Auditors' Independence in Bangladesh

7/28/2019 Auditors' Independence in Bangladesh

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02 April 12 Monday

04:30:01


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A Study on ACNABIN Chartered Accountants Firm

Auditors Independence

Prepared By:

Md. Ejaj-Ur-RahamanID : 082-11-326


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Primary/General Objective:

The main objective of the study is to know about the Auditors

Independence through a study on ACNABIN-Chartered

Accountants Firm.


Objectives of the Study


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Secondary Objectives

To obtain knowledge about the auditors independence

risk measured by ACNABIN.

To know the factors that impairs auditors independence.

To suggest future critical needs for the improvement of

theAuditors Independence.

Objectives of the Study


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Methodology of the Study

Nature of the Study:


An exploratory

research.

Data Used:

Primary Data

Secondary Data


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Methodology of the Study


Primary Data

Collection Method

- Questionnaire

method

Target Population:

articled students, audit managers, managing partners and clients of

the firm.

Sampling Technique

- non probability

judgment sampling


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Audit

Auditor

Independence

Auditor's Independence


-The purpose of an audit is to enhance the credibility of

financial statement by providing written reasonable

assurance

- An independent examination of financial

statements.


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Auditor

Independence


Audit


-A person who conducts an audit. Also refers

a listener , an observer


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Independence


Audit

Auditor


-Not influenced or controlled by others in matters of

opinion, conduct etc.

Independent


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Audit

Auditor

Independence


The purpose of an audit is to enhance the credibility of

financial statements by providing written reasonable

assurance from an independent source that they

present a true and fair view in accordance with

accounting standard.


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Independence of Mind (Real Independence)

Independence in Appearance (Perceived Independence)

Cornerstone of the auditing profession.

Foundation of the publics trust in the accounting

profession.


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Independence in Appearance

(Perceived Independence)

Independence of Mind

(Real Independence)

BSA (para: 290.8)

Ethics morally right or wrong


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Independence in Appearance

(Perceived Independence)

Independence of Mind

(Real Independence)

BSA (para: 290.8)

Together, both forms are essential to achieve the goals of independence.


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Factors that ImpairsAuditors

Independence

Financial Interests (BSA Para 290.104)

financial investments- SEC found that

KPMG violated the auditor independence

Business Relationships

Family and Personal Relationships



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Factors that ImpairsAuditors

Independence

Non-audit Services

Bookkeeping

Tax Consultancy

Internal Audit Service



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Exceptions


to Inheritance and gifts.


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STATE OF AFFAIRS IN

ACNABIN Chartered Accountants Firm


Audit Services

Annual/Statutory/Interim audit 40%

Total Turnover through Audit Services 40%

Non-Audit Services

Accounts preparation (including data processing and book-keeping) 10%

Tax 20%

Insolvency 10%

Financial Advisory Services 15%

Management Advisory Services 05%

Total Turnover through Non-Audit Services 60%

Total 100%

Turnover Partition


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Tests of Prominent Non-Audit Services provided by ACNABIN


STATE OF AFFAIRS IN



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Test of confirmation from the audit staffs regarding independent

relationship status with clients they are auditing


STATE OF AFFAIRS IN



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Findings

Unhealthy monitoring system of ICAB.

Extermination of Peer Assessment/Audit

Interested to continue audit relationship year after year.

1.

2.

3.


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Findings

Extinction of fee-setting regulatory body.Positively, ACNABIN doesnt engage itself in auditing

with whom they have financial or business relationship.

Unwilling to disclose non-audit fees & services.4.

5.

6.


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Possible Future Developments

Rotating External Auditors

Peer Assessment

Service Limitations

Disclosure Rules

Fee setting regulatory body


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The End

Auditors' Independence in Bangladesh

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