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History of Auditing Profession in Bangladesh

Report on
History of Auditing Profession in Bangladesh

Institute of Business Administration
Jahangirnagar University
Date – 07.07.2014

Table of contents
Page number
Executive summary
Audit in brief:
History of auditing profession in Bangladesh
Ending summary

Executive summary:
The development of auditing profession in an emerging economy Bangladesh is analyzed here. This report aims to discuss the historical background and evolution of auditing. It is found that auditing has evolved through a number of stages. In the mid 1800s to early 1900s, the audit practice was considered as traditional conformance role of auditing. However, for the past 30 years, the auditor has been playing an enhancing role. Today, auditors are expected not only to increase the believability of the financial statement, but also to provide value-added services. Nevertheless, following extensive reform in various countries as a result of the collapse of big corporations, it is expected that the role of auditors will converge. It is evident that the paradigm about auditing has shifted over the years and it is likely to continue shifting in the future. The first Companies Act in the then British India was enacted in 1850. The Companies Act of 1882 was passed where acts of auditing were imposed. It was not necessary for a company auditor in those times to be accountant himself. The Companies Act, 1913, was passed to be effective as from 1st April, 1914. No person could act as the Auditor of a public limited company unless he held an auditor’s certificate granted by Government. The Government framed Rules under Section 144, of the Companies Act, 1913, called “Auditors Certificate Rules’ 1932”to have control over the profession of accountancy. In 1952, the Registered Accountants formed a private body known as “Pakistan Institute of Accountants” with the objects of looking after their own interest and taking up with Ministry of Commerce, Government of Pakistan, matters affecting the accountancy profession. Through the war of liberation, the then East Pakistan emerged as an Independent country- Bangladesh on 16 December, 1971. Institute of Chartered Accountants of Bangladesh was formed according to Bangladesh Chartered Accountants Order 1973. The Cost and Industrial Accountant Act, 1966 was replaced and on November 8,1977 the President of Bangladesh enforced the ‘Cost and Management Accountants Ordinance 1977 in 1977 and Cost and Management Accountants Regulations 1980. The complicated evolution of auditing has been changing throughout the historical changes. Thus the practice of auditing have always had a dramatic shift of change to cope with the needs of everyday business environment. Auditing has been around since the beginning of human civilization, focusing mainly, at first, on finding fraud

Origin of the Report:
This report is a requirement for completing the course ‘auditing and taxation’. As we were assigned, I am submitting the report on History of Auditing Profession in Bangladesh. Problem and purpose:

This report seeks to analyze the historical background of auditing. It aims to analyze the development of auditing over the years, with particular reference to the nature and objectives of auditing, the responsibilities of auditors and the audit techniques used. The reason for such an analysis is to enable readers to gain an understanding of the audit development over the years. Scope:

This report is confined in analyzing the history of auditing in Bangladesh. There is hardly discussed anything except that. Methodology:
Almost all the data here is collected from secondary sources. This report is mainly built on the help of the text book and the hand notes given by our course instructor. Report preview:
The report is structured in a...
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