As we have been talking about enhanced transparency and accountability recently, it's important to have forensic audits, including specialised examinations of financial records which can uncover fraud, corruption or mismanagement. Forensic Audits are different from standard audits because they provide actionable evidence suitable for legal proceedings. So, in a country where corruption undermines progress, these kinds of audits can play a vital role in fostering economic growth and public trust.

According to Transparency International's Corruption Perceptions Index (CPI) 2023, Bangladesh scored 24 out of 100, ranking 149th out of 180 countries, highlighting the urgency of strong anti-corruption measures. For example, the banking sector struggled with rising non-performing loans (NPLs), which reached Tk 211,000 crore by mid-2024, according to Bangladesh Bank, further necessitating forensic audits to trace misappropriated funds and fraudulent activities.

Sectors like banking, healthcare, and public procurement are heavily affected by corruption. Forensic audit can help stabilise the economy in banking, by uncovering fraudulent activities and ensuring accountability. In the arena of public procurement, forensic audit can be used to promote transparency and integrity in infrastructure and development projects. Additionally, monitoring the financial activities of NGOs and development funds will prevent the misuse of donor contributions and ensure that resources intended for development reach their beneficiaries. By addressing these key areas, Bangladesh can combat systemic corruption, strengthen transparency, and build a robust economic and policy framework.

Traditionally, Bangladesh relied on enquiry committees to investigate corruption. However, this has proven to have significant limitations since they lack specialised skills, are often subjected to political or institutional pressure, and mostly focus on surface-level issues. Therefore, reports from these committees often lack the rigour required for legal proceedings. The sensible alternative would be forensic auditors who are trained to detect fraud and financial forensics, operate independently and use advanced techniques like transaction tracing, digital forensics and more, while complying with international standards. This amounts to evidence that can withstand court scrutiny and public trust.

Other uses of the insights gained from forensic audits include guiding policy reforms, strengthening institutional accountability, and improving regulatory structures. Furthermore, public confidence in government institutions will be restored if citizens see genuine efforts to combat corruption. Therefore, forensic audits not only promise to contribute to financial recovery but also lay the foundation for sustainable governance and development.

Nevertheless, despite all the benefits, Bangladesh is facing major obstacles when implementing forensic audits. A significant challenge is resistance from powerful individuals and entities who wish to protect vested interests. Furthermore, conducting forensic audits is resource-intensive, requiring substantial financial investment and logistical support. Another bitter truth is the lack of trained forensic auditors in Bangladesh, which limits its ability to execute large-scale investigations. Overcoming these challenges calls for strategic planning, investment in capacity building, and potential international collaboration.

Therefore, a multifaceted approach is essential if we are to address these challenges effectively. Partnering with renowned global forensic firms can be an option. Simultaneously, building local capacity via robust training programmes to develop a skilled workforce capable of managing complex investigations could be another faucet. On top of that, strengthening our legal frameworks is crucial, including enacting laws that mandate forensic audits in high-risk sectors to ensure strict enforcement of audit recommendations. If Bangladesh can adopt these strategic measures, we can expect more transparency and overcome the existing barriers to forensic audits.

Forensic audits are indispensable for tackling corruption and financial misconduct in a country like Bangladesh, and the time to act is now.

The writer is the chairman of Financial Excellence Ltd.