Letter of Transmittal: Auditing of An Ngo: A Case Study On Aware Project Funded by Actionaid Bangladesh

Auditing of an NGO: A Case Study on AWARE Project Funded by ActionAid Bangladesh
LETTER OF TRANSMITTAL
3rd May, 2012
Nausheen Rahman
Associate Professor
Department of Finance
Faculty of Business Studies
University of Dhaka
Subject: Submission of Internship Report.
Dear Sir,
I have the honor to submit my internship report on “Auditing of an Ngo: A Case Study on
Aware Project Funded by Actionaid Bangladesh”. It is a great opportunity for me to be
acquainted with the audit procedure undertaken by SSAC Chartered Accountants, a leading
CA firm and independent member of Urbach Hacker Young International Limited, the 23rd
largest accounting practitioner body in the world which can enhance a person’s knowledge
about the concurrent practice of auditing regarding the NGO’s.
The six weeks’ internship program has contributed greatly in gathering my knowledge as it
has provided me with wide exposure of the professional environment. I tried to incorporate
the practical knowledge whenever I found it necessary in this report. This report is prepared
under your kind supervision and I respectfully acknowledge your sincere guidance and
assistance.
I believe the analysis done here will help me in future to know how diversified situations may
arise in professional practices and how they have to be dealt with along with due care and
professional skepticism. I will be very glad to provide you with further explanations or
clarifications in this regard that you may feel necessary.
Thank you very much for your kind supervision and great co-operation.
Sincerely yours,
Muhammad Firoz Mahmud

Roll: 14-089
BBA 14th Batch, Sec: A
Department of Finance
Faculty of Business Studies
University of Dhaka
Advancing Women to Activate on Right and Empowerment Project

ACKNOWLEDGEMENT
First of all, I would like to thank the Almighty Allah for blessing me with the strength, aptitude
and patience for successfully completing my internship and this report.
I would like to thank my faculty advisor Nausheen Rahman for giving me the opportunity to
work with him during my period of internship. I have been able to compile and complete this
report in a comprehensive manner due to the guidance, support and counseling that he has
provided me with during this period. I have tried my best to implement his constructive
suggestions while doing my report.
I would also like to take this opportunity to acknowledge the help provided to me by some
personals of SSAC, Chartered Accountants. My sincere gratitude goes to Mr. Snehasish Barua,
FCA, Partner; Koushik Ahmed, Audit Supervisor; and Mahamuda Khatun, Team Supervisor for
giving me time from their busy schedule, providing me with information that was required to
complete the report and for guiding me properly throughout the period of my internship. I
would also like to thank all the employees and students of SSAC, Chartered Accountants who
has supported me and co-operated with me during my internship period.
Finally, my sincere thanks go to each and everyone who has helped and supported me
significantly in different stages during the period of my internship.

List of Acronyms
Acronym Full Form

NGO Non Governmental Organization
CA Chartered Accountant
VAT Value Added Tax
ICAB The Institute of Chartered Accountants of Bangladesh
NGOAB Non-Government Organization Affairs Bureau Bangladesh
ISA International Standards on Auditing
BSA Bangladesh Standards on Auditing

GAAP Generally Accepted Accounting Principles
SRA Specific Risk Analysis
ICQ Internal control questionnaire
ToR Terms of Reference
TA Travel Allowance
PM Program Manager
TDS Tax Deducted at Source
PR Principal Recipient
FIFO First In First Out

FD- 4 Foreign Donation- 4
Executive Summery

Audit procedure is mainly a step by step approach. As this is a case study on SKS Foundation;
a partner NGO of ActionAid Bangladesh on a particular project, it will cover a little area of
NGO auditing. But the snapshot can be obtained from this study. The selected NGO has wide
range of operation. It has its operation beyond the boarder. The selected portion that has
been audited is an audit on “ Advancing Women to Activate on Right and Empowerment Project” ,
a project taken by the government of Bangladesh and implemented through the SKS
Foundation; a partner NGO of ActionAid Bangladesh.
As an audit firm SSAC has a complete set of procedures to be followed at the time of audit
performed. From engagement to report submission the process is followed with reasonable
and professional care and maintaining all rules and regulation and standards.
In this report the main focus was on the implementation procedure of audit and finding out
the features that is taken to audit the NGOs. NGO auditing is not like general company
auditing. Huge amount of foreign donations are involved here. For that reason the
verification of the authenticity of foreign donation is mandatory in case of NGO auditing. The
35 conditions imposed by NGOAB are considered a guideline in this regard.
The auditing is done to find out irregularities regarding stock management, fixed asset
management, proper implication of Bangladesh Accounting standards, VAT Act, income tax
ordinance, labor law and other included in internal control system.
The opinion provided by the auditor is obviously beneficial for the NGOs as those can
improve the quality of the respective NGOs performance. In the audit a follow up of the
previous year’s audit is verified whether that is solved or not. If not, recommendation on
taking proper action is communicated to the management.
But the effort will best be obtained when the transparency of financial reporting will be
ensured through a system where the audit procedure will be more flexible and easy to
understand. Because it will ensure greater accessibility of people to disclose and evaluate as
well as understand and implement the auditing and accounting knowledge.
The auditing profession has contributed and will be contributing a greater extent in ensuring
transparency and efficiency of internal control system of various sector of Bangladesh. The
achievement of the auditors will be then when the maximum people of the country will be
aware about their rights and then proper transparency will come conquering all obstacles.

