Audit Report Analysis

5/2/2019 Audit Report
Analysis
Acknowledgement
We are really thankful to our respectable teacher for giving us a selected report topic. His
advices and our efforts played the important role about the report. We express our profound
indebtedness and gratitude for his valuable advice that helped immensely in preparing this report.
His guidance has been of extreme help to us. We are also thankful for all the times. We consulted
him and he answered with the utmost patience and perseverance. His guidelines for this paper
made it mandatory for us to seek learning in the work environment, which proved to be very
gratifying.
We also like to thank those whose work inspired and helped us to conduct this report on this
topic and those who have helped us throughout the period.
Finally thanks to our family and friends for their continuous support and love inspired us all the
time.
Table of Contents
ABSTRACT....................................................................................................................................6
Chapter-1.........................................................................................................................................7
1.1 Introduction............................................................................................................................7
1.2 Background of the Study.......................................................................................................7
1.3 Objectives..............................................................................................................................8
1.4 Limitations.............................................................................................................................8
Chapter-2 Methodology...................................................................................................................9
2.1 Sample...................................................................................................................................9
2.2 Sources of Data......................................................................................................................9
2.3 Collection and Analysis of data.............................................................................................9
Chapter 3 Literature Review..........................................................................................................10
Chapter 4 Introduction of the Variables........................................................................................12
Chapter 5 Analysis and Findings...................................................................................................16
Recommendation...........................................................................................................................37
Conclusion.....................................................................................................................................37
Reference.......................................................................................................................................38
ABSTRACT
This term paper is basically based on the audit report of 12 different companies where we
analyzed 6 variables. Through this term paper, we did a critical analysis based on the collected
data and it shows how auditing report varies from one company to another and how it can affect
the whole auditing opinion. The effect is different in different company. We also took the help to
spreadsheet to find out research result and provide interpretation of the result for that we can
easily justify the description of the output result of data. The main purpose of audit is to judge
the reliability of the financial statements and the supporting accounting records for a particular
financial period.
Chapter-1
1.1 Introduction
Audit and assurance is the service provided by any individual or a specific firm to carry out the
audit works of any Company. Though the performance of audit is optional for a private ltd.
Company but it is a must for the public ltd. Company. The public ltd. Company whose accounts
are audited can achieve goodwill and grab a major market in the share. Moreover, the
shareholders will also rely heavily on the company. So the task that we were given by our
respected faculty helped us a lot to know about different institutions and about the audit quality,
opinion, members of the audit committee, rotation of the audit committee and much more.
Assurance engagements involve three separate parties: a practitioner, a responsible party and
intended users of the assurance report. The responsible party is responsible for the information
on which the practitioner is engaged to give a conclusion.
Characteristically assurance engagements can be broken up into four stages:
 Planning
 Performance
 Conclusion
 Report work
By finding out the data we got to know about how the organizations are run and whether proper
governance in the organizations are being followed as well or not.
1.2 Background of the Study
Audits have become increasingly common as the complexity of the two primary accounting
frameworks, Generally Accepted Accounting Principles and International Financial Reporting
Standards, have increased, and because there have been an ongoing series of disclosures of
fraudulent reporting by major companies.
Bangladesh, as an emerging developing country, is committed to expanding revenue and

achieving fiscal discipline with a view to increasing self-dependence. The external environment
influencing the performance of different companies of Bangladesh has changed remarkably, as
the country became increasingly unsegregated with the global economy over the decades. In
recent years, The Securities and Exchange Commission requires that all entities that are publicly
held must file annual reports with it that are audited. Similarly, lenders typically require an audit
of the financial statements of any entity to which they lend funds.
1.3 Objectives
The paper focuses on evaluation based on the auditor’s report of 12 listed companies under DSE.
They are
 GlaxoSmithKline Bangladesh Limited

 Aziz pipes ltd.
 singer bd
 JMI group
 Marico Bangladesh Limited
 Aftab Automobiles
 Navana CNG Limited
 Kahinoor Chemical
 Ibn Sina Pharmaceutical Industry Limited
 Square Pharmaceuticals Ltd.
 Orion Infusion
 Orion Pharma
1.4 Limitations
The making of the paper was faced by the following limitations:
• Limited access to the annual reports of the banks.

• Time-constraints in making the report.
• Difficulty in getting resources and materials
Chapter-2 Methodology
2.1 Sample
The paper has been conducted mostly through secondary sources. The annual report of the
respective companies has been collected from Dhaka Stock Exchanges Commission.
Additionally, reports were also collected from their website. We have collected the reports of the
financial years for 5 years from 2013-2017. We also got some information from other websites.
2.2 Sources of Data

The data has been mostly collected from the secondary source which is from the website of DSE.
And also some of the data and Annual reports were collected by going to DSE as well.
2.3 Collection and Analysis of data

