Background

The Financial Reporting Council (FRC) of Bangladesh was established under the Financial Reporting Act, 2015 as an autonomous regulatory body to strengthen financial reporting, auditing, valuation, actuarial and governance practices. The Council comprises representatives from the government, regulators, professional bodies, academia, and the private sector, ensuring a multi-stakeholder approach and maintaining independence.

The FRC’s mandate covers public and private entities and includes the following responsibilities:

● Setting and adopting accounting, auditing, valuation and actuarial standards aligned with international best practices.

● Monitoring financial reporting to promote transparency, good governance, and reliable financial reporting across different sectors.

● Registering and monitoring auditors and audit firms to ensure audit quality.

● Enforcing compliance and taking disciplinary action against professional misconduct.

● Coordinating with regulators such as Bangladesh Bank, BSEC, IDRA, NBR, RJSC, etc. to ensure consistent oversight.

Accounting and Auditing Standards

FRC Bangladesh adopted IFRS Accounting Standards for financial reporting in Bangladesh jurisdiction. Publicly accountable entities such as banks, insurance companies, and NBFIs are required to use these standards. Banks and financial institutions follow industry-specific guidelines issued by their respective regulators, which are mostly based on IFRS Accounting Standards with slight modifications due to jurisdictional requirements.

For auditing, the FRC Bangladesh adopted auditing and assurance standards (ISA, ISAE, ISRE, ISRS, ISQC, ISQM, IAPN, code of ethics, IIS) issued by IFAC.

Sustainability Disclosure Standards

In December 2023, Bangladesh Bank issued the Guideline on Sustainability and Climate-related Financial Disclosure, requiring all banks and financial institutions to implement IFRS S1 and IFRS S2 from January 2024.

The FRC is also exploring opportunities to extend sustainability-related reporting standards to other sectors to support broader ESG transparency.

Future Priorities

The FRC is focusing on strengthening audit inspection and enforcement mechanisms to improve accountability and quality across the auditing profession. It is also broadening the implementation of sustainability and climate-related disclosure standards and promoting the use of digital financial reporting tools, such as XBRL, to enhance transparency and data accessibility.

Additionally, the Council aims to improve coordination among financial sector regulators for consistent oversight, while building institutional capacity and enhancing stakeholder confidence in the overall quality of financial reporting in Bangladesh.