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Transcript of Internship Nahin's Report
Rahman Rahman Huq Chartered Accountants
Synopsis
The Institute of Chartered Accountants of Bangladesh (ICAB) is the National Professional Accounting Body of Bangladesh established under the Bangladesh Chartered Accountants Order 1973 (Presidential Order No. 2 of 1973). The Council of ICAB is the Supreme Authority responsible for the administration and management of the Institute. The Council is composed of 20 (twenty) members elected by the members of the Institute from its two regional constituencies in Bangladesh every three years. The Council is headed by an elected President who is the Chief Executive of the Institute. The President and the Vice-Presidents of the Institute are elected by the Council every year to manage the affairs of the Institute. The Council is assisted by various Standing and Other (non-standing) Committees. For the purpose of assisting the Council in matters concerning its functions, the Council is empowered to constitute Regional Committees. At the moment there are two Regional Committees in Dhaka and Chittagong and two Chapters - UK Chapter and North American Chapter.
As on 01 July 2009, the Institute had 969 members (including 26 females) of whom 824 were resident in Bangladesh and 145 were resident abroad. Associate and Fellow memberships are offered by the Institute. Persons passing the qualifying Final Examination of the Institute are offered Associateship (ACA) while fellowship (FCA) is offered to members having at least five years post-associateship experience and fulfilling relevant other requirements. Out of 969 members, 305 are practicing as public accountants and the rest 664 are serving in various key positions in public and private organizations-both at home and abroad. As on the same date, there were 2719 articled students (including 115 females).
RRH is one of the most prominent firms in this sector. RRH, besides establishing an extensive accounting, auditing and tax practice, has extensive experience in multidisciplinary consulting assignments carried out solely, or in a consortium with international firms like KPMG, Arthur D. Little, Price Waterhouse, Deloittes etc. many of which were in the areas of banking, chemicals, food and agriculture, hydrocarbon, transportation and communication. A distinguishing feature of RRH has been its catalytic role in bringing under one umbrella the qualifications and experiences of top grade professionals available in the country.
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Table of content
SI. No. Topic Page No.
Chapter-One: Introduction 06
1 1.1 Origin of the Report 07
2 Scope of the report 07
4 1.4 Limitations 08
5 1.5 Definition 09
Chapter Two: Overview of Rahman Rahman Huq KPMG
6 2.1 Introduction about RRH KPMG 10
7 2.2 Recent information 11
8 2.3 Corporate Profile of the firm 11
9 2.4. Corporate Vision & Mission: 12
10 2.5 Objective 12
11 2.6 Organization structure: 13
12 2.7 Core value of the organization 14
13 2.8 Clients of the RRH KPMG 15
14 2.8.1 Manufacturing Company 15
15 2.8.2 Bank and Financial institution 17
16 2.8.3 Energy and Power 18
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17 2.9 Service provided to their clients 19
18 2.9.1 Audit 19
19 2.9.2 Tax and Advisory 19
20 2.9.3 Financial Advisory 19
21 2.9.4 Risk and advisory Service 19
Chapter 3 auditing of cash incentive
22 3.1 Introduction 20
23 3.2 Sectors of Auditing of Cash Incentives 20
24 3.3 Clients of RRH for cash incentives 20
25 3.4 Procedure of auditing of cash incentive (viyellatex ltd) 21
26 3.4.1 Collection of application 21
27 3.4.2 Collection of PRC 22
28 3.4.3 Checking application with the source documents. 23
29 3.4.4 Calculating the total claim amount 24
30 3.4.5 Preparation of Certificates 26
31 3.4.6 Preparation of Detail of Audit Case 27
Chapter 4 Conclusion and Reference
34Conclusion
28
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Introduction
Rahman Rahman Huq, with six active partners, is one of the leading accounting firms in
Bangladesh and the only such firm in the country where all partners are members of The
Institute of Chartered Accountants in England and Wales. The partners are supported by nearly
200 trained and experienced professionals including chartered accountants, MBAs, economists
and MIS specialists, including software engineers. The firm operates from two offices in
Bangladesh: Dhaka and Chittagong.
