availability of Budget

Authorization By Competent Authority

Payment Acknowledged By Right Person

Government Rules And Procedures Complied

Expenditures Properly Classified

Justification Of Expenditures

Emphasis on Cash Expenditures And Cash

Income - Not on Accruals (Cash Basis IPSAS)

33

PROSPECTIVE HARMONIZATION NEEDS

Harmonization for SME Reporting

Harmonization for NGO/MFIs Reporting

Harmonization for Sustainability Reporting

Harmonization for Integrated Reporting

Harmonization for Alternative Financial System

Harmonization for Other Forms of Reporting Entities

34

REGIONAL HARMONIZATION OF FINANCIAL REGIONAL HARMONIZATION OF FINANCIAL REPORTING AND AUDIT PRACTICES REPORTING AND AUDIT PRACTICES

South Asian Federation of Accountants (SAFA)

Confederation of Asian & Pacific Accountants (CAPA)

Role of Regional Harmonization Role

Standardization of Adoption Process

SAFA BPA & CG Awards – Positive Dimension

ICAB National Awards for BPA&R – Catalyst for Best Presented Corporate Reports (Highest Winner in SAFA contest)

35

INSTITUTIONAL LEGAL REGULATORY INSTITUTIONAL LEGAL REGULATORY

FRAMEWORKS IN BANGLADESH FRAMEWORKS IN BANGLADESH

Responsibility for Preparation & Audit of FS

Legal Regulatory Framework

- CA/SER/BCA/IA/Listing Rules

- RJSC/SEC/BB/IDRA/Stock Exchanges

ICAB - Role / Bye Laws

Current Adoption Status – (Appendices)

Legal Enforceability of Standards

Implementation Status of Standards

36

Annual FS are prepared and presented within a framework of recognized accounting principles,

rules and regulations some mandatory some recommendatory.

CA 1994 provides basic requirements for accounting and reporting of all companies - Silent about IAS/BAS.

SER 1987 [Rule 12 (2) & (3)] requires mandatory compliance with the adopted IAS/IFRS and the ISA.

BCA ‘91 mandates reporting formats and disclosures

IA ‘12 Compliance requirements

Govt Orders – Public Sector corporations/SOEs/SOBs

NGOs and MFIs Accounting and Reporting

Tax Laws Effecting FR Presentation (Non-Listed)

FINANCIAL REPORTING IN BANGLADESH FINANCIAL REPORTING IN BANGLADESH

REGULATORY AND INSTITUTIONAL REGULATORY AND INSTITUTIONAL FRAMEWORK FRAMEWORK

37

Total IAS Extant = 29

Total Adopted = 28

Not Adopted = 01 (Hyperinflation)

Total IFRS Issued = 13

Total Adopted = 12

Not Adopted = 01 (Fin Ins)

IFRS on SMEs = Adopted (1-1-13)

IPSAS Issued 33 = Not Considered by ICAB(Cash IPSAS by OCAG)

SIC/IFRIC = Not Adopted by ICAB

ADOPTION STATUS OF STANDARDS ADOPTION STATUS OF STANDARDS

IAS/IFRS & IPSAS = Appendix I & IIIIAS/IFRS & IPSAS = Appendix I & III

38

Total ISA Issued/Extant 36=All Adopted

  IAPS Issued & Adopted = 8

ISA Framework, BSQC1, Glossary = Adopted

IFAC Code of Ethics, BSQC1 = Adopted

IFAC SMOs (7) = Fully Compliant

ISSASIs Issued 37 = Not Considered by ICAB(Implemented by OCAG)

ADOPTION STATUS OF STANDARDS ADOPTION STATUS OF STANDARDS

ISA /IAPs & ISSAIs – Appendix II & IVISA /IAPs & ISSAIs – Appendix II & IV

39

Legal Mandate –

Statutorily Enforceable for listed companies under SEC Rules 1987 (including Banks, Insur Cos & NBFIs). No legal observance requirement in CA/other statutes

Professional Mandate –

Not yet professionally mandatory/Enforceable through CA Bye-Laws 1973

Other Considerations

ENFORCEABILITY STATUS OF ADOPTED ENFORCEABILITY STATUS OF ADOPTED

STANDARDSSTANDARDS

40

Challenges/Limitations of Harmonization

= Refer Conference Paper

Major Challenges

Opportunities /Prospects

= Refer Conference Paper

Major Prospects

CHALLENGES AND PROSPECTS OF CHALLENGES AND PROSPECTS OF

HARMONIZATION IN BANGLADESH HARMONIZATION IN BANGLADESH

41

Major Challenges - Standard Setting/Adoption stage

MAJOR CHALLENGESMAJOR CHALLENGES

Speedy adoption of IFRS & ISA suffers from lack of technical and financial resources.