The data collection process involved taking the annual reports of the Companies. The official
website served as the main source for all the necessary information. Afterwards, the data was
processed so that it could be thoroughly analyzed for the purpose of making the paper.
Chapter 3 Literature Review
This paper is mostly concerned with the audit opinion of GlaxoSmithKline Bangladesh Limited,
Aziz pipes ltd, singer bd, JMI group, Marico Bangladesh Limited, Aftab Automobiles, Navana
CNG Limited, Kahinoor Chemical, Ibn Sina Pharmaceutical Industry Limited, Square
Pharmaceuticals Ltd, Orion Infusion, Orion Pharma. As the audit opinion plays the most vital
role in any financial report. Because the audit opinion assures the useful users whether the
financial statement portraits the true and fair view or not. Under Company act 1994, Bangladesh,
it is mandatory that every listed company should audit their financial statement and only
Chartered Accountants (CAs), members of ICAB, are authorized to perform audits. In this paper
we worked with 6 individual variables among them one is independent variables and rest of them
are dependent variables. This paper shows that how audit fees, audit qualities, audit
independence, member of audit committee and firm size has an impact on audit opinion. In the
article of Lystia&Aegos (2014), they stated four hypothesis regarding audit opinion from various
perspective.
H1: These is a significant influence of auditor independence on audit quality.
According to Agoes (2012), there are three types of independence, they are- (a) independent in
appearance, which is the outside view of the auditor himself in relation to the audit
implementation, (b) independent in fact, which is a situation that the auditor has high honesty
and conducts audits objectively, and (c) independent in mind, that is before carrying out the
audit, the auditor must free his mind from the desire to do something bad in the examination
even they should not expect to get any kind of gift from client.
H2: There is a significant influence of audit tenure on audit quality
Audit tenure has a significant effect on auditor independence. Research conducted by Ghosh and
Moon (2003 in Kusharyanti, 2003) resulted in findings that quality increase with the length of
the auditor tenure. This is contrary to the results of a research conducted by Indah (2010) which
states that the longer the auditor relationship with clients, could decrease the level of audit
quality, because the longer the auditor relating to client lead the auditor to be bias and impaired
the independency.
H3: There is a significant influence of audit fee on audit quality
The amount of audit fee can vary depending on the assignment risk, the services complexity, the
level of expertise required, the cost structure of Public Accountants Firm, and other professional
considerations.
H4: There is a significant influence of auditor independence, audit tenure, and audit fee on audit
quality
According to AAA Financial Accounting Standard Committee (2000), audit quality is

determined by the competence and independence.
“Good quality audit requires both competence (expertise) and independence. These qualities
have direct effects on actual audit quality, as well as potential interactive effects. In addition,
financial statement user’s perception if quality is a function of their perception of both auditor
independence and expertise.”
Widiastuty and Febrianto (2010) stated that audit quality is an audit conducted by an independent
and competent person. IAPI (2011) states that the audit should meet the auditing standards and
quality control standards.
We took some insights from the previous articles regarding audit opinion and other variables
related this matter published by some researcher for making this paper in the context of
Pharmaceuticals & Chemicals and Engineering sector of Bangladesh. And we also provided
some suggestions and future studies regarding audit opinion and independence.
Chapter 4 Introduction of the Variables
We have worked with one independent variables which is the audit opinion, and five dependent
variables, which are audit quality, audit fees, audit rotation, number of the member of audit
committee, and the firm size. We’re giving some description about these variables below –
Audit Opinion
The main purpose of audit is draw a conclusion whether the firm is showing true and fair view in
their financial statement or not. An auditor determines whether the financial statements of an
entity are presented fairly in all material respects and in accordance with accounting standards by
reviewing the underlying information and processes that went into preparing the financial
statements. There are two types of audit opinion, they are –
 Unmodified audit opinions - An unmodified opinion is also known as a clean opinion.

The auditor concludes that the financial statements of a given entity are presented fairly,
in all material respects, in accordance with generally accepted accounting principles.
 Modified Audit opinions – This can be divided into three parts-
Qualified Opinion Adverse opinion Disclaimer of opinion

The auditor, having obtained After having obtained The auditor is unable to
sufficient appropriate audit enough good audit evidence, obtain sufficient appropriate
evidence, concludes that the auditor concludes that auditevidence on which to
misstatements, individually misstatements, individually base the opinion, and
or in the aggregate, are or when grouped with other concludes that the possible
material but not pervasive to misstatements, are both effects on the financial
the financial statements, or material and pervasive to the statements of undetected
the auditor is unable to financial statements. misstatements, if any, could
obtain sufficient appropriate be both material and
audit evidence on which to pervasive.
base the opinion, but
concludes that the possible
effects on the financial
statements of undetected
misstatements, if any, could
be material but not
pervasive
Audit fees:
A fee a company pays an external auditor in exchange for performing an audit. The Institute of
Chartered Accountants of Bangladesh (ICAB) was established under the Bangladesh Chartered
Accountants Order 1973 (President’s Order No. 2 of 1973) for the purpose of regulating the
profession of Accountants and for matters connected therewith in the country. They have decided
the audit fees of external auditors in Bangladesh.
FEES SCHEDULE
MANUFACTURING COMPANIES:
Categor Based on Gross Assets Minimum Audit Fees

y or Gross Turnover
whichever is higher
AI (i) Amount not exceeding Tk. 3,50,000
Tk. 50 crore
AI (ii) Amount exceeding Tk. Tk. 3,50,000 + 10% of Tk. 3,50,000 for every Tk. 20 crore (or
50 crore but not part thereof) increase over Tk. 50 crore
exceeding Tk. 250 crore
AI (iii) Amount exceeding Tk. Tk. 7,00,000 + 8% of Tk. 7,00,000 for every Tk. 35 Crore (or
250 crore but not part thereof) increase over Tk. 250 crore
exceeding Tk. 500 crore
AI (iv) Amount exceeding Tk. Tk. 11,00,000 + 5% of Tk. 11,00,000 for every Tk. 100 Crore
500 crore but not (or part thereof) increase over Tk. 500 crore
exceeding Tk. 1,500
crore
AI (v) Amount exceeding Tk. Tk. 16,50,000 + 4% of Tk. 16,50,000 for every Tk. 120 Crore
1,500 crore (or part thereof) increase over Tk. 1,500 crore subject to a
minimum audit fee of Tk. 35,00,000, should such computation
result in a higher audit fee.
OTHER SECTORS INCLUDING SERVICE SECTOR:
Categor Based on Gross Assets Minimum Audit Fees