RRH has a large number of clients. It has served a large number of local and multinational
clients in Bangladesh. Beside this it has also full fill foreign assignment in different countries
throughout the world considering kpmg permission
its main objective is to Uphold professional integrity and honesty of its members Advise
government on taxation, business law and related matters ,Maintain superiority in respect of
professional competence, Meet the growing demand for qualified Chartered Accountants in
Bangladesh, Create the environment of mutual cooperation ,Carry out continuous research and
make in-depth study of related subjects and apply ,findings of research and study in the fields
of accountancy profession.
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Chapter l 1 l
Rahman Rahman Huq Chartered Accountants
Origin of the Report
University of Dhaka is the most popular and well known university in Bangladesh. It acquires
and holds the first position of the university brand in Bangladesh according to brand zeal
consultancy firm. It provides many courses both in graduate and post graduate program.
Bachelor of Business Administration (BBA) is one of them. In the BBA program internship
activities is compulsory for the students of Faculty of Business Administration. This internship
program for BBA student is for 45 official days. However I was assigned at HSBC cash incentive
audit segment. During this period I worked at HSBC head office (Anchor Tower), Pantho Path,
Dhaka to complete the program. After completing the practical work I prepare the report.
Rahman Rahman Huq is one of the leading auditing firms in Bangladesh which is also the
member firm of KPMG, recruits me and assigned to the cash incentive sector. Under the
supervision of two senior audit supervisor the report is made. The cash incentive sector is the
most crucial audit engagement of RRH, because on behalf of Bangladesh Bank RRH is auditing
total acquired by the bank as well as exporting organization(here Viyellatex in RMG sector and
Pran foods ltd in food and agro sector). I have prepared this report on this topic by counseling
with my honorable course supervisor and the staff of the RRH.
Scope of the Report:
This report covers the details of cash incentive audit workflows in multinational bank. This
report consists of my observations and on the job experiences during the internship period in
the cash incentive section of the HSBC bank operated by the RRH. This report emphasizes on
the sequential activities involved and used by RRH for auditing of cash incentive.
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Limitation of the Study:
All the audit activities are not observed.
All the concerned personnel of the firm are not been communicate.
The report covers the audit activities of HSBC bank (head office) Dhaka only.
The report covers only the cash incentive audit of the bank, not the group audit, interim
audit.
The duration of the internee at the audit firm was in dull season.
Some information was withheld to retain the confidentiality of the bank as well as RRH.
PRC, Application, Bangladesh Bank circulars, file of Viyellatex and Pran foods ltd- these
documents are failed to enclose with this report due to the terms and condition of the
RRH.
Duration of internship program
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I have been employed as a junior auditor in Rahman Rahman Huq CA firm in order to complete
my internship program held by “University of Dhaka” (BBA, Management Studies) from
29.09.2010 to 07.11.2010.
Definitions
PRC : Proceed Realization Certificate.
BB : Bangladesh Bank.
BBC : Back to Back L/C.
L/C : Letter of Credit.
BTMA : Bangladesh Textile Mills Association
BGMEA : Bangladesh Garments Manufacturing and Exporters Association
NOC : No Objection Certificate.
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Rahman Rahman Huq Chartered Accountants
2.1. Introduction
In 1962, when Price Waterhouse Peat & Co. left Pakistan, one of its former partners joined
forces with two other chartered accountants to form Rahman Rahman Huq. Over the years, this
firm has built a formidable reputation for providing audit, tax, advisory, and other business
solutions to national and multinational businesses, public sector corporations and development
organizations in Bangladesh (and both wings of Pakistan until the emergence of Bangladesh in
1971).
Rahman Rahman Huq, with six active partners, is one of the leading accounting firms in
Bangladesh and the only such firm in the country where all partners are members of The
Institute of Chartered Accountants in England and Wales. The partners are supported by nearly
200 trained and experienced professionals including chartered accountants, MBAs, economists
and MIS specialists, including software engineers. The firm operates from two offices in
Bangladesh: Dhaka and Chittagong.
RRH, besides establishing an extensive accounting, auditing and tax practice, has extensive
experience in multidisciplinary consulting assignments carried out solely, or in a consortium
with international firms like KPMG, Arthur D. Little, Price Waterhouse, Deloittes etc. many of
which were in the areas of banking, chemicals, food and agriculture, hydrocarbon,
transportation and communication. A distinguishing feature of RRH has been its catalytic role in
bringing under one umbrella the qualifications and experiences of top grade professionals
available in the country.
