The Financial Reporting Council (FRC), an independent government regulatory body, has brought more companies under its jurisdiction by defining Tk 5 crore revenue generating firms and companies having Tk 3 crore assets as public interest entities. The FRC issued a circular in this regard on March 11. With the circular, the FRC has extended the range of firms to be treated as public interest entities in addition to what was initially defined in the Financial Reporting Act 2015, said a senior FRC official. According to the circular, if a firm earns annual revenue of Tk 5 crore, it will be treated as a public interest entity. In addition to that, companies having assets of Tk 3 crore or more, or liabilities of Tk 1 crore apart from the shareholders’ equity, will also be a public interest entity. Prior to the circular, the Council did not have any revenue or asset criteria while defining any firm as a public interest entity. The Financial Reporting Act initially put financial service providing companies like banks, non-bank financial institutions, insurers, microcredit providers, alongside state-owned enterprises, and public limited companies under the radar of securities regulators. But, the act allowed the FRC to determine all other organisations as public interest entities from any industry based on their revenue, asset, liability or number of staff employed. FRC executive director Mohammad Mohiuddin Ahmed told New Age that public interest entities were subject to mandatory compliance with the Financial Reporting Act 2015 and regulations by the FRC as their financial matters involved public interest. After the circular, the FRC when requires can exercise its power on all firms that fall under the rules. Now it may inspect financial accounts of non-listed companies and the companies intend for going public, he said. The FRC was formed under the Financial Reporting Act-2015 to regulate accounting practices, to set standards for accountings and audits in Bangladesh, ensure compliance and to punish in cases of deviations.