y or Gross Turnover
whichever is higher
AVI (i) Amount not exceeding Tk. 5,00,000
Tk. 50 crore
AVI (ii) Amount exceeding Tk. Tk. 5,00,000 + 10% of Tk. 5,00,000 for every Tk. 10
50 crore but not Crore (or part thereof) increase over Tk. 50 crore
exceeding Tk. 100
crore
AVI (iii) Amount exceeding Tk. Tk. 7,50,000 + 8% of Tk. 7,50,000 for every Tk. 12
100 crore Crore (or part thereof) increase over Tk. 100 crore
subject to a minimum audit fee of Tk. 15,00,000, should
such computation result in a higher audit fee.
Audit quality:
Auditors play a key role in contributing to the credibility of the financial statements on which
they are reporting. High-quality audit support financial stability. There is no set definition of a
quality audit, and many factors influence audit quality. Reputation of the audit firm is one of
them. ACNABIN, Qasem & Co, Rahman Rahman Huq, Howladar Yunus & Co, Masin Muhit &
co, Nurul faruk hasan are the big six audit firm of Bangladesh. Audit done by these organizations
can be seen as most reliable and trustworthy.
Audit Independence:
Auditor independence refers to the independence of the internal auditor or of the external auditor
from parties that may have a financial interest in the business being audited. Independence
requires integrity and an objective approach to the audit process. One audit firm can audit a
company not more than 3 times. Audit rotation helps to ensure audit quality. There are two
opposing views on the effects of audit rotation on the audit quality.
1. When the auditor-client relationship lengthens, the auditor may develop close
relationship with the client and become more likely to act in favor of
management, thus reducing the audit quality.
2. On the other hand, when the audit rotation didn’t happen, the auditor develops
their understanding of the business and develop their expertise during the audit,
resulting in higher audit quality.
Number of the member of audit committee
The company shall have an Audit Committee as a sub-committee of the Board. It shall assist the
Board in ensuring that the financial statements reflect true and fair view of the state of affairs of
the company and in ensuring a good monitoring system within the business. Most audit
committees are made up of three to five or sometimes as many as seven directors who are not a
part of company management. This is the twelve criteria from the guidelines suggested by
Securities and Exchange Commission (SEC) in 2006 that a listed company must have an audit
committee. The chairman of the committee must have to be the independent director.
Chapter 5 Analysis and Findings

GlaxoSmithKline Bangladesh Limited
GSK - one of the world's leading research-based pharmaceutical and healthcare companies - is
committed to improving the quality of human life by enabling people to do more, feel better and
live longer. They have 3 global businesses that research, develop and manufacture innovative
pharmaceutical medicines, vaccines and consumer healthcare products. Their goal is to be one of
the world’s most innovative, best performing and trusted healthcare companies. Their values and
expectations are at the heart of everything they do and help define their culture - so that together
the can deliver extraordinary things for their patients and consumers and make GSK a brilliant
place to work.
Dependent
Independent Variables
Variable
Audit
Audit Indepen No of
Firm Size
Name of the Company Year Audit Opinion Quality dence Members
Audit (measured
(Unqualified=0 (Big 6=1, (Rotation in Audit
Fees by total
, Modified=1) otherwis =1, Committ
asset)
e=0) otherwis ee
e=0)
GlaxoSmithKline
Bangladesh Limited 2013 0 600000 0 0 3 3997625
GlaxoSmithKline
GlaxoSmithKline
1 2015 0 600000 0 1 3 5582419
Bangladesh Limited
GlaxoSmithKline
GlaxoSmithKline
Audit Opinion:
From The given information it can be concluded that the auditors declared the report of GSK
Bangladesh as unqualified. They clearly stated that their report provides true and fair view and is
in accordance with Bangladesh financial reporting standards or Bangladesh accounting
standards. HodaVasi Chowdhury was the external auditors of GSK Bangladesh for the ear 2013-
2014. Later in 2015-2017 ACNABIN was the auditor of GSK Bangladesh who is a part of Big 6.
Audit Fees:
As we can see the audit fess for all the 5 years was same BDT 600000 even after the rotation of
the auditors.
Audit Rotation:
As we can see in 2013 and 2014 HodaVasi Chowdhury were the auditors of the company but in
2015-2017 ACNABIN was their auditor.
Number of audit members in the Audit Committee:
The audit committee is composed of at least three members. Here we see that 3 members have
been appointed over a span of 5 years, where the board is comprised of non-executive directors
Firm Size (measured by total asset):
Total Asset for the year 2013, 2014, 2015, 2016, 2017 are 3997625; 5028322; 5582419;
5342813; 6243817 respectively
Aziz Pipes Ltd.
Aziz Pipes Limited was incorporated in the year 1981 with the aim at manufacturing PVC Rigid
Pipes. It has started its commercial production in the year 1985 with the yearly installed capacity
of 1200 M.Ton. With the passage of 12 years of time from 1985 to 1996, the Company increased
its total production capacity of 7500 M. Ton per year. In 1995, the Company diversified its
production line of manufacturing PVC Flexible Corrugated Conduit Pipes. In addition to meet-
up local market demand, PVC Pipes are being exported under deemed sector earning a good
amount of foreign exchanges, PVC Plastic Wood and PVC Profiles are also being getting
popularity in local market. Plastic Wood is now being exported to our neighboring SAARC
countries as well as in the Middle East.
Dependent
Variable
Audit No of
Name of the Audit Firm Size
Year Audit Opinion Independenc Members
Company Audit Quality (Big (measured
(Unqualified=0 e in Audit
Fees 6=1, by total
, Modified=1) (Rotation=1, Committe
otherwise=0) asset)
otherwise=0) e
Aziz pipes ltd. 2013 0 92000 0 0 4 404308890
Aziz pipes ltd.
2014 0 95000 0 0 4 372182485
Aziz pipes ltd.
2015 0 60000 0 0 4 350656652
2
Aziz pipes ltd.
2016 0 60000 0 1 4 322705871
11500
Aziz pipes ltd.
2017 0 0 0 0 4 320327287
Audit Opinion:
From the given information it can be concluded that the auditors declared the report of Aziz
pipes ltd as unqualified. It is clearly stated that their report provide true and fair view and is in
accordance with Bangladesh financial reporting standards or Bangladesh accounting standards.
Haque Shah Alam Mansur & co.was the external auditors of Aziz Pipes Ltd for the ear 2013-
2015. Later in 2016-2017 Khan Wahab Shafique Rahman & Co. was the auditor of Aziz Pipes
Ltd. who is not also a part of Big 6.
Audit Fees:
As we can see the audit fees varied in all the 5 years. In 2013 it was 92000 BDT. Than in 2015-
2016 it remained constant of 60000 BDT. It increased to 115000BDT in 2017.
Audit Rotation:
As we can see from 2013-2015 Haque Shah Alam Mansur & co. were the auditors of the
company but in 2016-2017 Khan Wahab Shafique Rahman & Co. was the auditor of the
company
The audit committee is composed of at least three members. Here we see that 4 members have
been appointed over a span of 5 years, where the board is comprised of non-executive directors.
Total Asset for the year 2013, 2014, 2015, 2016, 2017 are 404308890; 372182485; 350656652;
322705871; 320327287 respectively.
Ibn Sina Pharmaceutical Industry Limited
Ibn Sina Pharmaceutical Industry Limited is one to the leading and faster growing
pharmaceutical company in Bangladesh. This company started its journey in the year 1983. This
company creates value for its customers and other stakeholder by providing highest quality
health care solutions through appropriate application and development of resources and process.
Dependent
Variable
Name of the Audit Audit No of Firm Size
Year Audit Opinion
Company Audit Quality (Big Independenc Members (measured
(Unqualified=0,
Fees 6=1, e (Rotation=1, in Audit by total
Modified=1)
otherwise=0) otherwise=0) Committee asset)
Ibn Sina
Pharmaceutical
Industry 201 171,00
Limited 3 0 0 0 0 3 1,096,432,108
Ibn Sina
Pharmaceutical
Industry 201
Limited 4 0 182500 0 0 3 1,195,170,560
Ibn Sina
Pharmaceutical