2.2. Recent Information:
At present RRH is the member firm in Bangladesh of KPMG International Cooperative, one of
the four largest international accounting firms in the world. They are the only member firm in
Bangladesh of any of the four major global audit firms.
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2.3. Corporate profile of RRH:
Partners 1. Sheikh Abdul Hafiz FCA. (England & Wales, ICAB )
2. A.N. Altaf H. Siddiqui. (England & Wales, ICAB )3. M. Mosleh Uddin. (England & Wales, ICAB )4. Adeeb H. Khan. (England & Wales, ICAB )5. Ali Ashfaq. (England & Wales , ICAA, ICAB)6. Muhammad Mehedi Hasan. (England & Wales,
ICAB).
Senior Manager 1. Keshab Gupta FCA (ICAB).2. Utpal Datta FCA (ICAI).3. Mohammed Saif Uddin ACA (ICAB).4. Snehasish Barua ACA (ICAB).5. Abu H.M. Kibria ACCA (Uk).
Post 9 Mohakhali C/A (11th floor). Dhaka – 1212. Bangladesh.
Fax +880-2-9886449.
Telephone +880-2-9886450-2.
Website www.Rahman-rahman-huq.com
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2.4. Corporate mission and vision of RRH:
The vision:
- Uphold professional integrity and honesty of its members
- Advise government on taxation, business law and related matters
- Maintain superiority in respect of professional competence
- Meet the growing demand for qualified Chartered Accountants in Bangladesh
- Create the environment of mutual cooperation
- Carry out continuous research and make in-depth study of related subjects and apply
findings of research and study in the fields of accountancy profession
The mission:
The mission of is to provide leadership in the development, enhancement and coordination
of the Accountancy Profession in Bangladesh in order to enable the profession to provide
services of consistently high quality in the public interest.
2.5. Objective of the RRH:
Ensure sound professional ethics and code of conduct by its members
Provide specialized training and professional expertise in Accounting, Auditing, Taxation,
Corporate Laws, Management Consultancy, Information Technology and related
subjects
Foster acceptance and observance of International Accounting Standards (IAS) and
International Standards on Auditing (ISA) and adopt the same as Bangladesh Accounting
Standards (BAS) and Bangladesh Standards on Auditing (BSA) respectively.
Keep abreast of latest developments in Accounting techniques, Audit methodology,
Information technology, Management consultancy and related fields
2.6. Organizational Structure of the RRH kpmg :
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Audit firm generally follows the line organization system. RRH kpmg is one of them and it
strictly follows the straight line system. At the top most partners hold the ultimate powers. As it
is the partnership organization, important and crucial decisions are held with the consent of all
partners. But senior partner has the power to influence in the decision making process. Senior
manager hold the second position followed by manager, assistant manager, Qualified (serving
article), Tax specialist, IRM (Information & risk management) specialist, Senior Auditor, Semi
Senior Auditor, junior auditor.
2.7. Core values of the RRH kpmg Bangladesh:
Our values create a sense of shared identity within the KPMG organization, which is a network
of member firms in 148 countries. They define what we stand for and how we do things. They
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Partner
Senior Manager
Manager
Assistant Manager
Qualified (Serving Article)Tax Specialist
IRM specialist
Senior auditor
Junior auditor
Rahman Rahman Huq Chartered Accountants
help us to work together in the most effective and fulfilling way. And they bring us closer as a
global organization.
We lead by example—at all levels acting in a way that exemplifies what we expect of each
other and our member firms’ clients.
We work together—bringing out the best in each other and creating strong and successful
working relationships.
We respect the individual—respecting people for who they are and for their knowledge, skills,
and experience as individuals and team members.
We seek the facts and provide insight—challenging assumptions, pursuing facts, and
strengthening our reputation as trusted and objective business advisers.
We are open and honest in our communication—sharing information, insight, and advice
frequently and constructively and managing tough situations with courage and candor.
We are committed to our communities—acting as responsible corporate citizens and
broadening our skills, experience, and perspectives through work in our communities.
