Written by The Banking Post
The securities regulator is set to crack down on six audit firms accused of certifying fabricated financial statements of scam-hit listed companies.
According to the Bangladesh Securities and Exchange Commission (BSEC), the firms—A Hoque & Co., Ahmad & Akhtar Co., Mahfel Huq & Co., Ata Khan & Co., Shiraz Khan & Basak & Co., and Islam Quazi Shafique & Co.—ignored glaring anomalies and breaches of securities rules while auditing accounts.
“These firms often failed to perform their due role,” said a BSEC spokesperson, adding that hearings will be held before declaring them disqualified for five years from auditing listed companies, mutual funds, and ETFs.
Investigations linked the auditors to window-dressed statements from companies like Ring Shine Textiles and Shurwid Industries. Despite consecutive losses, Shurwid suddenly reported profits in FY18 and FY19, which the regulator deemed irrational. Similarly, Ring Shine showed profits in FY20 before collapsing into massive losses, while its owners fled after embezzling investors’ money.
BSEC officials noted that auditors were expected to issue qualified opinions or red-flag anomalies but instead signed off on misleading accounts. “That’s why the financial statements failed to reflect the companies’ actual positions,” one official said.
The regulator has already shared evidence with the Financial Reporting Council (FRC) and the Institute of Chartered Accountants of Bangladesh (ICAB), which took action against some auditors. But BSEC says enforcement has been weak, as other partners in the same firms continued similar misconduct.
If explanations from the firms fail to satisfy, the watchdog plans to restrict them from all capital market audit work for five years—marking one of the toughest regulatory actions against auditors in recent years.
