Jahangirnagar University: Assignment ON

JAHANGIRNAGAR UNIVERSITY
Assignment ON
Audit practice and Accounting practice of Bank Asia limited, Acme laboratories limited
and Al-haj textile mills limited
Course Title: Corporate Auditing

Course Code: EACT-514
Submitted To:
Ms. Tanjila Hossain
Assistant Professor
Department of Accounting and Information Systems
Faculty of Business Studies
Jahangirnagar University
Submitted By:
Md: Mostafizur Rahman
ID: 20192029
Program: EMBA
Batch: 24th
Jahangirnagar University
Date of Submission: 19th, March 2021

Audit practice and Accounting practice of three companies.
1 BANK ASIA LIMITED
2ACME LABOROTORIES LIMITED

3AL-HAJ TEXTILE MILLS LIMITED
Audit Practice
Audit:
An audit of financial statements is to enable the auditor to express an opinion whether the financial
statements are prepared, in all material respects, in accordance with an applicable financial
reporting framework.
The key criteria of an assurance engagement can be seen in an audit as follows:

1. Three party involvement
– The shareholders (users)
– The board of directors (the responsible party)
– The audit firm (the practitioner)
2. Subject matter
– The financial statements
3. Relevant criteria
– Law and accounting standards
4. Evidence
– As has been said earlier, sufficient and appropriate evidence is required to
support an assurance opinion.
Some Word Meaning:
True: Information is factual and conforms to reality, not false. In addition, the information
conforms to required standards and law. The accounts have been correctly extracted from the
books and records.
Fair: Information is free from discrimination and bias in compliance with expected standards and
rules. The accounts should reflect the commercial substance of the company’s underlying
transactions.
Materiality: An expression of the relative significance or importance of a particular matter in the

context of financial statements as a whole.
Assurance:
Two types of assurance –
1. Reasonable assurance.
2. Limited assurance.
Accounting Practice
Four types of Financial Report-
1. Balance Sheet
2. Income Statement
3. Cash Flow Statement
4. Owner’s equity Financial Practice:
• Financial ratio analysis and common-size analysis help gauge the financial
performance and condition of a company through an examination of relationships
among these many financial items.
• A thorough financial analysis of a company requires examining its efficiency in
putting its assets to work, its liquidity position, its solvency, and its profitability.
• We can use the tools of common-size analysis and financial ratio analysis, including
the DuPont model, to help understand where a company has been.
• We then use relationships among financial statement accounts in pro forma

analysis, forecasting the company’s income statements and balance sheets for
future periods, to see how the company’s performance is likely to evolve.
BANK ASIA LIMITED

Analysis of Audit Report at 2019
Particular Comment
Title of Audit Independent Auditor’s Report to the
Shareholders of Bank Asia limited Report on
the Audit of the Financial Statements
Name of Audit Company Hoda Vasi Chowdhury & Co

Name of Auditor Hoda vasi Chowdhury
Repetition Same Company Audit the Company previous
year 2018
Date of Audit 23 February 2020

Audit Fee 467,326 Taka
Department of Audit 1. The profit and loss account, statement of
changes in equity and cash follow statement.
2. IT systems and controls.
3.Governance for the Financial Statements and
Internal Control
4. Report on other Legal and Regulatory
Requirements.
Auditor’s Opinion Give true and fair view of the financial position
of the Company.
Assurance Auditor did not express any form of assurance
conclusion.
Standards followed by Company 1.International Financial Reporting

Standards(IFRSs)
Standards followed by Auditor 1.International Standards on Auditing (ISAs)
2.Ethics for Professional Accountants (IESBA
Code)
3.Bangladesh Securities and Exchange
Commission
4.Bangladesh Bank
5.Institute of Chartered Accountants of
Bangladesh
Advice from Auditor for the Company No Specific Advice
The Adverse opinion No adverse opinion because firms gives
company’s financial statement an unqualified.
Bank Asia Limited

Particular Comment
Title of Audit Independent Auditor’s Report to the
Shareholders of Bank Asia Limited Report on
the Audit of the Financial Statements
Name of Audit Company Hoda Vasi Chowdhury & Co

Name of Auditor Hoda vasi Chowdhury
Repetition Company Audit this company 2nd time
2. IT systems and controls.
Internal Control
4. Report on other Legal and Regulatory
Requirements.
of the Company.

conclusion.