Existing laws sometime contrary to IFRS provisions, acting as major impediments to the adoption process.

Fair Value Accounting Limitations – market imperfections; lack of familiarization, information flow and reliability of available data & stats.

42

Major Challenges at Implementation Stage

MAJOR CHALLENGESMAJOR CHALLENGES

Management Mindset –Averse to Changes Lack of awareness, understanding & application

skills by preparers and auditors about IAS/IFRS and ISA

Lack of accountability of management decisions and transparency of financial information

Lack of resources, knowledge, technical skills and competence of regulatory agencies to monitor /enforce compliances with Standards.

43

MAJOR CHALLENGESMAJOR CHALLENGES

Need for constant updating Fund and technical resource constraints to

monitor implementation of IAS/IFRS & ISA Lack of mandatory legal compliance provisions Lack of implementation guidelines for BAS/BFRS Low level of audit fees Demand–supply gap of qualified accountants FVA limitations-market imperfections Concerted training program on IAS/IFRS and ISA Capacity building and institutional development of

regulatory agencies and professional bodies Technical assistance for training Mandate Professional enforceability of standards

44

MAJOR PROSPECTS MAJOR PROSPECTS

Mindset Changes – Regulators/Business Entities Transformation of Corporate Culture Significant Improvement in Financial Reporting

Practices SAFA BPA & CG Awards- Positive Dimension ICAB National Awards for BPAR- Catalyst for

Remarkable Corporate Reporting Harmonization Corporate Governance Practices Role of SAFA/CAPA in Regional Harmonization Credit Rating Requirement QAB -Incentivization for Harmonization Proactive Role of ICAB :

- PPP for Improved Quality Assurance with OCAG

- Training of NBR/BB Officials/ Others Agencies

45

Policy Issues & Recommendations

= Refer Conference Paper

Major Issues & Recommendations

NO FRA / FRC B

= Superimposition of Redundant Oversight

Body

POLICY ISSUES & RECOMMENDATIONS POLICY ISSUES & RECOMMENDATIONS

46

Composition of multi-disciplinary Task Force for HFR&AP

Different reporting regimes need to be established for: Public limited companies (listed & unlisted)

Large private companies

Small & medium sized entities (SMEs)

State owned enterprise (SOEs)

NGOs & MFIs

Other Forms of entities- Cooperatives

MAJOR ISSUES AND RECOMMENDATIONSMAJOR ISSUES AND RECOMMENDATIONS

47

Strategic Project - capacity building/institutional development project should be undertaken of ICAB

TRC & QAB of ICAB should be strengthened

Effective Seminars/Workshops – Stds Dissemination

Preparation of Implementation Guidelines for Stds

Listed Cos must employ qualified accountants

Audit/Professional Fees Enhancement

Awareness of IAS/IFRS & ISA in Entities & Auditors

SAFA/CAPA platform for regional

Harmonization

Mandatory implementation of Corporate

Governance practices (codes) for

strengthening HFR&AP

Broadening credit rating mandate

Refer Conference Paper

MAJOR ISSUES AND RECOMMENDATIONSMAJOR ISSUES AND RECOMMENDATIONS

48

Enabling Environment for Application of Standards

Capacity Building/Strengthening of Institutions

Regulatory Mandate for Application of Standards

Establish SEC/ICAB Joint Monitoring Board

Stimulate Changes Leadership Decisions for HFR&AP

Strengthening Learning Partnership with ICAEW

OCAG PPP for Improved AQA Knowledge Sharing

Impart Knowledge Sharing Training (NBR/BB)

Adequate Implementation of ICAB Strategic Plans

Finalization of ICAB Council Composition Reforms

Top Priority – No Superimposition of FRC

THE WAY FORWARDTHE WAY FORWARD

49

Application of harmonized Standards impact positive dimension for achievement of qualitative characteristics to reflect high quality globally comparable true & fair view Financial Statements

Standard-setting/adoption should be sustained as a progressively continuous process

Government must legislate, the Business, Profession and Regulators must work cohesively to ensure convergence onto IAS/IFRS & ISA - thereby playing their due roles for HFR&AP

Think global > See regional > Act local

CONCLUSION CONCLUSION

50

Will IR get off the ground ?

Looks Like –Yes,(If so-How and When ? Implications ?)

(If not –Reasons & Remedies ?)