Industry 201
Limited 5 0 210250 0 0 3 1,615,839,671
Ibn Sina
Pharmaceutical
Industry 201
Limited 6 0 150000 0 1 3 1,511,177,231
Ibn Sina
Pharmaceutical
Industry 201
Limited 7 0 201250 0 0 4 2,441,736,657
Audit Report Opinion & Quality:
Opinions of audit report all are unqualified and auditors are assuring that the Ibn Sina
Pharmaceutical Industry Limited’s financial statement provides true and fair view. Malek
Siddiqui Wali audited Ibn Sina Pharmaceutical Industry Limited Company from the year 2013-
2015 and Malek Siddiqui Wali is not a part of big six firms. SF Ahmed & Co audited the
company from the year 2016-2017 also this audit firm is not a part of big six firms.
Audit Fees:
The audit fees increase from 171000 to 210250 consecutively from the year 2013-2015. Audit
fees decrease to 150000 with the change of audit firm and it again increases to 210250 in the
year 2017
Audit Rotation:
An external auditor shall not audit the company for consecutive 3 years. Malek Siddiqui Wali
audited the company from the year 2013 to 2015 then the auditors were changes for next year.
The audit committee is composed of at least three members. There were 3 members in the audit
committee form the year 2013 to 2016 and there were 4 members in the audit committee in the
year 2017.
Total asset was 1096432108, 1195170560, 1615839671, 1511177231, 2441736657 in the year
2013, 2014, 2015, 2016, 2017 consecutively.
Square Pharmaceuticals Ltd.
From the inception in 1958, Square Pharmaceuticals Ltd has today burgeoned into one of the top
line conglomerates in Bangladesh. Square Pharmaceuticals Ltd., the flagship company, is
holding the strong leadership position in the pharmaceutical industry of Bangladesh since 1985
and is now on its way to becoming a high performance global player. SQUARE Pharmaceuticals
Limited is the largest pharmaceutical company in Bangladesh and it has been continuously in the
1st position among all national and multinational companies since 1985. SQUARE
Pharmaceuticals Limited has extended its range of services towards the highway of global
market. It pioneered exports of medicines from Bangladesh in 1987 and has been exporting
antibiotics and other pharmaceutical products. Present export market covers 42 countries.
Dependent
Variable
Name of the Audit Audit No of
Year Audit Opinion Firm Size
Company Quality (Big Independenc Members
(Unqualified=0 Audit Fees (measured by
6=1, e (Rotation=1, in Audit
, Modified=1) total asset)
otherwise=0) otherwise=0) Committee
Square
Pharmaceutical
s Ltd. 2013 0 287500 0 0 3 23,447,645,506
Square
Pharmaceutical
s Ltd. 2014 0 287,500 0 0 3 2,323,727,933
Square
Pharmaceutical
s Ltd. 2015 0 287500 0 0 3 3,179,169,773
Square
Pharmaceutical
s Ltd. 2016 0 385,825 0 1 3 44,303,769,450
Square
Pharmaceutical
s Ltd. 2017 0 313,950 0 0 3 52,531,052,249
Das Chowdhury Dutta & Co audited Square Pharmaceuticals Ltd Company from the year 2013
to year 2015. Opinions of audit report all are unqualified and auditors are assuring that the
Square Pharmaceuticals Ltd’s financial statement provides true and fair view. Das Chowdhury
Dutta & Co is not a part of big six firms. Later Ahmed Zaker & Co audited the Square
Pharmaceuticals Ltd Company from the year 2016 to 2017 and opinions of audit report all are
unqualified and auditors are assuring that Square Pharmaceuticals Ltd’s financial statement
provides true and fair view in these years. Ahmed Zaker & Co is also not a part of big six firms.
Audit Fees:
Audit fees were 287500 in the year 2013-2015 and it increased to 385825 in the year 2016 and
decreased to 313950 in the year 2017.
Audit Rotation:
An external auditor shall not audit the company for consecutive 3 years. Das Chowdhury Dutta
& Co audited the company from the year 2013-2015 and for next year auditors were changes.
Ahmed Zaker & Co audited the company in the year 2016 and 2017.
The audit committee consists of at least three members. There were 3 members in 2013-2017
years.
Total asset was 23447645506, 2323727933, 3179169773, 44303769450, 52531052249 in the