Standards(IFRSs)
Code)
Commission
4.Bangladesh Bank
Bangladesh
Bank Asia Limited
Accounting practice of year 2018 and 2019
Nature of Particular Following Standard in Report Comment
Measurement of provision for IFRS 9 “Financial To follow the requirement of
leases, loans and advances Bangladesh, bank some
(financial assets measured at
Instruments”
financial change occurred on
amortized cost) incremental provision for
leases, loans and advances.
Valuation of Investments in IFRS 9 "Financial Loss occurred in this section

quoted and unquoted shares and valuation follow FID
Instruments”
circular August 2002
Presentation of IAS 7 "Statement of 1. Not fully aligned

cash and cash Cash Flows" with the respect of
equivalent
IAS and follow the
Bangladesh Bank
2. Financial
Statements for 2019
have been prepared
as per guideline
(DFIM
Circular 2009) of
Bangladesh Bank.
Measurement of deferred tax IAS 12 "Income 1. Not Recognized BDT
asset Tax" 98.37 million
temporary as circular
of BB.
2. Company did not
consider any
deductible temporary
difference against the
provision for leases,
loans and advances
Presentation and disclosure IAS 1 "Presentation of 1. Intangible assets are

of Financial Statements and Financial Statements" listed with fixed
Financial Instruments
assets.
2. Comprehensive and
other comprehensive
income are not
including in Single
Comprehensive
income statement.
3. Presentation of f I n
an n c I an l
statements are not
fully aligned with all
requirements of IAS.
Preparation of “Statement of IAS 7 "Statement of Follow the guide line of

Cash Flows Cash Flows" Bangladesh Bank and this is
the mixture of direct and
indirect method
Impairment of Margin Loan IFRS 9 “Financial Take principal portion of

(Loans and receivables) Instruments” margin loan shall be kept at
20%
Complete set of financial IAS 1 "Presentation of According to the Bangladesh
statements Financial Statements" Bank complete set of
financial statements are: I)
balance sheet, ii) profit and
loss account, iii) statement
of cash flows, iv) statement
of changes in equity,
v) Statement of liquidity, vi)

notes, comprising significant
accounting policies and other
explanatory information.
Followed by the company.
Accounting Practice Financial Analysis between year 2018 and 2019:
Ratio 2018 2019
Debt equity ratio (Times) 4.00% 4.20%
Average effective tax rate 16.40% 14.4%

(%)
Financial expenses 15.5% 14.30%

coverage ratio (Times)
Return on total assets (%) 22.20% 24.00%
Return on shareholders’ 16.35% 19.28%

equity (%)
Earnings per share 7.30 8.99
Price earnings ratio (Times 18.12% 20.04%

ACME Laboratories Ltd
Analysis of audit report 2019
Particular Comment
Title of Audit Independent Auditor’s Report
To the Shareholders of IDLC Investments
Limited
Report on the Audit of the Financial Statements
Name of Audit Company Ms. Fouzia Haque, Co
Name of Auditor Ms. Fouzia Haque, FCA.

year 2018

Internal Control
4.Internal Management System
Auditor’s Opinion Present fairly, in all material of the financial
position of the Company.

conclusion.

Standards(IFRSs)
2. Bangladesh Bank
Code)
Commission
4.Bangladesh Bank
Bangladesh

ACME Laboratories Limited

Particular Comment
Title of Audit Independent Auditor’s Report
To the Shareholders of acme laboratories
Limited
Report on the Audit of the Financial Statements
Name of Audit Company . Ms. Fouzia Haque, co.
Name of Auditor Ms. Fouzia Haque, FCA.
Repetition Company audit 2nd time

Internal Control
4.Internal Management System
Auditor’s Opinion Present fairly, in all material of the financial
position of the Company.

conclusion.

Standards(IFRSs)
2. Bangladesh Bank

Code)
Commission
4.Bangladesh Bank
Bangladesh

Acme laboratories Limited
leases, loans and advances Bangladesh, bank some
Instruments”
(financial assets measured at financial change occurred on
amortized cost) incremental provision for
leases, loans and advances.

