Cost audit being mandatory for state-owned companies

The government has taken steps to make cost audits mandatory for state-owned companies to enhance financial transparency and operational efficiency, citing long-standing inaction on cost audits has been a major reason for continued losses in many public enterprises.

According to the Ministry of Commerce, regular financial audits focus only on whether the accounts are accurate, without assessing the rationality of expenses or identifying inefficiencies. The introduction of cost audits will allow a detailed review of production and operational costs, uncover waste, and detect abnormal expenditures.

A recent inter-ministerial meeting, chaired by Commerce Secretary Mahbubur Rahman, discussed updating and revising the gazette for implementing cost audits in publicly listed state-owned companies. Although previous gazettes mandated these audits 16 to 24 years ago, they were never fully enforced. The government has stressed that auditing production and operational costs is essential to address structural weaknesses in these companies.

Under the revised gazette, cost audits will cover 52 companies in the energy and power sector, 34 in pharmaceuticals, 16 sugar mills, and 58 textile companies.

Representatives of the Institute of Cost and Management Accountants of Bangladesh (ICMAB) said that cost audits ensure transparency, accountability, operational efficiency, proper use of government subsidies, fair tariff determination, and cost analysis. They also help prevent waste, inefficiency, and corruption, while supporting profitable and sustainable management.

The Ministry of Commerce plans to finalise the gazette after consulting relevant departments, making uniform cost audit requirements applicable to all public limited companies.