Above all, we act with integrity—constantly striving to uphold the highest professional
standards, provide sound advice, and rigorously maintain our independence.
2.8. Clients of the RRH kpmg Bangladesh:
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RRH has a large number of clients. It has served a large number of local and multinational
clients in Bangladesh. Beside this it has also full fill foreign assignment in different countries
throughout the world considering kpmg permission. List of Clients of the RRH are given below:
2.8.1. Manufacturing company;
Advanced Chemical Industries Ltd.
Amo Tea Co. Ltd.
The Allynugger Tea Co. Ltd.
The Chandpore Tea Co. Ltd.
Bayer CropScience Bangladesh Ltd. (formerly Aventis CropScience Bangladesh Ltd.)
Aventis Ltd. (formerly Rhône Poulenc Rorer Bangladesh Ltd.)
TATA (A Member of TATA Group of India)
Bangladesh Edible Oil Ltd.(Subsidiary of Leverian Holdings of Singapore, manufacturers
and markets edible oil.)
Bangladesh Lamps Ltd.(Maker of Philips bulbs.)
BASF Bangladesh Ltd.
Bata Shoe Co. (Bangladesh) Ltd.
BOC Bangladesh Ltd. (A member company of British Oxygen Group of U.K.)
British American Tobacco Bangladesh Company Ltd.
Cemex Cement Bangladesh Ltd.
Coats Bangladesh Ltd.
Dhaka Match Industries Co. Ltd. (A subsidiary company of Swedish Match AB, Sweden.)
Holcim Bangladesh Ltd.
Integrated Beverage Services Bangladesh Ltd. (Member of Pepsico group of USA.)
Karnavphuli Fertilizer Company Ltd.
Lenny Fashions Ltd. (Part of a major Hong Kong based garments producer.)
Nestle Bangladesh Ltd. (Manufacturing and import of food and allied products.
Subsidiary of Nestle SA of Switzerland. Group auditors: KPMG.)
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New Zealand Milk Products Bangladesh Ltd. (Multinational Company engaged in retail
marketing of milk producer and allied products.)
Organon (Bangladesh) Ltd. (Part of Akzo-Noble group)
Premier LP Gas Ltd. (Subsidiary of Total Fina)
Proctor & Gamble Bangladesh Ltd.
Renata Ltd. (A listed public limited company engaged in manufacturing and marketing
pharmaceutical products.)
Roche Bangladesh Ltd. (Subsidiary of Hoffmann La Roche of Switzerland manufacturing
medicine.)
Saiham Cement Ltd.
Saudi Bangla Fish Feed Ltd. (A company owned by SABINCO producing poultry and fish
feed.)
Scancem Bangladesh Ltd.
Scancement International Ltd. (Member of the Norwegian cement group, this is a
producer of high quality cement)
Teesta High Fashion Ltd. (Member of Kukdong Group of Companies of South Korea
engaged in production of garments for export.)
The Baraoora Sylhet Tea Co. Ltd.
The Consolidate Tea & Lands (Bangladesh) Ltd.
The Deundi Tea Co. Ltd.
The New Sylhet Tea Co. Ltd.
The Noyapara Tea Co. Ltd.
The Surma Vally Tea Co. Ltd.(These are Sterling Tea Companies, producing and selling
tea in Bangladesh being fully owned subsidiaries of UK companies.)
Triumph International Bangladesh Ltd. (Garment manufacturing company based in
Germany.)
Transcom Beverage Bangladesh Ltd. (Bottler of Pepsi products in Bangladesh)
2.8.2 Bank and financial institution
Arab Bangladesh Bank Ltd.
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Bangladesh Shilpa Bank (industrial bank).
Bangladesh Shilpa Rin Sangstha (industrial credit finance institution).
Citibank NA.
Delta Brac Housing Finance Corporation Ltd.
Dutch Bangla Bank Ltd.
Federal Insurance Co. Ltd.
United Insurance Co. Ltd.
First Security Bank Ltd.
Industrial Development Leasing Company of Bangladesh Ltd.
Industrial Promotion and Development Company of Bangladesh Ltd.
International Leasing and Financial Services Ltd.
United Leasing Company Ltd.
Agrani Bank, Janata Bank, Sonali Bank.