TABLE OF CONTENTS
Chapter One: Preamble
1.1 Introduction

Bangladesh has a history of rich sociological bondage. This social bondage is a basic cultural
attributes of Bangladeshi society. With the span of time the social bondage and other social
developmental and other activities is now losing the appeal and effectively. But the state and
governmental system is not as adequate to fulfill the requirement of the people of our
country. The new capitalist culture is now expanding the income gap between the rich and
poor. Undesirable Social and Cultural hazards are now growing in numbers. Government is
elected by the people but due to some sort of systematic hazards and cultural deterioration
all governmental activities do not fully benefit the people of the country. NGO’s are
welcomed here to replace this type of responsibilities which would have to be done by the
Government.
Non-Governmental Organizations (NGO) is not financed by the Government. NGO’s mainly

receive fund from foreign countries and they expend this on different projects aiming to
maintain social awareness covering the site of education, sanitation and health. To ensure
proper transparency and accountability generally auditing is done on those NGOs. Because
there are huge possibilities of misusing the fund received from the foreign donor.
Potential threats and prospects of NGO auditing is now a very important aspect to raise
awareness of the stakeholders of the NGO’s and making an evaluation to improve the quality
of auditing. This NGO receive a huge amount of Donations which are transmitted to Sub-
recipients NGOs and with prescribed instruction and Budgets. But due to some difficulties
and Problems the proper clarification of the audit made cannot be achieved. Due to the
weakness in internal control system and other associated external problems the proper
utilization of fund money sometimes fall apart.
To minimize the risk of that misuse the roll of auditors is important. What should be those
roles in assessing the risk, minimizing those risks, strengthening the internal control system
and making adequate contribution to the development of the country is an important aspect
of this internship report proposal. SSAC as a leading chartered accountancy firm has a wide
practical exposure on the NGO auditing. In this study those information are incorporated
which are best conform the procedure of Auditing of a NGOs by a CA firm.
1.2 Objectives of the study

Generally in our academic life we get theoretical knowledge about different aspects. But now
a day, in the job market there is no substitute of work experience. Getting meaningful work
experience in one major field of study must to be given a high priority. After getting
theoretical knowledge from university, it is all about the application of that knowledge in real
world situations. It has immense importance to establish relationship between theory and
practices in real world situation. Practically the auditing of NGO is deeply characterized by
learning the current accounting and auditing standards, role of regulatory authorities,
activities of different financial and non-financial institutions from home and abroad and
government itself. The objectives of this report are:
 Gaining practical knowledge and experience on how a chartered accountancy firm

(SSAC) performs an audit and a how audit work.
 Special Procedures taken by the Firm (SSAC) to audit NGOs and their sub recipients.
 Understanding the field level problems related to the implementation of the
prescribed procedure from the part of both Auditor and client.
 Getting an exposure of the problems in internal control system of different
organizations and plausible recommendations.
 Understanding how NGO’s are being benefited by the supervision of the audit firm
with adequate exposure on future prospects.
1.3 Methodology of collecting Information
The hypothesis which I will develop will be through empirical testing research based on the
collection of quantitative data taken from financial statements, balance sheets of Different
Sub-Recipients and the selected NGO itself. I will mainly focus on the qualitative and
quantitative aspect of my audit. Because for most of the cases, auditing is not only to focus
on quantitative aspects of information, it is focusing on qualitative aspects of information
also.
In order to prepare the assigned project paper I have collected necessary information from
two types of source as follows:
1) Primary sources information.
2) Secondary sources information.

