Most audit problems in Bangladesh start long before the auditor walks in. A lost Mushak invoice, a bank balance that does not match the books or a VAT return with the wrong sales figure can turn a short audit into weeks of stress.
But, to be honest, audit readiness is mostly a habit. A Bangladeshi company that keeps clean records all year gets a quick audit. A company that leaves everything to June gets delays, higher fees and sometimes a negative audit report.
This guide explains which records Bangladeshi law asks a company to keep, how long to keep them and a monthly routine to stay ready.
Audit readiness means a company's money records are complete, correct and easy to find. Every sale and expense is in the books. Every entry has a bill or Mushak invoice behind it. Every balance matches the bank and other proof.
The audit itself is done by an ICAB-registered chartered accountant. Audit readiness is the homework before that, so the auditor finishes faster.
Every company in Bangladesh must have its accounts audited each year. Section 210 of the Companies Act, 1994 says directors must appoint the first auditor within a month of forming the company. After that, shareholders appoint one at each annual general meeting (AGM).
Audited accounts go to several government offices. Section 73 of the Income Tax Act, 2023 requires every company to attach audited accounts to its tax return. Each set has an ICAB verification code, so NBR officers and banks can check it is real.
The VAT office wants the same accounts. Under Section 90A of the VAT and Supplementary Duty Act, 2012, every VAT-registered limited company must send its audited accounts to the VAT office within the first six months of the fiscal year.
The NBR can also check past years. Under Section 182 of the Income Tax Act, a tax return can be picked for a tax audit up to two years after the filing year.
Three Bangladeshi laws decide which records a company must keep. Each law looks at a different side of the business. One well-kept set of books can meet all three.
Section 181 of the Companies Act asks every company to keep books that show all money received and spent, all sales and purchases, and everything the company owns and owes. Factories and similar businesses must also track their production costs.
The books must give a true and fair picture of the business.
They also stay at the registered office. If directors move them elsewhere in Bangladesh, the company must tell the RJSC, the office that registers companies, within seven days.
Under Section 72 of the Income Tax Act, companies must prepare their accounts using the international accounting rules adopted in Bangladesh, known as IAS, IFRS and IFRS for SMEs. The Financial Reporting Council (FRC) sets and watches over these rules.
The Finance Act 2026 added a new Section 72A. It sets how long tax records must be kept. It also says records can be kept on paper, on a computer or both.
VAT records need attention every month, because the Mushak 9.1 VAT return is due within 15 days after each month ends. Section 107 of the VAT Act asks every VAT-registered business to keep:
From 1 July 2026, VAT records kept in NBR-approved accounting software are accepted as proof, as long as the data is stored on a secure server. ACE Advisory's monthly VAT return guideline explains the monthly filing in detail.
Each Bangladeshi law sets its own time limit. The safe rule is clear. A company should keep each record for the longest time that applies to it.
Law | Who it covers | How long to keep records |
Companies Act, 1994 (Section 181) | All companies | At least 12 years |
Income Tax Act, 2023 (Section 72A) | Companies | Same as the Companies Act, so 12 years |
Income Tax Act, 2023 (Section 72A) | Other taxpayers | 6 years |
VAT Act, 2012 (Section 107) | VAT-registered businesses | 5 years, or longer if a case is still open |
For most companies in Bangladesh, this means 12 years for books, bills and receipts. Records linked to an open NBR case or tax appeal should stay on file until the case is fully closed, even after the normal time limit.
Knowing the law is half the job. The other half is a regular routine that keeps the books clean all year. These nine steps work for Bangladeshi startups and large local companies alike.
Every company needs a chart of accounts. This is the list of headings, such as sales, rent and salaries, that every transaction goes under.
Separate headings for VAT, tax cut at source and loans from directors save hours of fixing at year end.
Most Bangladeshi companies follow a July to June income year. Sales and expenses should go into the books every day or every week, not in a June rush. Accounting software works better than spreadsheets, because it records who entered or changed each figure.
Every entry needs proof. A sale needs a Mushak 6.3 invoice. A purchase needs the supplier's Mushak 6.3, showing the names, addresses and VAT registration numbers of both buyer and seller. Without these details, the company cannot claim input VAT.
Papers should be filed in one fixed pattern, such as by month and voucher number. This way, anyone on the team can find any document in minutes.
This step is called reconciliation. Each month, the bank balance in the books should match the bank statement. The same goes for bKash, Nagad and other mobile banking accounts, plus petty cash. Any difference should be checked right away.
Customer and supplier balances need the same check at least every three months. Small gaps are easy to fix early. Left alone, they grow into big audit questions.