year 2013, 2014, 2015, 2016, 2017 consecutively.
JMI Syringes and Medical Devices
JMI Syringes & Medical Devices Ltd. is the leading manufacturer of precision safety syringes
and medical devices in Bangladesh serving the health care community both here and across our
borders. JMI Syringes & Medical Devices Ltd. is a joint venture enterprise with Republic of
Korea. RAHMAN MUSTAFIZ HAQ and Co. audited the accompanying financial statements of
JMI Syringes and Medical Devices which comprise the statement financial position as at 31st
December 2013. G. KIBRIA and Co. audited the accompanying financial statement of JMI
Syringes and Medical Devices which comprise the statement financial position as at 31st
December 2014-2017.
Name of Year Dependent

the Variable
Compan Audit Opinion Audit Audit Audit No of Firm Size
y (Unqualified=0 Fees Quality (Big Independenc Members (measured

, Modified=1) 6=1, e in Audit by total
otherwise=0 (Rotation=1, Committe
asset)
) otherwise=0) e
JMI 201 191836008
group 3 0 80500 0 1 4 2
JMI 201 13800 184381313
group 4 0 0 0 0 3 1
JMI 201 201475701
2
group 5 0 92000 0 0 4 1
JMI 201 23000 202178412
group 6 0 0 0 0 4 7
JMI 201 15000 247946243
group 7 0 0 0 0 4 7
From the analysis we see that in auditor opinion the financial statements prepared in accordance
with Bangladesh financial reporting standards or Bangladesh accounting standards give a true
and fair view which states the opinions are all unqualified.
Audit Fees:
In 2013 to 2014, the fees increased from BDT. 80500 to almost BDT 138000, in 2015 again in
decreased to 92000 & from 2016 to 2017 the fees again decreased from 230000 to BDT
150000.so the fees seem to fluctuate.
Audit Rotation:
Here we see that in 2013, the auditors were rotated, there is a little discrepancy in the audit report
because the audit rotation should be done once every three years but here in four years no
rotation is done.
The Audit Committee is a sub-committee of the board. The audit committee is composed of at
least three members. Here we see that 3/4 members have been appointed over 5years.
Total asset was 1918360082, 1843813131, 2014757011, 2021784127, 2479462437. For the year
2013, 2014, 2015, 2016 and 2017 respectively
Singer Bangladesh Ltd
Singer has been in this region (now Bangladesh) since 1905 when the first Singer sewing
machines went on sale at Chittagong and Dhaka stores at that time the country was a part of the
Indian sub-continent. From a single brand single product company, Singer has grown into a retail
giant with revenue exceeding Taka 7,000 million, continuing to be the favorite brand of
Bangladesh. The Company's successful multi-brand strategy combines products of world's
famous brands with the Company's own brands. S.F AHMED & CO. audited the accompanying
financial statements of Singer Bangladesh Ltd which comprise the statement financial position as
at 31st December 2013 and 2014. Rahman Rahman Huq audited the accompanying financial
statements of Singer Bangladesh Ltd which comprise the statement financial position as at 31st
December 2015-2017.
Name of Yea Dependent

the r Variable
Compan Audit Opinion Audit Audit Audit No of Firm Size
y (Unqualified=0 Fees Quality (Big Independenc Members (measured

, Modified=1) 6=1, e in Audit by total
otherwise=0 (Rotation=1, Committe
asset)
) otherwise=0) e
201 34500 4,236,217,59
singer bd 3 0 0 0 0 4 0
201 34500 3,821,156,13
singer bd 4 0 0 0 0 4 4
201 46000 3,652,909,20
1
singer bd 5 0 0 1 1 5 0
201 52000 5,700,118,99
singer bd 6 0 0 1 0 4 3
201 59638 7,071,584,79
singer bd 7 0 5 1 0 5 1
In auditor opinion the financial statements prepared in accordance with Bangladesh financial
reporting standards or Bangladesh accounting standards give a true and fair view of the state of
the companies’ affairs. In addition, no adverse opinion was put forward. The audit firms of all
these 2013-14 is not a part of Big 6 firms. In 2015-17 Rahman Rahman Huq audited their report
which is a part of Big 6.
Audit Fees:
With increasing years and increasing number of members the fees seem to increase. From 2013
to 2017 the fees increased from BDT 345000 to 596385.
Audit Rotation:
Here we see that in 2015, the auditors were rotated, which ensures transparency and avoids
familiarity threat, self-review threat.
Here we see that 4/5 members have been appointed over 5 years.
Total asset was 4,236,217,590, 3,821,156,134, 3,652,909,200, 5,700,118,993, 7,071,584,791.

