The President of the Dhaka Chamber of Commerce & Industry (DCCI) has said adherence to International Financial Reporting Standards would not only improve compliance, but also open up more opportunities for access to finance and investment, boost the country's global competitiveness and reduce the risks of financial misreporting.
“The SMEs are the lifeline of Bangladesh’s economy contributing over 25 percent to the GDP. The adoption of International Financial Reporting Standards (IFRS) for SMEs provides a structured framework that enhances financial transparency,” Taskeen said, while speaking at a focus group discussion on “Implementation of IFRS for SMEs” held at DCCI on Saturday.
He also said that IFRS will significantly impact tax revenue collection by improving compliance, minimizing tax evasion, and bringing more businesses into the tax net.
International Financial Reporting Standards are a set of accounting rules for the financial statements of public companies that are intended to make them consistent, transparent, and easily comparable around the world. The IFRS is issued by the International Accounting Standards Board.
Taskeen noted that limited financial capacity, shortage of skilled manpower, and the short-term cost of compliance creates barriers to adopting IFRS for SMEs.
The DCCI president, however, stressed the need for investment in training and regulatory alignment.
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Dr. Mohammad Abu Yusuf, acting chairman of the Financial Reporting Council, said that IFRS is very important for SMEs to comply with international standards, but its implementation is still challenging for our SMEs due to lack of knowledge, skilled workforce, easy procedures, and awareness.
He opined that there is no alternative to enhancing the capacity of SMEs to make them interested in implementing IFRS. SMEs need to be more focused on IFRS implementation to increase tax compliance, access to capital from the capital market, and signing international trade agreements.
Md. Amir Uddin, Executive Director of Bangladesh Bank, said that the implementation of IFRS should be focused on improving the image of local SME entrepreneurs in the global arena, but it is necessary to provide training to improve their skills.
Nawshad Mustafa, Director, of the SME & Special Programmes Department of Bangladesh Bank, said, “We have a lack of trained and skilled accounting professionals in the country especially for SMEs. To implement IFRS in a practical manner, an enabling environment is necessary for this.”
He also said that IFRS is implemented in 80 countries in the world at the moment and it is also required for Bangladeshi businesses to implement but that should be without affecting the business activities of the SME sector. He again stressed the importance of a friendly environment for its implementation.
DCCI Joint Convenor Md. Shafiqul Alam, FCA, businessmen, and SME entrepreneurs attended the event.