If you’ve ever run a company in Bangladesh, you’ve probably faced that yearly panic “Audit time again?”
Relax. Not every audit is out to make your life miserable. Some are mandatory, others are smart business moves, and a few can even save you serious money.
At Khan Akber & Co., we’ve helped hundreds of local and international companies in Bangladesh make sense of their audits — from statutory requirements to internal performance reviews.
What Is a Statutory Audit?
A statutory audit is the audit you must do. It’s required under the Companies Act 1994 (u/s 183), Income Tax Act 2023 (u/s 73) and regulated by the Institute of Chartered Accountants of Bangladesh (ICAB).
Every company registered with the RJSC must have its annual accounts audited by a Chartered Accountant who holds the CoP by the Institute of Chartered Accountants and enlisted by the Financial Reporting Council (FRC). The purpose is simple, verify that your balance sheet, income statement, and cash flow reflect reality.
If your business skips it, you’re violating company law. You’ll struggle with RJSC filing, annual tax return filings, bank compliance, or investor confidence. If you’re gearing up for your company’s annual audit, our Statutory Audit team
can guide you through every step, from preparing your accounts to filing with RJSC.
The Process in Bangladesh
- Appoint auditor — usually at your AGM.
- Prepare accounts — for the financial year ending June 30.
- Field audit — auditors review vouchers, ledgers, and bank records.
- Audit report — issued with an opinion (un-qualified, qualified, adverse, disclaimer of opinion).
- Submission — report filed with RJSC, tax authority and often shared with banks or shareholders.
This audit is about legal compliance and credibility. It’s your company’s official financial stamp of honesty.
Internal Audit: The Everyday Watchdog
While statutory audits please the regulators, internal audits keep management in check.
They’re not legally required (except in banking and insurance), but they’re invaluable for spotting weak systems, misuse of funds, or simple inefficiencies.
An internal audit looks at how your business actually operates. Are controls tight? Are departments wasting money? Is the ERP data reliable?
One garment exporter I worked with had rising sales but falling cash. An internal audit revealed 11% of raw materials were wasted due to poor inventory control. Fixing it saved around BDT 40 lakh in one year.
That’s the beauty of internal audits, they find leaks before they sink your ship.
Performance Audit: The Reality Mirror
A performance audit asks tougher questions: Are we effective? Are we getting results worth the cost?
These are common in public sector bodies, NGOs, and donor-funded projects. They assess efficiency, economy, and impact, not just financial accuracy.
For instance, if a city authority spends BDT 5 crore building community parks, a performance audit checks if people are actually using them and whether the costs were justified.
Private conglomerates are also catching on. One logistics-heavy group in Dhaka found through a performance audit that they had overlapping transport routes across three departments. A reorganization cut annual fuel costs by 18%.
It’s the kind of audit that forces you to face uncomfortable truths, but that’s how growth happens.
Cost Audit: The Manufacturer’s Secret Weapon
If you’re in manufacturing, a cost audit might already be on your to-do list.
It’s mandatory for industries like cement, sugar, fertilizer, pharmaceuticals, and textiles under the Companies (Amendment) Act 2020 and Cost Accounting Rules.
Here, the goal is to ensure production costs are properly recorded, transparent, and fair. The audit is carried out by a Cost and Management Accountant (CMA), members of the ICMAB.
Think of it as an X-ray of your production costs. It tells you exactly where you’re spending more than you should. Many businesses discover hidden profit gaps through this audit like an unnoticed 2% overuse of materials or inflated overhead allocations.
Quick Comparison
| Audit Type | Purpose | Mandatory | Done By | Main Focus |
|---|---|---|---|---|
| Statutory Audit | Compliance & accuracy | Yes | Chartered Accountant | Financial statements |
| Internal Audit | Control & efficiency | No | Internal or external auditor | Systems & processes |
| Performance Audit | Effectiveness & results | Mostly public sector | Independent auditor or consultant | Value for money |
| Cost Audit | Cost verification | For selected industries | Cost & Management Accountant | Cost records & pricing |
Why Businesses Confuse Them
Many think one audit covers everything. It doesn’t.
A statutory audit might say your accounts are accurate. It won’t tell you if your warehouse is wasting electricity or your HR team is overpaying overtime.
Internal audits catch that. Performance audits show if your strategy works. Cost audits keep your pricing fair.
Together, they form your business’s immune system, one keeps you compliant, another keeps you healthy.
The Audit Scene in Bangladesh
Bangladesh now has about 1,700 active Chartered Accountants among them about 620 practicing Chartered Accountants and a growing base of Cost & Management Accountants. The audit profession has become far more sophisticated in recent years.
Foreign investors, banks, and donors demand cleaner reporting. The ICAB and ICMAB are tightening quality controls, and digital accounting tools are improving transparency.
Even mid-sized companies now prefer proactive internal audits instead of last-minute statutory panic. The smarter businesses see audits as strategy tools, not as box-ticking obligations.
Choosing the Right Auditor
A good auditor isn’t the cheapest one. It’s the one who understands your industry and tells you uncomfortable truths with solutions attached.
If you’re in garments, pick someone familiar with export documentation and bonded warehouse issues. If you’re in tech, find someone who gets SaaS revenue recognition.
Audit relationships should feel like mentorship, sometimes stern, but always in your best interest.
Final Thoughts
So, the next time someone from finance says, “We have another audit coming up,” don’t groan. Ask which one.
If it’s statutory, it’s about law.
If it’s internal, it’s about control.
If it’s performance, it’s about results.
If it’s cost, it’s about precision.
Each type uncovers a different truth about your business. Together, they protect your reputation, improve decision-making, and help your company grow, not just legally, but intelligently.
Audits aren’t paperwork. They’re proof that your business is real, responsible, and ready to go global.