Prime Finance Ltd.
Saudi Bangladesh Industrial and Agricultural Investment Co. Ltd.
Southeast Bank Ltd.
Standard Chartered Bank
The Hongkong and Shanghai Banking Corporation Ltd.(HSBC)
2.8.3. Energy and power:
ABB SAE SADELMI SpA (Branch operation, engaged in Civil Engineering connected with Karnafuli Hydro Power Plant Rehabilitation Project.)
AES Haripur Private Ltd.
AES Meghnaghat Ltd.(Bangladesh’s largest private sector land based power producers.)
BP Middle East Ltd. (Liaison office of BP of UK, involved in marketing of petroleum products.)
BJ Services Company Middle East Ltd. (Branch operation of BJ Services of UK. Engaged as sub-contractor to oil companies.)
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Brown and Root Bangladesh Ltd. (Subcontractor for exploration and development of oil and natural gas.)
Cairn Energy PLC (Contractor for exploration and development of natural gas in joint venture with Shell group of companies.)
Meghna Energy Ltd. (Subsidiary of Heidelberg group of Germany. Private sector captive power producer in Bangladesh.)
Khulna Power Company Ltd. (First private sector barge mounted power plant in Bangladesh. Subsidiary of El Paso Power of USA.)
Unocal Bangladesh Ltd. (Gas exploration and development in Bangladesh.)
Wartsila Bangladesh Ltd. (Subsidiary of the Wartsila group of Finland, this company markets power generating units in Bangladesh.)
RRH has full fill all kinds of auditing, advising, consulting type of activities for all of its clients.
Most of the clients are multinational organizations. It is because all multinationals need to
conduct their global audit report, so that in Bangladesh RRH is the only member firm of KPMG
international global audit firm. For this reason most of the multinationals prepare their audit
activities and report with the help of RRH.
2.9. Service provided to the clients:
2.9.1. Audit
Audit/attestation , Reviews and compilation of financial statements, Regulatory compliance
attestation, Interim reports, Special reports/agreed-upon, procedures stock exchange offerings
–attestation services ,Review and reporting on internal control
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Information risk management, Computer security reviews ,Internal audit outsourcing,
Accounting services ,Forensic and investigative accounting/litigation support ,Due diligence
reviews, Valuations, Corporate governance.
2.9.2. Tax, legal and advisory services
Corporate taxation, Mergers and acquisition, Payroll management, VAT, Taxation of individuals,
International taxation, International contract structuring, Expatriate tax services, complete tax
compliance review, company law.
2.9.3. Financial Advisory Service
Country Specific Statutory Reporting, IAS Attest Reporting, US GAAP Reporting, Prospective
Reporting, Other Forms of Attestation Reporting, Alliances and Joint Ventures, valuation.
2.9.4. Risk advisory service
Internal Audit Co/Outsourcing, IT Audit Co/Outsourcing, Regulatory Assistance Services (incl.S-
O)New Business / New Products, Capital Adequacy & Regulatory Reporting, Corporate
Regulatory Compliance, Accounting Support, Process Improvement Service.
3.1. Introduction:
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Chapter l 3 l Auditing of cash incentive at HSBC bank
Rahman Rahman Huq Chartered Accountants
Auditing of cash incentives involved the activities of checking relevant documents and
calculating the amount whether it is satisfying the circulated amount of Central Bank
(Bangladesh Bank) or not. If the documents are relevant and the amount are fulfilling the
central banks circulated markup then the audit firm will provide the certificate to their clients
(relevant financial, non financial, export oriented organization). At that time, only, Bangladesh
bank will provide the cash incentive facilities.
On behalf of Bangladesh bank, Rahman Rahman Huq recently audited the cash incentives
activities of HSBC (bd) bank.
3.2. Sectors of auditing of cash incentives:
According to Bangladesh banks circular cash incentives is provided in to two sectors for export
oriented activities. They are:
In Agriculture and food sector: 14 percent cash incentives will provide.
In Ready Made garments (RMG) sector: in RMG sector 5 percent cash incentives will provide
on exported amount but considering that 20 percent domestic value addition is compulsory in
preparing goods.