For the year 2013, 2014, 2015, 2016 and 2017 respectively
Navana CNG
Dependent Variable Independent Variables
Audit
No of
Name of the Company Year Audit Opinion Audit Quality Independenc Firm Size
Members
(Unqualified=0, Audit Fees (Big 6=1, e (measured by
in Audit
Modified=1) otherwise=0) (Rotation=1, total asset)
Committee
otherwise=0)
Navana CNG Limited 2013 0 100,000 0 1 3 1,988,354,339
From the analysis we see that the opinions of auditors are all unqualified for Navana CNG Ltd’s
financial statements and the auditors are assuring that the Navana CNG Ltd’s financial statement
provides true and fair view. The audit firms which have audited the financial statements of
Navana CNG Ltd. were not the part of Big 6 firms.
Audit Fees:
With the changes of auditor the fees also increase from BDT. 100000 to almost BDT 200000.
Audit Rotation:
An external auditor can audit the same organization max. for 3 consecutive years. It may resume
the role as external auditor with the same bank after a lapse of two years from the last audit
engagement. Here we see that in 2013, 2016 (Malek Siddiqui Wali firm) the auditors were
rotated.
The audit committee is composed of at least three members. Here we see all the committee were
held with 3members.
Total asset was 1,988,354,339; 2,230,479,105; 2,319,127,301; 4,430,455,220; 7,643,255,155.

For the year 2013, 2014, 2015, 2016 and 2017 respectively.
Kohinoor Chemicals
Dependent Variable Independent Variables
Audit
No of
Name of the Company Year Audit Opinion Audit Quality Independenc Firm Size
Members
(Unqualified=0, Audit Fees (Big 6=1, e (measured by
in Audit
Modified=1) otherwise=0) (Rotation=1, total asset)
Committee
otherwise=0)
Kahinoor Chemical 2013 0 50000 0 1 3 1,668,177,438
From the analysis we see that the opinions are all unqualified, as in the auditors are assuring that
the Kohinoor Chemicals financial statement provides true and fair view.
The 3 different audit firms of all these years are not a part of Big 6 firms.
Audit Fees:
With increasing years and increasing number of members, the fees also increase from BDT.
50,000 to BDT 2,20,000 .
Audit Rotation:
An external auditor shall not audit the same organization for more than 3 consecutive years. It
may resume the role as external auditor with the same org. after a lapse of two years from the last
audit engagement. Here we see that in 2013,2014 done by A.Matin & co. and 2016,2017 has
been done by the firm named Toha khan Zaman and co. and 2015 were done by Kazi Zahir khan
& co.
The audit committee is composed of at least three members. Here we see that 4years the
committees were having 3 members as the audit committee except the year of 2015 as there were
4 members in audit committee.
Total asset for the year 2013, 2014, 2015, 2016 and 2017 respectively was 1,668,177,438;
1,745,368,557; 1,656,468,333; 1,708,212,364; 1,530,809,740
Marico Bangladesh Limited
Marico Bangladesh Limited is a subsidiary of a leading Indian consumer products company,
Marico Limited. Founded in 1990 by the incumbent Group Chairman Harsh Mariwala, Marico
has expanded its presence in 25 countries across Asia and Africa – with a growing portfolio of
brands that have become trusted household names for quality.
Dependent
Variable
Name of Audit Audit
Audit No of
the Year Opinion Quality
Audit Independence Members in Firm Size (measured by
Company (Unqualifie (Big 6=1,
Fees (Rotation=1, Audit total asset)
d=0, otherwise
otherwise=0) Committee
Modified=1) =0)
Marico
Bangladesh 201
Limited 3 0 400,000 1 0 3 5,183,078,478
Marico
Bangladesh 201
Limited 4 0 460,000 1 0 3 3,673,509,256
Marico
1 Bangladesh 201
Limited 5 0 480,000 1 0 4 3,353,932,343
Marico
Bangladesh 201
Limited 6 0 812,000 1 1 4 3,466,837,492
Marico
Bangladesh 201
Limited 7 0 1,300,900 1 0 6 3,752,101,888
Audit Opinion:
From 2013 to 2017 the audit report of Marico Bangladesh Limited has shown the unqualified
report. It means that their report provides true and fair view and is in accordance with
Bangladesh financial reporting standards or Bangladesh accounting standards. Quasem & co.
was the external auditors of Marico Bangladesh Limited for the ear 2013-2015. Later in 2016-
2017 Nurul Fruk Hasan & co. was the auditor of Marico Bangladesh Ltd. The both are the part of
Big 6.
Audit Fees:
As we can see the audit fess for 3 years was respectively 400,000, 460,000, and 4,80,000. After
the change of audit firm, it has increase up to from 812000 to 1300000bdt.
Audit Rotation:
As we can see in 2013 to 2015 Quasem and co. was the auditors of the company. And in 2016-
2017 Nurul Faruk hasan was appointed as their auditor.
The audit committee is composed of at least three members. Here we see that in 2013 and 2014
there were 3 members, and in 2015 and 2016 there was 4 members, and in 2017 there was 6
members in the audit committee.
Total Asset for the year 2013, 2014, 2015, 2016, 2017 are 5,183,078,478; 3,673,509,256;
3,353,932,343; 3,466,837,492; 3,752,101,888 respectively.
Aftab Automobiles Ltd.