Instruments”
Presentation of cash and cash IAS 7 "Statement of Financial Statements for 2019
equivalent Cash Flows" have been prepared as per
guideline (DFIM Circular
2009) of Bangladesh Bank.
Measurement of deferred tax IAS 12 "Income Company did not consider
asset Tax" any deductible temporary
difference against the
provision for leases, loans
and advances
Presentation and disclosure IAS 1 "Presentation 3. Intangible assets are

of Financial Statements of Financial listed with fixed
and Financial Instruments Statements"
assets.
other
comprehensive
income are not
including in Single
Comprehensive income
statement.
Preparation of IAS 7 "Statement of Cash Follow the guide line of
Bangladesh Bank and this is
“Statement of Cash Flows” Flows"
indirect method

20%
loss account, iii) statement of
cash flows, iv) statement of
changes in equity,
v) Statement of liquidity, vi)
notes, comprising significant
accounting policies and other
explanatory information.
Ratio 2018 2019
Debt equity ratio (Times) 7.00 7.12
Average effective tax rate 30.58 31.86

(%)
Financial expenses coverage 1.45 1.30
ratio (Times)
Return on total assets (%) 2.12 2.30
Return on shareholders’ 16.55 15.23

equity
(%)
Price earnings ratio (Times 12.11 10.94
Operating Profit as 4.53 6.10

percentage
(%) of working fund
Internal audit: Internal audit is an independent division of the company, activities of which
is performed by a team of highly skilled and experienced professionals. The department directly
reports to the Board of Directors through audit committee. It helps our organization to achieve its
objectives by bringing a systematic disciplined approach to evaluate and improve the
effectiveness of risk management, internal control, and good governance.
AL-HAJ TEXTILE MILLS LIMITED
Particular Comment
Title of Audit Auditors’ Report and Audited Financial
Statements of Al-haj textile mills limited
its Subsidiaries
Name of Audit Company Ahmed Zakir & CO

Name of Auditor Sultan Ahmed, FCA
year 2018
Date of Audit 18 March 2020

2.Management Requirement
3. Going concern investigation.
of the Company. But have a note of unqualified
opinion paragraph.

conclusion.

Standards(IFRSs)
2. Securities and Exchange Rules,1987
3.Companies Act,1994
Code)
Commission
4.Bangladesh Bank
Bangladesh
Advice from Auditor for the Company 1. Tested the credit appraisal, loan
disbursement procedures, monitoring
and provisioning process.
2. Reviewed the adequacy of the
companies general and specific
provisions.
The Adverse opinion Unqualified opinion. But Auditor found

provision shortfall BDT 2,524,785,812

Particular Comment
Title of Audit Auditors’ Report and Audited Financial
Statements offal-haj textile milsLimited
Name of Audit Company Ahmed Zakir & CO

Name of Auditor Ahmed Zakir
Repetition Company Audit this company 2nd time
Date of Audit 23 June 2019
2.Management Requirement
3. Going concern investigation.
of the Company.

conclusion.

Standards(IFRSs)
2. Securities and Exchange Rules,1987
3.Companies Act,1994
Code)
Commission
4.Bangladesh Bank
Bangladesh
Advice from Auditor for the Company 1. Tested the credit appraisal, loan
disbursement procedures, monitoring
and provisioning process.
2. Reviewed the adequacy of the companies
general and specific provisions.
The Adverse opinion Unqualified opinion. But Auditor found

provision shortfall BDT 1,500,380,300
Bangladesh, bank some
leases, loans and advances Instruments”
financial change occurred on
(financial assets measured at incremental provision for
Amortized cost) leases, loans and advances.

Instruments”
Presentation of cash and cash IAS 7 "Statement of 3. Not fully aligned

equivalent Cash Flows" with the respect of
IAS and follow the
Bangladesh Bank
4. Financial
Statements for 2019
have been prepared
as per
guideline(DFIM
Circular 2009) of
Bangladesh Bank.
Measurement of deferred tax IAS 12 "Income Tax" 3. Not Recognized BDT
asset 98.37 million
temporary as circular
of BB.
4. Company did not
consider any
deductible temporary
difference
against the provision for
leases, loans and advances
Presentation and disclosure IAS 1 "Presentation of 5. Intangible assets are

of Financial Statements and Financial Statements" listed with fixed
Financial Instruments assets.
other comprehensive
income are not
including in Single
Comprehensive
income statement. 3.
Presentation of
financial statements
are not fully aligned
with all requirements
of IAS.
Preparation of IAS 7 "Statement of Cash Follow the guide line of

Bangladesh Bank and this is
“Statement of Cash Flows” Flows"
indirect method

20%
loss account, iii) statement
of cash flows,
iv) statement of changes

in equity,
v) Statement of
liquidity, VI) notes,
comprising significant
accounting policies and
other explanatory
information.