3.3. Clients of RRH for cash incentive:
Rahman Rahman Huq generally audited cash incentive activates of HSBC bank. Right now HSBC
is dealing with Viyellatex limited and Pran foods ltd for their exporting activities. So it becomes
the major responsibility of the RRH to audit all the exporting documents of both the viyellatex
ltd and Pran foods ltd at the head office of HSBC bank.
3.4. Procedure of auditing of cash incentives: Viyellatex ltd
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During the period of internship I have involved only in the sector of RMG sector for cash
incentive activities. So here the overall audit program of the cash incentive of the RMG sector is
highlighted. In this procedure two kinds of documents is essential, one is base documents and
other is source documents.
Base documents: Base documents are the Application and Proceed Realization
Certificates (PRC). Here the application format will provided by the audit firm (RRH)
according to the guide line of Bangladesh bank to the exported organization.
Source documents: Source documents are the Master L/C (letter of credit), local back to
back L/C, BTMA (Bangladesh Textile Mills Association) certificates of yarn, foreign back
to back L/C, invoice, bill of leading, Export number/claim no. the PRC will prepared and
provided by the inclined bank (HSBC) and it is also the source document. All of these
source documents are compiled in one master file.
So using these documents cash incentive activities will be started. Procedures are given below:
3.4.1. Step-1 Collection of application:
Application is the base documents with which the procedure will start. The application will
contain the information of:
a) In table 1: The following information will be provided.
Master L/C no.
Master L/C date.
Master L/C value.
b) In table 2(column2): local back to back L/C of yarns’ following information will be given
below;
Weight.
Date.
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Value.
c) In table 2(column 3): Foreign back to back L/C
L/C number
Date
Value
d) In table 3 (column 2): Total quantity exported.
(Column 3): Total invoice value.
(Column 4): Bill of lading date.
(Column 5): Export number.
(Column 6): Repatriated value.
(Column 7): Repatriated date.
e) In table 4: The claim amount of the exported organization will appear.
3.4.2. Step-2 Collection of Proceed Realization Certificate (PRC):
Proceed realization certificate is the document provided by the bank. In PRC all important
documents information will be gathered systematically. PRC generally contains the total
information about the master L/C , foreign back to back L/C , local back to back L/C. it contain
the information about total exported value and total repatriated amount of the exported
goods. It is also known as bank certificate, because bank provides a certificate with the PRC.
3.4.3. Step-3 checking application with the source documents:
At first compare the Master L/C number, date and value which is given in the
application, with the Master files’ documents where main copy of master L/C is stored.
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After that, compare the Master L/C number, date and value with the PRC document
prepared by the inclined bank (HSBC).
Then the local Back to Back L/C of the yarns’ weight, date, and value will be compare
with the BTMA certificate. In this certificate total weight, date and value will be properly
appearing.
Foreign Back to Back L/C includes L/C number, date, value and it will be compare with
the PRC – bank certificate. Then again compare it with the master files documents –
foreign Back to Back L/C document (which is in draft form).
The export number given in the application will be compare with the PRC documents
where the bank will provide an unique number of the export.
Again compare the repatriated value, repatriated date from the PRC documents.
Then compare the information of piece/quantity exported and invoice value from the
Master files’ invoice documents.
Date of the bill of lading which is given in the application will compare with the Master
files’ draft copy of the bill of lading.
At last compare the fabric value which is given in the application with the documents of
cost statement. This cost statement will be prepared by the exporting organization and
will be approved by the responsible authorities. Here in the case of Viyellatex cost
statement is approved by the BGMEA.
3.4.4. Step-4: Calculating the total claim amount (cash incentive).
In this stage, RRH follow its own format for calculating the total claim amount along with the
guide line of the central bank format. So the process of calculation is given below:
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In excel sheet 1(ud-13): (Appendix: 1)
At first allocate foreign back to back L/C value to all claim amounts. So make a
summation of foreign back to back l/c value. Then make a summation of invoice value of
all claims. After that, calculate the proportion of all claims. At last applicable value of
foreign back to back l/c amount will be execute.