HAPPY FINANCIAL REPORTING HAPPY FINANCIAL REPORTING AND AUDIT PRACTICESAND AUDIT PRACTICES

HARMONIZATION HARMONIZATION

ENHANCE THE PROFESSIONAL IMAGEENHANCE THE PROFESSIONAL IMAGEMEET CHALLENGES & UTILIZE MEET CHALLENGES & UTILIZE

OPPORTUNITIES OPPORTUNITIES

ALL THE VERY BESTALL THE VERY BEST

APENDICESAPENDICES

IAS/ BAS

Title of Adopted IAS as BAS Effective Date-Applicable on or after

1 Presentation of Financial Statements 1 Jan 2007

2 Inventories 1 Jan 2007

7 Statement of Cash Flows 1 Jan 1999

8 Accounting Policies, Changes in Accounting Estimates and Errors

1 Jan 2007

10 Events After the Reporting Period 1 Jan 1999

11 Construction Contracts 1 Jan 1999

12 Income Taxes 1 Jan 1999

16 Property, Plant and Equipment 1 Jan 2007

17 Leases 1 Jan 2007

18 Revenue 1 Jan 2007

19 Employee Benefits 1 Jan 2004

20 Accounting for Government Grants and Disclosure of Govt Assc

1 Jan 1999

21 The Effects of Changes in Foreign Exchange Rates

1 Jan 2007

Appendix I (A) - Adoption Status of International Accounting Standards Appendix I (A) - Adoption Status of International Accounting Standards

(IAS) by ICAB as Bangladesh Accounting Standards (BAS)(IAS) by ICAB as Bangladesh Accounting Standards (BAS)

53

IAS/ BAS

Title of Adopted IAS as BAS Effective Date-Applicable on or

after23 Borrowing Costs 1 Jan 201024 Related Party Disclosures 1 Jan 200726 Accounting and Reporting by Retirement

Benefit Plans 1 Jan 2007

27 Consolidated and Separate Financial Statements

1 Jan 2010

28 Investments in Associates 1 Jan 200729 Financial Reporting in Hyperinflationary

EconomicsNot adopted

31 Interests in Joint Ventures 1 Jan 200732 Financial Instruments: Presentation 1 Jan 201033 Earnings per Share 1 Jan 200734 Interim Financial Reporting 1 Jan 199936 Impairment of Assets 1 Jan 200537 Provisions, Contingent Liabilities and

Contingent Assets 1 Jan 2007

38 Intangible Assets 1 Jan 200539 Financial Instruments: Recognition and

Measurement 1 Jan 2010

40 Investment Property 1 Jan 200741 Agriculture 1 Jan 2007

54

SL # IFRS / BFRS

Title of Adopted IFRS as BFRS Effective Date- Applicable on or after

1 BFRS 1 First-time Adoption of IFRS 1 Jan 20092 BFRS 2 Share-based Payment 1 Jan 20073 BFRS 3 Business Combinations 1 Jan 20104 BFRS 4 Insurance Contracts 1 Jan 20105 BFRS 5 Non-current Assets Held for Sale

and Discontinued Operations 1 Jan 2007

6 BFRS 6 Exploration & evaluation of Mineral Resources

1 Jan 2007

7 BFRS 7 Financial Instruments: Disclosures

1 Jan 2010

8 BFRS 8 Operating Segments 1 Jan 20109 IFRS 9 Financial Instruments Not Adopted10 BFRS 10 Consolidated Financial

Statements1 Jan 2013

11 BFRS 11 Joint Arrangements 1 Jan 201312 BFRS 12 Disclosure of Interests in Other

Entities13 BFRS 13 Fair Value Measurement 1 Jan 2013

IFRS for SMEs BFRS for SMEs (Small Medium Size Entities)

1 Jan 2013

Appendix I (B) - Adoption Status of International Financial Reporting Appendix I (B) - Adoption Status of International Financial Reporting

Standards (IFRS) by ICAB as Bangladesh Financial Reporting Standards (BFRS)Standards (IFRS) by ICAB as Bangladesh Financial Reporting Standards (BFRS)

55

Sl. # ISA/BSA

ISA/ BSA Title

1 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with ISA

2 210 Agreeing the Terms of Audit Engagements3 220 Quality Control for an Audit of Financial Statements4 230 Audit Documentation

5 240 The Auditor's Responsibilities Relating to Fraud in an Audit of Financial Statements

6 250 Consideration of Laws and Regulations in an Audit of Financial Statements

7 260 Communication with Those Charged with Governance8 265 Communicating Deficiencies in Internal Control to Those

Charged with Governance and Management9 300 Planning an Audit of Financial Statements10 315 Identifying & Assessing Risks of Material Misstatement -

