Three forces reshaping risk
Risk in Bangladesh's consumer companies is being shaped by three forces at once: exposure to the currency and import costs that drive most product costs, the move of sales and collections onto digital channels, and closer attention from tax and regulatory authorities. Each adds pressure on controls that were designed for a slower, more manual business.
Tax risk deserves particular mention. VAT and supplementary duty are calculated across very large numbers of invoices, so a system or master data error repeats quickly. A single incorrect rate setting can create an exposure that grows with every sale until it is found, often by the tax authority first.
Commercial and financial exposures
Import-dependent manufacturers face exchange rate risk between order and settlement, as well as delays in opening letters of credit, which can disrupt production. Reliance on a small number of suppliers for key materials adds concentration risk. On the sales side, trade credit extended to distributors can build up quickly when growth targets are aggressive, and recoverability is often assessed too late.
Inventory carries its own risks in this sector. Food, beverages and personal care products have limited shelf lives, so slow-moving and near-expiry stock needs regular review and honest provisioning. Market returns and damaged goods should be tracked through to disposal.
Control gaps commonly found in the sector
Some weaknesses appear repeatedly across consumer businesses. They include manual price and discount overrides without second approval, customer and product master data that anyone can change, promotional schemes and free goods that are never reconciled against claims, distributor credit limits that are routinely exceeded, and stock counts that exclude third-party warehouses. Shared system log-ins and weak access reviews make these gaps harder to detect.
Fraud risk follows the same patterns. Collusion between sales staff and distributors, inflated or fictitious promotional claims, and procurement arrangements that favour particular suppliers are all recognised risks in the sector. They are rarely found by sample testing alone.
Where independent review helps
RRH's Risk Consulting team builds risk-based internal audit plans around these exposures and reports to the audit committee. Our Internal Control & Compliance Review work provides interim control health-checks, often using data analysis across complete transaction populations rather than small samples. When an allegation or unexplained loss arises, our Forensic Services team investigates, establishes the facts and advises on recovery and on control improvements to prevent a recurrence.
Findings are most useful when they are tracked to closure. We recommend that the audit committee receives a regular status report on agreed actions, with overdue items explained by the responsible manager.
Related RRH services: Risk Consulting, Internal Control & Compliance Review and Forensic Services.