The adoption of International Financial Reporting Standards (IFRS) for small and medium enterprises (SMEs) provides a structured framework that enhances financial transparency, said Taskeen Ahmed, president of the Dhaka Chamber of Commerce and Industry (DCCI).
He also said that IFRS would strengthen access to finance and investment, boost global competitiveness, and reduce the risks of financial misreporting.
For all latest news, follow The Daily Star’s Google News channel. Ahmed made these comments at a discussion on “Implementation of IFRS for SMEs” held at the DCCI today.
He further said that IFRS would significantly impact tax collection by improving compliance, minimising tax evasion, and bringing more businesses under the tax net.
However, limited financial capacity, shortages of skilled manpower, and compliance costs are creating barriers to adopting IFRS for SMEs, he added.
Moreover, Ahmed stressed the need for investment in training and regulatory alignment.
Mohammad Abu Yusuf, acting chairman of the Financial Reporting Council, said IFRS is very important for SMEs to comply with international standards, but its implementation is still challenging for local SMEs due to a lack of knowledge, a skilled workforce, easy procedures, and awareness.
He opined that there is no alternative to enhancing the capacity of SMEs to make them interested in implementing IFRS.
Besides, SMEs need to focus more on IFRS implementation to increase tax compliance, access to funds from the capital market, and sign international trade agreements.
Amir Uddin, executive director of Bangladesh Bank, said the implementation of IFRS should focus on improving the image of local SME entrepreneurs in the global arena, but it is necessary to provide training to improve their skills.
They should also be well aware of the benefits of implementing IFRS, he added.
Mohammad Jahangir Hossain, general manager of the SME Foundation, said they provided accounting software to a few SME entrepreneurs, but it was not implemented in many cases due to a lack of skills and interest.
Against this backdrop, he proposed developing customised accounting software for the SME sector to facilitate adoption.
Also, Hossain emphasised the need for facilitation and training for further IFRS implementation.
Sk Md Tarikul Islam, a partner of Hoda Vasi Chowdhury and Co, said that capacity building, training for accountants and auditors, and initial transition costs are some of the challenges in implementing IFRS.
Regulatory bodies, professional organisations, and financial institutions can play a vital role in facilitating a smooth transition, he added.
Islam highlighted key benefits of IFRS for SMEs, such as simplified reporting, cost-effective compliance, enhanced credibility, and growth.
However, he urged easier access to finance, lower tax and VAT rates, reduced taxes for green businesses, tax incentives for SME startups, and a simplified tax payment process for SMEs.