Aftab Automobiles Limited (erstwhile East Pakistan Automobiles Limited) was incorporated as
a Private Limited Company in the year 1967 with a mission for assembling of Toyota Land
Cruiser (Jeep). The Assembling Plant of the Company is presently located at Fouzderhat Heavy
Industrial Estate, Chittagong on a land measuring more or less 12.33 acres. In 1981 the Company
was converted into Public Limited Company which is the lone largest assembler-cum-
progressive manufacturer of Toyota & Hino vehicles in the private sector of the country. Their
Motto is ‘Better Product Better Service’ and their goal is ‘To be the No. 1’ in the transport sector
of the Country.
Dependent
Variable
Name of the Audit Audit No of
Year Audit Opinion Firm Size
Company Audit Quality (Big Independence Members
(Unqualified=0, (measured by
Fees 6=1, (Rotation=1, in Audit
Modified=1) total asset)
otherwise=0) otherwise=0) Committee
Aftab
Automobiles
Ltd 2013 0 90000 0 0 3 7524216860
Aftab
Automobiles
Ltd 2014 0 100000 0 0 3 7745987417
Aftab
2 Automobiles
Ltd 2015 0 130000 0 0 3 9553438526
Aftab
Automobiles
Ltd 2016 0 172500 0 1 3 9791411491
Aftab
Automobiles
Ltd 2017 0 250,000 0 0 3 11,893,826,976
Audit Opinion:
From 2013 to 2017 the audit report of Aftab Automobiles Limited has shown the unqualified
report. It means that their report provides true and fair view and is in accordance with
Bangladesh financial reporting standards or Bangladesh accounting standards Rahman Mostafa
Alam was the external auditors of Aftab Automobiles Limited for the ear 2013-2015. Later in
2016-2017 Malek Siddique Wali was the auditor of Aftab Automobiles Ltd. The both are not the
part of big 6.
Audit Fees:
As we can see the audit fess for 3 years was respectively 90000, 100000, 130000. After the
change of audit firm, it has increase up to from 172500 to 250000.
Audit Rotation:
As we can see in 2013 to 2015 Rahman Mostafa Alam & co. was the auditors of the company.
And in 2016-2017 Malek Siddique Wali was appointed as their auditor.
The audit committee is composed of at least three members. Here we can see that from 2013 to
2017 there was 3 members in their audit committee.
Total Asset for the year 2013, 2014, 2015, 2016, 2017 are 7524216860, 7745987417,
9553438526, 9791411491 and 11,893,826,976 respectively.
Orion Infusion Ltd.

Orion Infusion Ltd , formerly named Mala Chemical & Pharmaceuticals Industries Ltd. started
its humble operation in 1989 & became a public limited company in the year 1994 as a new
addition to the specialized Large Volume I.V. Manufacturer in Bangladesh. The company is
devoted in producing Large Volume Parenteral (LVP) & other life saving injectable products.
Orion Infusion Ltd has the manufacturing facilities for the production of I. V. Rehydration
Dependent
Variable
No of
Audit Audit Firm Size
Name of the Company Year Audit Opinion Members
Audit Quality (Big Independenc (measured
(Unqualified=0, in Audit
Fees 6=1, e (Rotation=1, by total
Modified=1) Committe
otherwise=0) otherwise=0) asset)
e
1 Orion Infusion Limited
201
3 0 50000 0 0 3 685,196,870
201
Orion Infusion Limited 4 0 115000 0 0 3 719,196,366
Orion Infusion Limited 201 0 57500 0 1 3 707586561
5
201
201
Audit Report, Opinion and Quality:
From the analysis, we see that the opinions are all unqualified, as in; the auditors are assuring
that Orion Pharma’s financial statement provides true and fair view. Also we can see that the
opinions are normal. And the auditor or last 5 years are not from the big 6.
Audit Fees:
Audit fees gradually increased from year to year.
Audit Rotation:
From 2013 to 2015, audit farms rotated 3 times. From 2013-2015 the audit farm was same, the
auditors were rotated, which ensures transparency and avoids familiarity threat, self-review
threat. Also follows the law of changing auditors every 3 years.
Numbers of Audit Members in The Audit Committee:
An audit committee must consist of minimum 3 members. Here from 2013-2014 the committees
consisted of 3-4 members. And in 2017 the committee consisted of 9 members.
Orion Pharma
Orion Pharma Ltd. is one of the premier pharmaceutical companies of Bangladesh which has
been contributing to improving the human health care of the country by providing quality
branded-generic pharmaceuticals. We, at Orion Pharma Ltd., always believe in 'Quality never
ends' and refuse to settle for anything until it exceeds the existing standard. For this, Orion
Pharma Ltd. has been superseding the market growth consistently by wide margin in last few
years. The company has been awarded with the ISO-9001: 2000 Certificate in January 2003 for
serving its valued customers with products of excellent quality. Having four decades of vast
experience imbibed with technical and professional expertise, now Orion Pharma Ltd.
Dependent
Variable
Name of
Audit No of
the Year Audit Opinion Audit Quality Firm Size
Audit Independence Members
Company (Unqualified=0, (Big 6=1, (measured by
Fees (Rotation=1, in Audit
Modified=1) otherwise=0) total asset)
otherwise=0) Committee
Orion
Pharma 2013 0 300000 0 1 3 25754200960
orion
pharma 2014 0 345000 0 1 4 26,092,326,892
Orion
2
Pharma 2015 0 550000 0 1 4 26501292558
Orion
Pharma 2016 0 920000 0 0 3 26889905295
Orion
Pharma 2017 0 1150000 0 0 9 28162786455
Audit Report, Opinion and Quality:
From the analysis, we see that the opinions are all unqualified, as in; the auditors are assuring
that Orion Infusion’s financial statement provides true and fair view. Also we can see that the
opinions are normal. And the auditor or last 5 years are not from the big 6.
Audit Fees:
Audit fees fluctuated. In 2013 it was low, it suddenly raised at 2014. In 2015 it decreased again.
Then Increased gradually for 2 years.
Audit Rotation:
From 2013 to 2014, the same farm audited. In 2015 the audit farm rotated and the same farm
audited till 2017. The auditors were rotated, which ensures transparency and avoids familiarity
threat, self-review threat. Also follows the law of changing auditors every 3 years.
Numbers of Audit Members in The Audit Committee:
An audit committee must consist of minimum 3 members. Here, from 2013-2017, the audit
committee consisted of 3 members constantly.
Recommendation
Our team has work with total 12 listed company of Bangladesh, and we all found that the audit
opinion of each company is same whether it’s a big company or a medium rated company
according to the firm size and rating of that company. Each company’s audit report is showing
that the financial statement is presenting the true and fair view and compliance with the
accounting standards and laws and regulations. Then why do we see many report regarding
corruption and violence of rules and regulation, market instability, sudden urge of going
bankruptcy and so on. So there must be a loop holes of giving unqualified audit opinion. Audit
firm independency, audit fees, audit quality has big impact on audit opinion. On the other hand,
the audit fees of an audit firm are comparatively low form our neighboring country such as India,
Srilanka, Pakistan etc. This also can affect the audit opinion. So we suggest that
1. We should identify the fact that why every financial statement of our country portraits the
true and fair value despite being a corrupted nation.
2. The ICAB should have a special eye on increasing the audit fees in pace with the other
developing countries.
3. The audit firm can archive all the audit reports of the companies they were engaged with
in one portal, so that the public can easily access them.
4. Transparency of external audit committee member who are engaged with that particular
audit engagement for ensuring the audit independence.
Conclusion
By doing this term paper we have got to learn about the auditing procedure of 12 different
companies. We got to know the opinions, audit fees and other internal and external materials.
This has surely helped us to judge various companies according to the audit report. Though there
may be some scope for manipulations and we had our limitations in finding them. Here the main
manipulation factor maybe the audit fees or managements direct influence on auditors. still this
term paper has enlightened us a lot regarding the practical perspective of auditing.
Reference
https://pdf.sciencedirectassets.com/277811/1-s2.0-S1877042814X00613/1-s2.0-
S1877042814059035/main.pdf
https://www.investopedia.com/terms/a/auditors-opinion.asp
https://www.ifac.org/about-ifac/membership/country/bangladesh
https://www.dsebd.org/by_industrylisting1.php
https://www.saonm.org/media/uploads/OSA_Audit_Overview_Jan_19_2016.pdf
https://patch.com/california/banning-beaumont/the-importance-of-the-audit-opinion
https://www.researchgate.net/publication/228269820_Audit_Committee_Disclosure_of_Listed_
Companies_in_Bangladesh_An_Empirical_Study
www.icab.org.bd/icabweb/webFileUpload/showDoc?fileWithPath=/app/.../fees...
http://www.icab.org.bd/webCouncil/fList
https://www.charteredaccountantsanz.com/member-services/technical/audit-and-assurance/audit-
quality
https://www.sciencedirect.com/science/article/pii/S1877042814059035

