This is to certify that the internship report on "Audit Procedures of a Chartered Accountant Firm-ACNABIN" was prepared as part of the completion of the BBA program of the Department of Business Administration, Sonargaon University (SU), conducted by Md Kabir. Hossain Arif, ID: BBA2002020006 under my supervision. The core purpose of the internship is to fulfill the requirement of the BBA program.
Introduction
Objectives of the study
Methodology of the study
Limitations of the study
Details of the firm
Organization profile
- History
- Training
- Membership
- Services
In May 1994, two of his partners actively participated in a workshop on the Supreme Audit Institution held in Singapore. In January 1997, the company also participated in a training workshop held in Bangkok on USAID rules and regulations.
2.5(A)Audit and assurance
2.5(B) Tax and legal advice
2.5(C)Consultancy
2.5(D)Advisory
- Area of expertise
- Framework of accounting and auditing
- International standards of Auditing (ISA)
- Audit Principles
- Types of Audit
Corporate financial reporting requirements in Bangladesh are set out in a number of laws, which include the Companies Act of 1994, the Finance Act of 2014, Bangladesh Securities and Exchange (BSEC) Rules of 1987, the Banking Act of 1991, the Insurance Act of 2010. , the Bangladesh Chartered Accountants Ordinance of 1973, and the Cost and Management Accountants Ordinance of 1977. The BSEC Rules of 1987 and the Insurance Development and Regulatory Authority respectively require listed companies and insurance companies to apply full Bangladesh Financial Reporting Standard (BFRS). , while the Central Bank of Bangladesh, under the authority of the Banking Act of 1991, requires banks and other financial institutions to apply specific BFRS. The Companies Act of 1994 stipulates mandatory financial statement audits for all companies and specifies that only Chartered Accountants (CAs), members of ICAB, are authorized to carry out audits.
The Institute has adopted the 2013 version of the International Standards on Auditing as the Bangladesh Standards on Auditing for use in the country with limited changes due to local laws. In addition to the audit of accounts, certain limited companies and state-owned enterprises are subject to mandatory cost audits under the Companies Act of 1994. Under the Financial Reporting Act of 2015, the Financial Reporting Council, once established, will be empowered to set auditing standards in Bangladesh.
Meanwhile, as of January 2017, the Institute of Chartered Accountants of Bangladesh (ICAB) remains the de facto standard setter under the Chartered Accountants of Bangladesh Ordinance 1973. ICAB's Technical and Research Committee has approved the 2013 version of the ISA as the Standards of Bangladesh on Audit for in-country application with limited modifications due to local laws.
3.4(a) Audit of Financial Statements
3.4(b) Compliance Audit
3.4(c) Government Audit
3.4(d) Internal audit
3.4(f) Operational audit
The International Federation of Accountants (IFAC)
The International Federation of Accountants (IFAC) serves the public interest by contributing to the development of strong and sustainable organisations, markets and economies. International Standards on Auditing (ISA) should be applied when auditing historical financial information. International Standards on Reviewing (ISRE) should be used when reviewing historical financial information.
International Standards on Assurance Engagements (ISAE) should be applied to assurance engagements, except for audits or reviews of historical financial information. The International Standards for Interconnected Services (ISRS) should apply to compilation engagements, engagements to implement agreed procedures for information and other engagements related to services, as specified by the IAASB. International Standards of Quality Control (ISQC) will apply to all services that are under IAASB engagement standards.
ISAs are written in the context of an audit of the financial statements1 by an independent auditor. They should be adapted as necessary in the circumstances when they apply to audits of other historical financial information.
Audit procedures of Bangladesh
Terms of Audits
3.7(a) Audit documentation
3.7(b) Audit evidence
3.7(c) Audit file
3.7(d) Audit firm
3.7(e) Audit opinion
Negative opinion - the financial statements do not fairly present the financial position, results of operations and changes in financial position, as per generally accepted accounting principles. Unqualified opinion - or clean opinion - financial statements present fairly, in all material respects, the financial position and results of the entity.
3.7(f) Audit risk
3.7(g) Audit Sampling
3.7(h) Audited financial statements (in the context of ISA 810 (Revised))
3.7(i) Auditor
3.7(j) Auditor association with financial information
3.7(k) Auditor’s expert
3.7(l) Auditor’s point estimate or auditor’s range
3.7(m) Base year
3.7(n) Business risk
3.7(o) Computer-assisted audit techniques
3.7(p) Date of report (in relation to quality control)
3.7(q) Date of approval of the financial statements
3.7(r) Date of the auditor’s report
3.7(s) Date of the financial statements
3.7(t) Date the financial statements are issued
3.7(u) Fraud
3.7(v) Fraud risk factors
The American Institute of Certified Public Accountants AICPA
Standards according to AICPA
3.9(a) Audit- Section 410 (Amended January 12,1988)
3.9(b) Committee on audit-Section 420 (Amended January 12,1988/revised may 15,20000)
- Audit procedures of ACNABIN
- Circular by Client: Clients invite firms for auditing through circular in national newspaper. If ACNABIN receives such proposal then review the proposal of clients
- Proposal Letter Sent to Client by ACNABIN: After reviewing the client proposal ACNABIN prepares that draft paper and mention the details how everything will be
- Confirmation Letter: a letter of confirmation is sent by ACNABIN to the management of the company after the firm has received the letter of contract
- Seven steps
- Responsibilities
Proposal letter sent to the client by ACNABIN: After reviewing the client's proposal ACNABIN prepares that concept document and mentions the details how everything will be ACNABIN prepares that concept document and mentions the details how everything will be carried out and also contains a technical and financial proposal that to the respective client. Also, the proposal states the company's eagerness to meet customer requirements, along with the estimated time and cost of providing the desired service. Acceptance of the proposal and contract letter: After the publication of the circular, the company receives draft proposals from the companies.