The NBR compares the audited accounts, the income tax return and the VAT returns. Different sales figures lead to questions. A monthly check of Mushak 9.1 returns, tax cut at source and challans against the books stops this problem early.
Payment method matters. Under Section 46 of the VAT Act, input VAT on a purchase above Tk 1 lakh is lost if the payment is not made through a bank or mobile banking. The claim must also be made within six tax periods.
A fixed asset register lists every major item the company owns, such as machines, vehicles and computers, with its cost and current value. Stock should be counted by hand at least once a year, ideally on 30 June.
Salary records should match the books too. This covers salary sheets, job contracts, tax cut from salaries and provident fund payments. Outsourced payroll and HR services make this easier for small teams in Bangladesh.
Small teams can set basic checks too.
The person who records a payment should not approve it. Large payments need written approval. Only trusted staff should be able to change entries, and a manager should review the accounts each month.
At year end, the accountant adds unbilled costs, spreads asset costs over their useful life and writes off customer bills that will never be paid. Draft accounts should be ready before the auditor arrives.
Audited accounts must be ready for the AGM and tax return. For a company whose year ends on 30 June, the return is due to the NBR by 15 March. ACE Advisory's list of yearly compliance deadlines in Bangladesh shows the key dates.
Records must survive for at least 12 years. Scanning paper bills and backing up computer files protects them from fire, flood and loss.
Since Section 72A now accepts digital records, a neat digital archive is legal and much easier to search.
In Bangladesh, auditors send a document request list before they start work. Many firms call it the PBC list, short for "prepared by client." It tells the company which papers to collect.
Most audit delays happen at this stage. Missing bank statements or unsigned board minutes can hold up the work for days. A company that has these papers ready on day one cuts the audit time sharply. The usual list covers:
Most of these papers come straight out of the monthly steps above. A company that reconciles its bank accounts, files Mushak invoices and records board decisions on time already has the bulk of this list ready.
The rest takes a few hours, not weeks. Keeping everything in one shared folder, sorted by month, turns the auditor's request into a quick handover.
Most audit delays in Bangladesh come from a handful of bad habits. Each one costs time, audit fees and sometimes extra tax. The law also takes poor records seriously.
Under the Companies Act, officers who fail to keep proper books face a fine of up to Tk 5,000, six months in jail or both. Under Section 267 of the Income Tax Act, the tax fine can reach 1.5 times the tax owed.
Cash payments without proper receipts top the list. Auditors cannot easily check them, and the NBR often refuses to accept them as business expenses.
Under the Income Tax Act, salaries and rent paid outside the bank are rejected as expenses. Paying by bank transfer, cheque or mobile banking leaves a clear trail for both the auditor and the tax office.
Many family-owned companies pay home bills from the business account. School fees, family shopping and personal travel end up in the company's books, mixed with real business costs.
Auditors then have to sort every line by hand. A separate business account, plus a written record of any money the owner takes out, keeps the two apart.
Bank and mobile banking accounts that are never matched with the books force auditors to test far more entries. Missing bank charges and double payments stay hidden until year end.
A monthly match takes an hour or two. Fixing the same gaps during the audit can take days and push up the audit fee.
The NBR compares sales in the Mushak 9.1 VAT returns with revenue in the audited accounts. A gap between the two catches the tax office's eye and can lead to a VAT audit.
A short monthly check stops this early. The sales register (Mushak 6.2), the VAT return and the ledger should all show the same sales figure for each month.
Money moving between the company, its directors and sister concerns is common in Bangladesh. Without a written agreement or board approval, auditors cannot tell a loan from a payment or a withdrawal.
Each loan needs a short agreement, a board minute and a clear entry in the books. These papers turn a long audit question into a quick tick.
Many young companies in Bangladesh fall behind while the owners focus on growth. The fix is to catch up before the next audit, not during it.
ACE Advisory's catch-up compliance service handles this clean-up, from updating the books to correcting past tax and VAT filings. For companies that prefer not to keep the books in-house, outsourced accounting in Bangladesh is often the easiest way to stay audit-ready all year.
Good financial records come down to a few good habits. Record every transaction on time. Keep a Mushak invoice or receipt for every entry. Match the books with the bank every month. Keep tax and VAT figures in line with the accounts.
Bangladeshi law backs these habits with clear rules. Companies must keep their books for at least 12 years, attach audited accounts to every tax return and send the same accounts to the VAT office.
None of these steps is hard on its own. The real challenge is doing them every month.
For help with bookkeeping, financial reports and audit preparation, ACE Advisory's accounting and reporting services support local businesses and foreign-owned companies across Bangladesh.
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