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5/2/2019 Audit Report

Characteristically assurance engagements can be broken up into four stages:

1.2 Background of the Study

Bangladesh, as an emerging developing country, is committed to expanding revenue and

 GlaxoSmithKline Bangladesh Limited

The making of the paper was faced by the following limitations:

• Limited access to the annual reports of the banks.

• Difficulty in getting resources and materials

2.2 Sources of Data

2.3 Collection and Analysis of data

H1: These is a significant influence of auditor independence on audit quality.

H2: There is a significant influence of audit tenure on audit quality

H3: There is a significant influence of audit fee on audit quality

According to AAA Financial Accounting Standard Committee (2000), audit quality is

 Unmodified audit opinions - An unmodified opinion is also known as a clean opinion.

Qualified Opinion Adverse opinion Disclaimer of opinion

Categor Based on Gross Assets Minimum Audit Fees

OTHER SECTORS INCLUDING SERVICE SECTOR:

Categor Based on Gross Assets Minimum Audit Fees

Number of the member of audit committee

Chapter 5 Analysis and Findings

Number of audit members in the Audit Committee:

Firm Size (measured by total asset):

Aziz Pipes Ltd.

Number of audit members in the Audit Committee:

Firm Size (measured by total asset):

Audit Report Opinion & Quality:

Number of audit members in the Audit Committee:

Firm Size (measured by total asset):

Square Pharmaceuticals Ltd.

Audit Report Opinion & Quality:

Number of audit members in the Audit Committee:

Firm Size (measured by total asset):

Total asset was 23447645506, 2323727933, 3179169773, 44303769450, 52531052249 in the

JMI Syringes and Medical Devices

Name of Year Dependent

y (Unqualified=0 Fees Quality (Big Independenc Members (measured

Audit Report Opinion & Quality:

Firm Size (measured by total asset):

Singer Bangladesh Ltd

Name of Yea Dependent

y (Unqualified=0 Fees Quality (Big Independenc Members (measured

Audit Report Opinion & Quality:

Firm Size (measured by total asset):

Total asset was 4,236,217,590, 3,821,156,134, 3,652,909,200, 5,700,118,993, 7,071,584,791.

Dependent Variable Independent Variables

Audit Report Opinion & Quality:

Number of audit members in the Audit Committee:

Firm Size (measured by total asset):

Total asset was 1,988,354,339; 2,230,479,105; 2,319,127,301; 4,430,455,220; 7,643,255,155.

Dependent Variable Independent Variables

Number of audit members in the Audit Committee:

Firm Size (measured by total asset):

Number of audit members in the Audit Committee:

Firm Size (measured by total asset):