Bangladesh Bank (BB) has issued fresh guidelines for the appointment of audit firms to verify export subsidy and cash assistance claims for the 2026-27 fiscal year. The aim is to strengthen transparency and oversight in the disbursement of export incentives.
Requirements for Audit Firm Appointments
According to a circular issued by the Foreign Exchange Policy Department-1, Authorized Dealer (AD) banks may appoint the same number of audit firms currently engaged in their statutory audits to verify export subsidy and cash assistance claims. However, such appointments will require a prior "No Objection" from the Foreign Exchange Policy Department-1 of Bangladesh Bank.
Objectives and Measures
The central bank said the measure is intended to ensure an efficient verification process for alternative cash assistance provided to export-oriented sectors in place of duty bonds and duty drawback facilities, while maintaining transparency and preventing conflicts of interest.
Additional Appointments
If an AD bank needs to appoint additional audit firms beyond those engaged for statutory audits, it must seek prior approval from the Foreign Exchange Policy Department-1. The application must include a justification for the additional appointments, the proposed firm's previous engagement and performance with the bank, the number of subsidy and cash assistance claims awaiting audit, and other relevant supporting information.
Complementary Regulations
Bangladesh Bank also clarified that the new instructions complement existing regulations. The provisions of FE Circular No. 10, issued on July 8, 2024, and FE Circular No. 20, issued on December 3, 2023, along with all other relevant directives on auditing export cash assistance claims, will remain in force.
Significance and Implications
These new guidelines are crucial for ensuring that export subsidies are disbursed efficiently and transparently. By requiring prior approval and detailed justifications for additional audit firm appointments, Bangladesh Bank aims to prevent conflicts of interest and maintain rigorous oversight. This move is expected to enhance the credibility of the export subsidy verification process and ultimately support the growth of export-oriented sectors in Bangladesh.