Confirmation letter: A confirmation letter is sent by ACNABIN to the management of the company after the firm receives the contract letter. If the contract between ACNABIN and the customer is in last year, three letters can be mutually exchanged. After being appointed by the client, the main purpose of ACNABIN is to provide opinions on whether the financial statements have been prepared and fairly presented in accordance with the International Accounting Standard (IAS) and Generally Accepted Accounting Principles (GAAP).
4.3(a) Client view
4.3(b) Efficiency
4.3(c) Errors
4.3(d) Irregularity
Template of Auditor’s Report of General Company in Bangladesh
This Audit Report Template for General Insurance Company in Bangladesh has been developed based on the requirements of ISA 700 (Revised) and examples of some Key Audit Matters (KAM) with an intention to share the idea in this regard. So, intended users can follow this template at their own risk, subject to any required changes.
Independent Auditor’s Report
Report on the Audit of the Financial Statements
Early application (where permitted) of a new accounting standard (eg a new International Financial Reporting Standard) that has a pervasive effect on the accounts prior to the effective date. A major disaster that has had or continues to have a significant effect on the company's financial position. Key audit matters are those matters which, in our professional judgment, were of greatest importance to our audit of the consolidated financial statements and the separate financial statements for the current period.
These matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon, and we do not express a separate opinion on these matters. Please refer to Appendix 1 for some examples of Key Audit Issues (CAIs) for illustrative purposes.
Please refer to Annexure 1 for some examples of Key Audit Matters (KAM) for illustrative purposes
Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS, the Companies Act 1994, the Insurance Act 2010, the Insurance Rules 1958, the Securities and Exchange Rules 1987 and other applicable laws and regulations and for such internal control. which management deems necessary to enable the preparation of annual accounts that are free from material misstatement, whether due to fraud or error. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures consistent with those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entity's ability to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other things, the scope and planned timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. From the issues communicated to those charged with governance, we determine those issues that were most important in the audit of the current period's financial statements and are therefore key audit issues.
Pursuant to section 63(2) of the Insurance Act 2010, to the best of our knowledge and according to the information and explanations given to us, all management expenses, wherever incurred and whether incurred directly or indirectly, in respect of the company's insurance business in Bangladesh during the financial year, the associated revenue accounts and the company's total income statement have been duly debited;. ISA 700 (revised) requires the name of the engagement partner to be included in the auditor's report on the financial statements of listed companies, unless such disclosure in rare cases could reasonably be expected to lead to a significant personal security threat.
Key Audit Matters
Premium Income
Audit guideline from ICAB
4.5(a) Assessment of risks
These BSAs are significantly more demanding than the previous standards in the depth of understanding of the client's systems and operations required, and also the extent of linking the actual work undertaken to the assessed risks.
4.5(b) Nature of risk
4.5(c) Audit Sampling
By basing the sample size on a combination of population monetary value, materiality, and risk, the auditor uses data determined during the audit planning phase in determining the audit sample size. The lower the materiality value and the lower the sampling risk the auditor is willing to accept (ie, the higher the risk factor), the larger the sample will be. Adherence to the APM sampling method therefore ensures that the work carried out responds to the level of assessed risk in the area concerned.
If a random selection is used, start with a random number that selects every nth item thereafter where n is equal to the remaining population value divided by the sample size. Again, ignore high value items and key items as they should have already been selected for testing. Regardless of the sampling base used, state the base and explain why it was chosen.
4.5(d) Projecting the value of errors
- Lack of co-operation of the client
- Rotation between audit engagement
- Lack of timing
- Lack of obtaining information in details
- Lack of proper supervision
- Lack of proper audit evidence
They just touch on the headlines and don't go deep into that document. Generally, the relevant audit manager ensures the better quality of the audit and he/she takes care of every single detail to the assigned team members. The tutor has just assigned the students and is not checking to see if they are going through any difficulties.
For that reason, sometimes the correct accuracy and consistency cannot be maintained and the work takes more time than expected, and also the top quality is difficult to maintain at that time. All the accounting standards such as Generally Accepted Auditing Standard (GAAS), International Accounting Standard (IAS), Bangladesh Auditing Standard (BSA), Comptroller and Auditor General (CAG) emphasize on proper audit evidence. But due to shortage of time it is quite impossible to get all the audit evidence at once.
Also, the client authority sometimes feels insecure and unwilling to provide all related audit documents regarding confidential facts. If the client fails to provide the necessary documents, it is quite difficult for the company to prepare a good and accurate audit report.
Conclusion
Sources of Information
