The relevant authorities have launched a sweeping investigation into allegations that dozens of companies, aided by licensed auditors, used fabricated audit reports to evade taxes between 2021 and 2024, potentially costing the state hundreds of crores of taka.
According to documents obtained by TIMES of Bangladesh from the National Board of Revenue (NBR), preliminary evidence suggests that at least 29 companies were involved in revenue evasion through fraudulent audit reports, with 29 auditors from various audit firms allegedly preparing false financial statements in exchange for financial benefits.
The initial findings were uncovered by a government intelligence agency, which subsequently informed Anti-Corruption Commission (ACC), NBR, and Financial Reporting Council (FRC). NBR and FRC have already begun proceedings against the auditors accused of wrongdoing. If the allegations are proven, the auditors could face cancellation of their professional licences, as well as up to five years’ imprisonment and financial penalties, according to the FRC.
Regulators move in as auditors deny sole responsibility
FRC Chairman Md Sazzad Hossain Bhuiyan confirmed to TIMES that formal investigations are underway. “We have received complaints against 29 auditors and their firms. Our investigation team is working on the matter. We expect to complete the probe by February,” he said. He added that action would be taken based on the severity of the offences, and that criminal cases could also be filed if necessary.
However, the president of Institute of Chartered Accountants of Bangladesh (ICAB), NKM Mobin, said his organisation had not officially received the complaints. “We have not received these allegations formally. But we have heard about them through various channels. If complaints are submitted following proper procedures, we will take action,” he said. He also argued that auditors alone should not bear full responsibility for such irregularities. “It is not possible for an auditor to verify 100% of documents. Auditors depend on documents provided by the company, and many companies present fake documents. Therefore, both parties must bear responsibility,” he added.
NBR seeks intelligence, warns of legal action
NBR has meanwhile instructed its commissionerates to provide any information or evidence related to allegations that auditors and audit firms illegally benefited from irregularities in audit processes to help financial institutions obtain unlawful advantages. The tax authority said any such information must be sent to the ACC headquarters. If any prior investigations had been conducted, relevant documents and evidence were to be submitted to the NBR by 23 December.
In cases where no action has yet been initiated, NBR has directed offices to take legal measures through its Intelligence and Investigation Cell (IIC), depending on the nature of the offence. Officials say fake audit reports have become a growing concern as they allow companies to conceal real income and reduce tax liabilities through manipulated financial data.
There is no official estimate of how much revenue the government loses each year due to fake audit reports. However, officials believe the amount could run into several hundred crore taka annually. A study by the Centre for Policy Dialogue (CPD) found that Bangladesh lost around Tk226,236 crore in tax revenue due to evasion in 2023 alone, with nearly half of that amount coming from corporate tax evasion.
According to NBR data, about 40,000 companies submitted tax returns in the last fiscal year, and audit reports are mandatory attachments. Officials say that many companies fail to provide accurate data, forcing auditors to rely on estimates. This practice creates opportunities for manipulation, allowing actual income to be concealed—often deliberately—leading to large-scale tax evasion.
A systemic risk beyond lost revenue
Experts warn that fraudulent auditing is not only a tax issue but also a serious threat to financial stability and investor confidence. Mohammad Salauddin Chowdhury, associate professor at Department of Finance at University of Dhaka, said fake audits do not just cause revenue losses but also create major risks for banks and investors. He stressed that effective and fair enforcement is essential to restoring confidence in the financial reporting system.
He added that responsibility does not lie with auditors alone, saying company management must be held equally accountable. If both parties are brought under the law, he said, discipline can be restored in financial reporting and investor trust can improve.
Among the companies under investigation are Delta Life Insurance, three entities of Givenchy Group, five from Envoy Group, Ha-Mim-Adnan Agro Complex, Ha-Mim Corporation, five entities of Edison Group, five from Thermax Group, and several other industrial and commercial firms.
The auditors named in the preliminary findings include Ashifur Rahman of Hussain Farhad & Co, Md Shamsul Karim Chowdhury of Huda Hossain & Co, Mustain Billah of Markh & Co, Arun Kumar Kund of Arun & Co, Md Shamsul Huda of Huda & Co, Mobin Sheikh of Akhtar Abbas Khan & Co, Matiur Rahman of MZ Islam & Co, Md Yasin of MM Yasin, Uttam Kumar Saha of Dewan Nazrul Islam & Co, Md Jabed Ali Mridha of Jabed Mridha & Co, Abul Kalam Azad of Azad Abul Kalam & Co, Hannan Mollah of A Hannan & Co, Hedayet Ullah of KM Hasan & Co, and Md Tanzilur Rahman of Khan Wahab Shafikur Rahman & Co.
Others named include Md Harun-or-Rashid and Abdul Momen Khan Lohari of Artisan, Md Shariful Islam of Saha Sajib Kumar & Co, Imrul Kayes of Imrul Kayes & Co, Mohammad Wahidur Rahman of SR Islam & Co, M Jaber Ali Musa of Ahmed Jaber & Co, Farhana Nasrin of Farhana Nasrin & Co, and AMM Ataul Karim of Mohammad Ataul Karim & Co.