Ratio 2018 2019
Debt equity ratio (Times) 1.00% 1.20%
Average effective tax rate 6.40% 10.4%
(%)
Financial expenses 5.5% 4.30%
coverage ratio (Times)
Return on total assets (%) 13.20% 14.00%

Return on shareholders’ 21.00% 17.29%
equity (%)

Price earnings ratio (Times 8.12% 12.41%
CONCLUSION: Accounting practice of this three company were similar and they
followed IFRS, IAS and Bangladesh Bank. So, they were quite similar. And they were fully
follow Bangladesh Bank instructions and sometimes they follow some problem which they
noted on their notes and tried to disclose everything that related to the Financial Statement.
Company bank Asia limited, acme laboratories limited, al-haj textile mills limited was
regularly audited their Financial Statement. The audit their report from different audit firm.
But year 2018 and 2019 they audit their firm respectively same firm not change. Audit fee
is very high in company ACME and low in BANK ASIA. Three company got unqualified
opinion. But AL-HAJ TEXTILE has some problem in their reporting that noted three points
in audit report and same thing happened two years but the amount of account decrease. So,
audit firm gave them some advice to flow.

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JAHANGIRNAGAR UNIVERSITY

Course Title: Corporate Auditing

Date of Submission: 19th, March 2021

1 BANK ASIA LIMITED

2ACME LABOROTORIES LIMITED

The key criteria of an assurance engagement can be seen in an audit as follows:

Materiality: An expression of the relative significance or importance of a particular matter in the

Two types of assurance –

Four types of Financial Report-

4. Owner’s equity Financial Practice:

• We then use relationships among financial statement accounts in pro forma

BANK ASIA LIMITED

Name of Audit Company Hoda Vasi Chowdhury & Co

Date of Audit 23 February 2020

Standards followed by Company 1.International Financial Reporting

Bank Asia Limited

Name of Audit Company Hoda Vasi Chowdhury & Co

Assurance Auditor did not express any form of assurance

Standards followed by Company 1.International Financial Reporting

Valuation of Investments in IFRS 9 "Financial Loss occurred in this section

Presentation of IAS 7 "Statement of 1. Not fully aligned

Presentation and disclosure IAS 1 "Presentation of 1. Intangible assets are

Preparation of “Statement of IAS 7 "Statement of Follow the guide line of

Impairment of Margin Loan IFRS 9 “Financial Take principal portion of

v) Statement of liquidity, vi)

Ratio 2018 2019

Debt equity ratio (Times) 4.00% 4.20%

Average effective tax rate 16.40% 14.4%

Financial expenses 15.5% 14.30%

Return on total assets (%) 22.20% 24.00%

Return on shareholders’ 16.35% 19.28%

Earnings per share 7.30 8.99

Price earnings ratio (Times 18.12% 20.04%

Name of Auditor Ms. Fouzia Haque, FCA.

Date of Audit 17 February 2020

Assurance Auditor did not express any form of assurance

Standards followed by Company 1.International Financial Reporting

The Adverse opinion No adverse opinion because firms gives

ACME Laboratories Limited

Repetition Company audit 2nd time

Assurance Auditor did not express any form of assurance

Standards followed by Company 1.International Financial Reporting

Standards followed by Auditor 1.International Standards on Auditing (ISAs)

The Adverse opinion No adverse opinion because firms gives

Valuation of Investments in IFRS 9 "Financial Loss occurred in this section

Presentation and disclosure IAS 1 "Presentation 3. Intangible assets are

Impairment of Margin Loan IFRS 9 “Financial Take principal portion of

Debt equity ratio (Times) 7.00 7.12

Average effective tax rate 30.58 31.86

Return on total assets (%) 2.12 2.30

Return on shareholders’ 16.55 15.23

Earnings per share 5.76 5.92

Price earnings ratio (Times 12.11 10.94

Operating Profit as 4.53 6.10

Name of Audit Company Ahmed Zakir & CO

Date of Audit 18 March 2020

Assurance Auditor did not express any form of assurance

Standards followed by Company 1.International Financial Reporting

The Adverse opinion Unqualified opinion. But Auditor found