Frame Work for Accounting Standard in Bangladesh

Introduction

The International Accounting Standards was founded in April 1, 2001. It is a set of standards stating how particular types of transactions and other events should reflect in financial statements.

In the past years, the IAS was implemented by the International Accounting Standards Committee. However, since 2001, it has been administered by the International Accounting Standards Board.

The International Accounting Standards includes the presentations of financial statements, accounting policies, changes in accounting statements and errors, events after the balance sheet date, construction contracts, income taxes, segment reporting, property plant and equipment, leases, revenue, employee benefits, inventories, accounting for government grants and disclosure for government assistance, and other relevant financial reports.

Last July 05, 2006, the People's Republic of Bangladesh adopted the "Presentation of Financial Statements" from the IAS and officially included it to the Bangladesh Accounting Standards. (BAS) On the same date, inventories were also adopted. From then on, Bangladesh started adopting more and more regulations from the IAS and officially included it on BAS. 

A country’s legal system may influence financial reporting disclosure. The common law country is typified by solutions to specific cases drawn from practice and may create an environment to increase disclosure to meet the increased demand of the stockholders.

Accounting practices in public sector commercial banks in Bangladesh are regulated by the Bangladesh (Nationalization) Order 1972, the Companies Act 1994, Securities Exchange Rule 1987 and other statutes such as the Bank Companies Act 1991, the Insurance Act 1938 and the Income Tax Act 1922.

The audit of corporate entities and the professional responsibilities and conduct of chartered accountants are governed by the Bangladesh Chartered Accountants Bye-laws 1973. The Companies Act 1994 does not require mandatory...