Primary sources information

1. I have collected primary information by working with NGO audit teams.
2. Discussing with engagement partner, audit manager, audit stuff and articled students.
Secondary sources information

1. I have also collected secondary information like annual audit report, management
audit report, accounting system, Policies, Circulation & audit working papers.
2. The information was obtained from various corresponding files of the firm.
1.4 Limitation of the study:
During my study, I have confronted some challenges. I have tried my best to overcome those
challenges. Even then, I have some limitations. The study is conducted with an objective to
make a thorough study of external audit procedure. The challenges I mentioned before can be
termed as the limitation of my study. Those limitations are as follows:
a) As the internship was the first practical experience, it was not possible for me to
know all and everything of audit program.
b) Also it became difficult for me to be efficient in handling the unique problems
while auditing the NGO.
Chapter Two: Literature Review

NGO means non government organization (Peter Willetts.2011). NGOs are not self-serving in
aims and related values. Their aim is to act in the public arena at large, on concerns and
issues related to the well being of people, specific groups of people or society as a whole.
They are not pursuing the commercial or professional interests of their members. It is said in
The Commission and Non-Governmental Organizations: building a stronger partnership.
Non-governmental development organizations are potentially critical catalysts for unlocking

the energies and resources of the poor and voiceless, for building pluralistic and democratic
societies. To be effective in this role, they must formulate and implement programs that
strategically promote and support long-term changes that have large-scale development
multiplier effects. All too often the early successes of NGOs are difficult to sustain let alone
replicate on a larger scale, because of problems in organization and management. (Brown,
David. 1988. "Organizational Barriers to NGO Strategic Action." Institute for development
research, Boston, 10 pp.)
"Auditing is the accumulation and evaluation of evidence about information to determine

and report on the degree of correspondence between the information and established
criteria. Auditing should be done by a competent, independent person." (Loebbecke.1986)
In other words Auditing is subject to expectations and demands which are, justifiably or
otherwise, often disappointed (Kealey, Lee & Stein 2007).
According to the Companies Act 1994, accounts of companies registered under this act must
be audited by chartered accountants within the regulations of the Bangladesh Chartered
Accountants Order 1973. Similarly, all books of accounts maintained by a non-government
organization receiving foreign donations shall be audited by a chartered accountant as
defined in the same order (http://www.banglapedia.org/httpdocs/HT/A_0361.HTM)
NGO Auditing is being characterized as a tool to find out the possible threats and risk
associated with the operation of the NGO. To ensure accountability in NGO sector previously
studies are done. With regard to the evolution of NGO accountability practices and their
implications on NGOs, Songco (2007) finds that the effort of creating a more proactive
environment for NGO accountability is to dissect the different levels at which accountability
needs to be promoted, the methods that can be used by NGOs operating in these different
levels and incentives and disincentives that can be instituted in this regard. Lloyd R. and L.

delas Casas, (2005) investigate NGO self-regulation and its impact on enforcing and balancing
accountability.
Srinivas (2005) claims that NGO accountability covers issues such as organizational
management, project implementation, financial management and information disclosure. It
is related to issues such as answerability, responsibility, liability, dependability,
conscientiousness, reliability, trustworthiness, legitimacy, and transparency. There has been
a rising visibility and stakes of NGOs' work. A crisis of legitimacy in many sectors, especially
business and government has amplified the need for NGOs as a 'counterbalance'.
With regard to the evolution of NGO accountability practices and their implications on NGOs,
Songco (2007) finds that the effort of creating a more proactive environment for NGO
accountability is to dissect the different levels at which accountability needs to be promoted,
the methods that can be used by NGOs operating in these different levels and incentives and
disincentives that can be instituted in this regard.
Ebrahim (2003) who recognizes five broad mechanisms for NGOs accountability in practice:
reports and disclosure statements, performance assessments and evaluations, participation,
self-regulation, and social audits. Ebrahim analyzed these five mechanisms along three
dimensions of accountability: upward-downward, internal-external, and functional-strategic;
and observed that accountability in practice has emphasized upward and external
accountability to donors while downward and internal mechanisms remain comparatively
underdeveloped.
Moreover, NGOs and fund donors have focused primarily on short term 'functional'
accountability responses at the expense of longer-term 'strategic' processes necessary for
lasting social and political change.
Chapter Three: Profile of SSAC
SSAC was established in 1993 under the name of Syful Islam & Co, Chartered Accountants.
The firm became Syful Shamsul Alam & Co, in February 2003.The partners are:

