History of auditing in Bangladesh explained

1. History Of Auditing in
Bangladesh
Souman Guha

2. Introduction
• The purpose of govt. audit is to ensure transparency and accountability in the use
of resources in all types of govt. management.
• The objectives of audit work includes verification of statements of accounts and
statement of income and expenditure to determine whether these are prepared
truly and correctly
Background
• The major concerns in the context of public financial management in Bangladesh have always been to see
how well the scarce public resources are utilized
• The stakeholder expect that the audit office provide them with more information in the line of 3Es
History Of Auditing in Bangladesh

3. AUDIT IN BANGLADESH
• In Bangladesh , the Office of the Comptroller and Auditor General(C&AG) is the
supreme audit institution and it is the only body entrusted to carry out the
performance audit.
• The legal authority of C&AG to carry out the performance audit derives from two
main sources

4. (a)FinancialAudit
The purpose of conducting a financial audit is to give an opinion on whether the financial statement
prepared by the public sector agencies shows a true and fair view of the financial position.
(b) Compliance Audit
Compared to a financial audit, it is not compulsory for the compliance audit to be conducted to all
government agencies yearly. This type of audit is performed on cyclical basis. Incompliance auditing, the
Auditor General will examine and review the transactions and activities of ministries/departments or
agencies to determine whether they have conformed to all laws and regulations. For example, the Auditor
General verifies whether the income and expenditures of government departments have been authorized
and spent for the designated purposes.
c)PerformanceAudit
The performance audit involves studies and evaluation of specified programs or activities of ministries/department and
other government agencies. This is to determine whether the objectives of the programs or activities are achieved and
whether the implementation of the programs and activities were carried out in an economical, efficient and effective
manner. For the purpose of this research, performance audit was selected as the subject due to its importance of its
functions to the public sector community.

5. • In Bangladesh, the profession of accountancy developed during the British colonial period. The basic
requirements for financial reporting by all companies in Bangladesh are provided by the Companies Act of
1994. [ Today, it is represented by two professional bodies, the Institute of Cost & Management Accountants of
Bangladesh (ICMAB) and the Institute of Chartered Accountants of Bangladesh (ICAB).
• The sole regulator of accountants and auditors in Bangladesh under the Bangladesh Chartered Accountants
Order of 1973 was the Institute of Charted Accountants (ICAB).

6. Auditing tomorrow
• Auditing tomorrow will be defined by more sophisticated software with
the same functions as the CAATs (computer assisted audit tools) and many
more functions to eliminate completely the use of paper tray and focus
more on systems audit.
• The use of rudimentary CAATS will eventually be questioned in terms of
audit utility. Fortunately, the idea of the future audit is not a recent
phenomenon and there are a variety of methodologies that have been
proposed to reach this plateau, such as: Embedded Audit Modules (EAM),
Monitoring and Control Layer (MCL), Audit Data Warehouse (ADW), and
Audit Applications Approach

7. • An enterprise that moves toward greater automation relative to data, processes, controls, and
monitoring tools begins to naturally structure itself for the coming of the future audit.
• Investors will also demand independent assurances about the reliability of that information in
stead of backward looking audit making it an outdated philosophy. Consequently, the need for a
24/7 auditing protocol becomes apparent if firms intend to compete for scarce resources and
ultimately succeed in the current and evolving real-time global economy.
• The past indeed influenced the present and subsequently the future will entail more
sophisticated software therefore auditors should strive towards understanding their roles as
these have been the main bane in audit history.