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DCCI calls for increasing threshold limit for Financial Reporting of SME industries under Financial Reporting Act

President of Dhaka Chamber of Commerce & Industry (DCCI) Shams Mahmud met Dr. Md. Hamid Ullah Bhuiyan, Chairman, Financial Reporting Council (FRC) Bangladesh at the latter's office on 20 October, 2020. Senior Vice President, DCCI, N K A Mobin, FCA, FCS was also present during that meeting.

During the discussions, DCCI President Shams Mahmud congratulated the newly appointed Chairman of FRC. He highlighted various activities of DCCI particularly in the area of SME sector. Chairman, Financial Reporting Council, Bangladesh Dr. Md. Hamid Ullah Bhuiyan also appreciated the role of DCCI in the economic development of Bangladesh.

As per Financial Reporting Act 2015, all entities with an annual sales or revenue of Taka 5 crore and fulfils any of two conditions of either having employment of 50 people or having total property value of Taka 3 crore or having a total liability of Taka 1 crore, will be treated as the Public Interest Entities (PIEs). As per this Act, Financial Reporting Council (FRC) will review and monitor the preparation, auditing and reporting of all Financial Statements of those PIEs. These threshold limits are too low or strict and will extremely be difficult to maintain by organizations, most of which will be SMEs, practically and financially. In general, the SMEs are with very low capital base, non-structured and non-technology oriented organizations. SMEs can not afford to maintain professional accounting personnel to prepare and maintain the financial reporting as per IFRS and IAS standards.

Shams Mahmud later requested the Chairman of FRC to increase these threshold limits to a greater extent so that the SMEs do not fall under non-compliance because of various compliance issues that are difficult to be maintained by the SMEs. Moreover, he sought all out cooperation from the FRC to facilitate the country’s SME sector to be more competitive in the world market.

Chairman, Financial Reporting Council, Bangladesh Dr. Md. Hamid Ullah Bhuiyan assured that he would look into the issues seriously and would try to accommodate the requests as much as possible.

Published on: 2020-10-21