Dhaka: The International Financial Reporting Standards (IFRS) are set to improve access to finance and investment for small and medium enterprises (SMEs), enhance global competitiveness, and reduce the risks associated with financial misreporting. Taskeen Ahmed, the president of the Dhaka Chamber of Commerce and Industry (DCCI), emphasized this point during a focus group discussion on “Implementation of IFRS for SMEs” held at the DCCI in the capital.
According to Bangladesh Sangbad Sangstha, Ahmed highlighted that SMEs are crucial to Bangladesh’s economy, contributing over 25 percent to the GDP. He noted that adopting IFRS for SMEs offers a structured framework that enhances financial transparency, which is essential for the growth and development of these enterprises. Ahmed further pointed out that implementing IFRS would significantly impact tax revenue collection by improving compliance, minimizing tax evasion, and bringing more businesses into the tax net.
However, Ahmed acknowledged the barriers SMEs face in adopting IFRS, such as limited financial capacity, shortages of skilled manpower, and compliance costs. He stressed the need for increased investment in training and regulatory alignments to overcome these challenges.
Dr. Mohammad Abu Yusuf, the acting chairman of the Financial Reporting Council, underscored the importance of IFRS compliance for SMEs to meet international standards. He acknowledged the challenges in implementation due to a lack of knowledge, skilled workforce, and awareness. Yusuf emphasized the need for enhancing the capacity of SMEs to encourage their interest in implementing IFRS, which would lead to increased tax compliance, better access to capital markets, and opportunities for signing international trade agreements.
Md. Amir Uddin, the executive director of Bangladesh Bank, said that implementing IFRS should focus on improving the global image of local SME entrepreneurs. He emphasized the necessity of providing training to improve skills and awareness of the benefits of IFRS implementation.
Nawshad Mustafa, director of SME and Special Programmes Department of Bangladesh Bank, highlighted the scarcity of trained and skilled accounting professionals in the country, particularly for SMEs. He stressed the need for an enabling environment to implement IFRS practically without affecting SME business activities.
Mohammad Jahangir Hossain, general manager of the SME Foundation, noted that accounting software provided by the SME Foundation was not widely implemented due to a lack of skills and interest. He proposed developing sector-based customized accounting software for easier implementation and emphasized the importance of facilitation and training.
Sk. Md. Tarikul Islam, FCA Partner of Hoda Vasi Chowdhury and Co. Chartered Accountants, presented a keynote paper addressing the challenges of IFRS implementation, including capacity building, training for accountants and auditors, and initial transition costs. He highlighted the benefits of IFRS for SMEs, such as simplified reporting, cost-effective compliance, and enhanced credibility, and urged for easy access to finance and tax incentives for SME startups.
DCCI Convener Lutful Hadee noted the presence of about 2,200 chartered accountants in the country, with around 600 in practice, and about 40,000 part-qualified accounting professionals in the market. DCCI’s Joint Convenor Md. Shafiqul Alam called for uniformity in the definition of SME across various policies and regulations of different institutions. DCCI’s Senior Vice-president Razeev H Chowdhury and Vice-president Md. Salem Sulaiman also attended the meeting.