Every economic entity, whether small, medium, or large, contributes to the national economy through investments, capital flows, exports, imports, employment generation, taxation, and technology transfer.

Transparency, a cornerstone of accountability, is vital for the development and sustainability of economic entities. It ensures stakeholders, such as investors and regulators, have access to accurate data for informed decisions.

Transparency mechanisms deter corruption, prevent monopolistic behaviour, and promote innovation and equitable development.

Accounting, essential for transparency, provides stakeholders with relevant financial data to assess financial health and profitability.

While individuals maintain accounts for personal purposes, accounting is far more significant for entities performing commercial, business, financial, or fiduciary activities. Financial statements are not just collections of figures but a pictorial representation of an entity's operational position. Despite their importance, many entrepreneurs in Bangladesh undervalue accounting practices, often failing to invest in preparing International Financial Reporting Standards (IFRS)-compliant statements, which require professional accountants.

According to local laws and international best practices, financial statements of commercial entities must be audited by chartered accountants.

These audits aim to ensure that management-prepared financial statements are "true and fair" and free from material misstatements.

However, the efforts and time required to verify these statements and express audit opinions are often undervalued.

Furthermore, public participation in reviewing and commenting on published financial statements is limited. This lack of user feedback, crucial for improving quality, remains a significant challenge.

Previously, many entities were believed to prepare multiple sets of financial statements, and audit quality suffered due to a shortage of qualified auditors.

To address this, the Institute of Chartered Accountants of Bangladesh introduced digital numbering of audit reports through the Document Verification Code (DVC), eliminating the scope for multiple audited statements. Nearly 300 young, qualified, and enthusiastic chartered accountants have started practicing, sacrificing lucrative opportunities to enhance the profession's capacity.

Despite these efforts, progress remains slow due to the lack of parallel development among other stakeholders, such as business owners, users of financial statements, and regulators. Over the past few years, numerous audit reports with modified opinions have been issued, but their impact on users remains negligible.

In light of these challenges, some suggest exploring alternatives to traditional audits due to perceived capacity constraints. However, statutory audits are specialized tasks requiring qualified professionals with rigorous training and expertise.

In Bangladesh, the same auditing standards apply to entities of all sizes, though application may vary with the auditor's experience.

The core issue lies not in the availability of qualified auditors but in the lack of awareness about the importance of accounting, understanding financial statements, and interpreting audited opinions.

Ensuring transparency, accountability, and good governance across economic entities requires proper accounting and auditing. Raising awareness about the critical role of accounting among stakeholders is essential to achieve these goals.

The writer is a former president of the Institute of Chartered Accountants of Bangladesh (ICAB).