Understanding Entity and its Environment11 320 Materiality in Planning and Performing an Audit12 330 The Auditor’s Responses to Assessed Risks13 402 Audit Considerations Relating to Entities Using Service

Organization

Appendix- II (A) - Adoption Status of International Standards on Auditing Appendix- II (A) - Adoption Status of International Standards on Auditing

(ISA) by ICAB as Bangladesh Standards on Auditing (BSA)(ISA) by ICAB as Bangladesh Standards on Auditing (BSA)

56

Sl. # ISA/BSA

ISA/ BSA Title

14 450 Evaluation of Misstatements Identified during the Audit

15 500 Audit Evidence16 501 Audit Evidence—Specific Considerations for Selected

Items17 505 External Confirmations18 510 Initial Audit Engagements—Opening Balances19 520 Analytical Procedures20 530 Audit Sampling21 540 Auditing Accounting Estimates, Including Fair Value

Accounting Estimates, and Related Disclosures

22 550 Related Parties23 560 Subsequent Events24 570 Going Concern25 580 Written Representations26 600 Special Considerations—Audits of Group FS (including

Work of Component Auditors)27 610 Using the Work of Internal Auditors

28 620 Using the Work of an Auditor’s Expert

29 700 Forming an Opinion and Reporting on Financial Statements

57

Sl. # ISA/BSA

ISA/ BSA Title

30 705 Modifications to the Opinion in the Independent Auditor’s Report

31 706 Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report

32 710 Comparative Information—Corresponding Figures and Comparative FS

33 720 The Auditor’s Responsibilities Relating to Other Information in Documents Containing Audited FS

34 800 Special Considerations—Audits of FS Prepared in Accordance with Special Purpose Frameworks

35 805 Special Considerations –Audits of Single FS and Specific Elements, Accounts or Items of FS

36 810 Engagements to Report on Summary Financial Statements Total BSA / Code of Ethics /BSQC 1 /Framework

58

Sl. # IAPS/

BAPS

BAPS Title

1 1000 Inter-Bank Confirmation Procedures

2 1004 The Relationship Between Banking Supervisors

and Banks’ External Auditors

3 1005 The Special Considerations in the Audit of Small

Entities(withdrawn in 2010)

4 1006 Audits of the Financial Statements of the Banks

5 1010 The Consideration of Environmental Matters in

Audit of Financial Statements

6 1012 Auditing Derivative Financial Statements

7 1013 Electronic Commerce-Effect on the Audit of

Financial Statements

8 1014 Reporting by Auditors on Compliance with IFRS

(withdrawn in 2010)

Appendix II (B) - Adoption Status of International Auditing Practice Statements Appendix II (B) - Adoption Status of International Auditing Practice Statements

(IAP by ICAB as Bangladesh Auditing Practice Statements (BAPS)(IAP by ICAB as Bangladesh Auditing Practice Statements (BAPS)

59

Cash Basis IPSAS—Financial Reporting Under the Cash Basis of

Accounting

IPSAS 1—Presentation of Financial Statements

IPSAS 2—Cash Flow Statements

IPSAS 3—Accounting Policies, Changes in Accounting Estimates

and Errors

IPSAS 4—The Effects of Changes in Foreign Exchange Rates

IPSAS 5—Borrowing Costs

IPSAS 6—Consolidated and Separate Financial Statements

IPSAS 7—Investments in Associates

IPSAS 8—Interests in Joint Ventures

IPSAS 9—Revenue from Exchange Transactions

IPSAS 10—Financial Reporting in Hyperinflationary Economies

IPSAS 11—Construction Contracts

IPSAS 12—Inventories

IPSAS 13—Leases

IPSAS 14—Events after the Reporting Date

IPSAS 15—Financial Instruments: Disclosure and Presentation

IPSAS 16—Investment Property

Appendix III - International Public Sector Accounting Standards (IPSAS) 2011 Appendix III - International Public Sector Accounting Standards (IPSAS) 2011

(Not Adopted by ICAB)(Not Adopted by ICAB)

60

Cash Basis IPSAS—Financial Reporting Under the Cash Basis of

Accounting

IPSAS 17—Property, Plant, and Equipment

IPSAS 18—Segment Reporting

IPSAS 19—Provisions, Contingent Liabilities and Contingent Assets

IPSAS 20—Related Party Disclosures

IPSAS 21—Impairment of Non-Cash-Generating Assets

IPSAS 22—Disclosure of Financial Information about the General

Government Sector

IPSAS 23—Revenue from Non-Exchange Transactions (Taxes and

Transfers)