In excel sheet 2 (ud-13(n)(m)): (Appendix: 2)
“n” is denoted here as the number of claim or file and “m” is the sub file of “n” . In
excel sheet 2 the client (here viyellatex) will provide the net weight of output of total
exported goods, its export number. On the other hand the exchange rate of those
individual file or claim will also be given. In each claim or file, six export numbers is
included, that means six individual exported lots make one claim. Now in order to
calculate the exchange rate:
a) Take the exchange rates of the first exports, bill of leading date from the
six exp no. of each claim.
b) Then take the exchange rates of the last exports bill of leading date.
c) Now calculate the average of the two exchange rates.
d) If any exchange rates is not found then a requisition will send to the
inclined bank (here the bank is HSBC).
In excel sheet 3 (ud-13 workings(n)(m)): (Appendix 3)
This format of calculation is given by the BB.
In calculation process:
a) Sheet 3 is comprised of two parts. These two parts have also linked with
the sheet 1 and 2. So the average exchange rate of sheet 2 and
proportional amount of sheet 1 brings the change in total calculation
process.
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b) In calculation process type input weight from cost statement given by the
viyellatex in cell G29.
c) Now make a link with the output weight from “sheet 2 cell D9” to “sheet 3
cell G30.
d) Calculate the required shipped net weight by multiplying .16 with the
input weight. Here 16% is the given markup by BB regarding the minimum
wastage level.
Now in the table format:
e) Calculate the applicable rate of the repatriated value by dividing required
shipment net weight (input) cell no. G 33 (comes from= G29*0.84) by the
actual shipped weight cell G 30.
f) Then write down the total repatriated export value of the particular claim
at the column numbering 3 in cell “E7”. But it is not the actual value;
actual value will be executed after deducting 16 % wastage from the total
repatriated exports. So in column 3 cell 10, 11 show the amount after
deducting the wastage value.
g) Calculate the net FOB value after deducting freight charge and
commission.
h) In Column 7 (c&f value) link with the “applicable foreign back to back L/C”
amount from sheet 1.
i) In column 8; put the amount of 125% of column 7.
j) In column 9; from the net FOB exported value the Required export
earnings for proper utilization of imported materials 125% of col 7 will be
deducted.
k) In column 10; for export earnings mentioned in col 9, maximum cost of
local yarn used 80% of col 9.
l) In column 11; Cost of fabrics collected from other local producers.
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m) In column 12; Maximum acceptable cost (mentioned in para Uma of
application) of own produced fabrics used.
n) In column 13; Applicant submitted cost (mentioned in para Uma of
application) own produced fabrics used.
o) In column 14; Repayable taka amount of cash incentive 5%, of 12 and 13
whichever is lower, multiply OD sight rate applicable on export proceed
realization date.
In the result check process
p) Applicable rate is 5% and the amount which one is lower in column 12 and
13 will be multiply by the applicable rate.
q) After that the amount will be exchange from taka to USD by using the
average exchange rate from sheet 2, related claim file.
3.4.5. Step-5: Preparation of the certificate of cash incentive. (Appendix 4)
After the preparation of the calculation, certificate of cash incentive will be prepared by the
audit firm. This certificate will be prepared by the statutory format of the RRH. Certificate will
be provided for each number. Certificate will contain the following information:
Master L/C no. date, value taken from application.
Total realize value.
Applicant claim amount in taka which will collect from sheet 3.
Export number, date, realized value.
Actual payable cash incentive in taka from sheet 3 according to Bangladesh bank
calculation process.
At last type financial year from bill of lading date.
3.4.6. Step-6: Preparation of detail of audit case: (Appendix 5).
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Rahman Rahman Huq Chartered Accountants
Detail of audit case is the tools by which an audit firm claims their audit fee from their client. In
the cash incentive audit, detail of audit case is contained the following things;
Address of the clients
Master L/C no. date, value from application
Invoice value form application.
Realized value from application.
Clients Claimed amount in taka.
Repayable (actual calculated amount) cash incentive in taka.
At last the calculations of audit fee. The audit fee generally claimed on the basis of
clients claimed amount of cash incentives rather than the repayable cash incentive
amount. So the calculation is;
i) if claimed amount is taka less than 500,000(<500,000) than audit fee is 4000.
ii) if the claim amount is equal or more than 500,000 but less than 10,00,000 than
audit fee is 5000.
iii) And if the claim amount is more than 10, 00,000 than the audit fee will be 7000.
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