89026930 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 “Cutting through complexity” 1 | P a g e


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.

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

“Cutting through complexity” 2 | P a g e


16 2.8.3 Energy and Power 18

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

233.2 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

Introduction


Chapter l 1 l


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.

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.



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

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.



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


Chapter l 2 l overview of Rahman Rahman Huq


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.

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

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:


http://www.Rahman-rahman-huq.com/


• 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 :

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.


Partner

Senior Manager

Manager


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 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.


Assistant Manager

Qualified (Serving Article)Tax Specialist

IRM specialist

Senior auditor

Junior auditor


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:

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.)

• 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.“Cutting through complexity” 14 | P a g e


• 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.

• 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.)

• 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

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:

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.


Chapter l 3 l Auditing of cash incentive at HSBC 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

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.

• 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. 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:

• 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.

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.

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).

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.


Documents

89026930 Internship Nahin s Report