IPSAS 24—Presentation of Budget Information in Financial Statements

IPSAS 25—Employee Benefits

IPSAS 26—Impairment of Cash-Generating Assets

IPSAS 27—Agriculture

IPSAS 28—Financial Instruments: Presentation

IPSAS 29—Financial Instruments: Recognition and Measurement

IPSAS 30—Financial Instruments: Disclosures

IPSAS 31—Intangible Assets

IPSAS 32—Service Concession Arrangements - Guarantor

Appendix III - International Public Sector Accounting Standards (IPSAS) 2011 Appendix III - International Public Sector Accounting Standards (IPSAS) 2011

(Not Adopted by ICAB)(Not Adopted by ICAB)

61

ISSAI 1000 – General Introduction to the INTOSAI Financial Audit

Guidelines

ISSAI 1003 – Glossary of Terms to the INTOSAI Financial Audit

Guidelines

ISSAI 1200 – Overall Objectives of the Independent Auditor and

Conduct of Audit in Accordance with ISA

ISSAI 1210 – Agreeing the Terms of Audit Engagements

ISSAI 1220 – Quality Control for an Audit of Financial Statements

ISSAI 1230 – Audit Documentation

ISSAI 1240 – The Auditor’s Responsibilities Relating to Fraud in an

Audit of Financial Statements

ISSAI 1250 – Consideration of Laws and Regulations in an Audit of

Financial Statements

ISSAI 1260 – Communication with Those Charged with Governance

ISSAI 1265 – Communicating Deficiencies in Internal Control to Those

with Governance and Management

ISSAI 1300 – Planning an Audit of Financial Statements

ISSAI 1315 – Identifying and Assessing Risks of Material

Misstatements by Understanding Entity Environment

Appendix IV- INTOSAI International Standards of Supreme Audit Institutions Appendix IV- INTOSAI International Standards of Supreme Audit Institutions

(ISSAI). Not Adopted by ICAB/ Implemented by OCAG?(ISSAI). Not Adopted by ICAB/ Implemented by OCAG?

62

ISSAI 1000 – General Introduction to the INTOSAI Financial Audit

Guidelines

ISSAI 1320 – Materiality in Planning and Performing an Audit

ISSAI 1330 – The Auditor’s Responses to Assessed Risks

ISSAI 1402 – Audit Considerations Relating to an Entity Using a

Service Organization

ISSAI 1450 – Evaluation of Misstatements Identified during the

Audit

ISSAI 1500 – Audit Evidence

ISSAI 1501 – Audit Evidence – Specific Considerations for Selected

Items

ISSAI 1505 – External Confirmations

ISSAI 1510 – Initial Audit Engagements – Opening Balances

ISSAI 1520 – Analytical Procedures

ISSAI 1530 – Audit Sampling

ISSAI 1540 – Auditing Accounting Estimates, Including Fair Value

Accounting Estimates and Related Disclosures

ISSAI 1550 – Related Parties

ISSAI 1560 – Subsequent Events

ISSAI 1570 – Going Concern

ISSAI 1580 – Written Representations

Appendix IV- INTOSAI International Standards of Supreme Audit Institutions Appendix IV- INTOSAI International Standards of Supreme Audit Institutions

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ISSAI 1000 – General Introduction to the INTOSAI Financial Audit

Guidelines

ISSAI 1600 – Special Considerations – Audits of Group Financial

Statements (Incl. Work of Component Auditors)

ISSAI 1610 – Using the Work of Internal Auditors

ISSAI 1620 – Using the Work of an Auditor’s Expert

ISSAI 1700 – Forming an Opinion and Reporting on Financial

Statements

ISSAI 1705 – Modifications to the Opinion in the Independent

Auditor’s Report

ISSAI 1706 – Emphasis of Matter Paragraphs and Other Matter

Paragraphs in Independent Auditor’s Report

ISSAI 1710 – Comparative Information – Corresponding Figures

and Comparative Financial Statements

ISSAI 1720 – The Auditor’s Responsibilities Relating to Other

Information in Documents Containing Audited FS

ISSAI 1800 – Special Considerations – Audits of FS Prepared in

Accordance with Special Purpose Frameworks

ISSAI 1805 – Special Considerations – Audits of Single FSt and

Specific Elements, Accounts or Items of FS

ISSAI 1570 – Going Concern

Appendix IV- INTOSAI International Standards of Supreme Audit Institutions Appendix IV- INTOSAI International Standards of Supreme Audit Institutions

(ISSAI). Not Adopted by ICAB/ Implemented by OCAG?(ISSAI). Not Adopted by ICAB/ Implemented by OCAG?

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