PARTNERS
Md. Syful Islam, FCA, FCMA
A. K. M. Shamsul Alam, FCA
Md. Raghib Ahsan, FCA
Nasim Anwar, FCA
Md. Abdul Majid, FCA
Snehasish Barua, FCA
Mohammad Saif Uddin, FCA
Md. Liaquat Hossain Chowdhury, FCA, FCMA
3.1 The profile of SSAC at a glance:
Syful Shamsul Alam & Co (SSAC)

Name of the audit firm Chartered Accountants
Date of establishment 06 March, 1993

Paramount Heights (Level-6)
65/2/1 Purana Paltan
Dhaka-1000. Bangladesh
Corporate office Tel: +88(02)9555915, +88(02)9515431,
+88(02)9515491
Fax: +88(02)9560332
Dilkusha C/A (6th Floor)

Dhaka office Dhaka-1000, Bangladesh
Tel: +88(02)9572217
Bashar squrae (M. Court), 5th Floor
108, Agrabad, Chittagong.
Chittagong office
Phone: +8801819380455
3.2 Manpower Strength
Sl. Personnel Number

01. Partners 08
02. Professional Staff:
- Senior Director-Taxation 01
- Director-Audit & Consultancy (Chartered Accountant) 01
- Deputy Manager-Taxation & Corporate Affairs 01
- Deputy Manager-Audit & Consultancy 06
- Senior Assistant Manager-Audit & Consultancy 04

Sl. Personnel Number

- Senior Assistant Manager-Taxation & Corporate Affairs 02
- Assistant Manager-Audit & Consultancy 03
- Assistant Manager-Taxation & Corporate Affairs 03
- Executive and Junior Executive-Audit, Consultancy & Taxation 07
03. Articled Students 90
04. Interns 15
05. Supporting Staff 20
Total 163
3.3 Role of the Personnel:
i. Partners:
The role of a partner is to get new clients and also sometimes the clients approach the
partners themselves. The partners also make sure the existing clients are provided with the
best possible service. Partners guide their employees to prepare a proposal which is to be
submitted to the client depending on what kind of service the client requires.
ii. Audit manager:
An audit manager is a Chartered Accountant who assists the partners in various ways. He/
She review reports before signing by the engagement partner.
iii. Supervisor:
A supervisor may or may not be a Chartered Accountant. He has to complete the course and
having some years experience in the field of accountancy therefore he designated as the
Audit Supervisor of the firm. Audit manager briefs the audit supervisor on where and when
an audit has to be performed and how the job is to be carried out.
iv. Senior student:

An audit senior has some years of experience in the accountancy field therefore he has been
designated as the audit Senior of the firm. Audit senior is briefed by the audit manager and
supervisor about where and when an audit has to be performed and how the job is to be
carried out.
v. Semi-Senior Student:
A semi-senior student has to complete at least one year of article ship in the firm. Every time
he is liable to his assigned senior/s.
vi. Junior Student:

Junior Students are the fresher who have just joined as an articled to the firm.
3.4 Non Professional Staff:
The numbers of non professional staffs involved with the firm are as follows:

 General Manager (GM)

 Manager
 Accountant
 IT Specialist
 Computer Operator
 Photocopy Machine Operator
 Receptionist.
3.5 Services Provided By the Firm
SSAC provides a wide range of high quality services of diversified nature to its clients in the
private and public sectors in Bangladesh. It also renders services to international development
agencies and expatriate consultants those are associated with various projects in Bangladesh.
(a) Services offered cover the following areas

 Statutory audit.
 Internal audit.
 Special audit.
 Management audit.
 Performance audit.
 Financial review.
 Accountancy.
 Taxation – individuals, companies, banks, branch offices, liaison offices.
 Accountancy and management training.
 Company formation and secretarial work.
 Investigation of frauds and irregularities.
 Setting up branch office and setting up liaison office.
 Companies’ registration with Board of Investment, Ministry of Industries etc.
 Obtaining trade license, factory license, Import Registration Certificate etc.
 Providing services regarding setting up of office, drafting rent/lease agreement,
recruitments of staff etc.
 Services relating to fixed assets management, inventory management etc.
 Services with regard to share issue, right issue, initial public offering, prospectus.
 Outsourcing of accounting services, payroll, internal audit etc.
 Tax planning and tax management of expatriates.
 Business plan developments.
 Feasibility study of projects.
 Management consultation/development.
 Privatization consultancy.
 Company acquisition, merger, spin off, amalgamation etc.
 Liquidation and winding up of companies.
 Organizational consulting services.

 Share/business/asset valuation.
 Other services as per needs of the clients.
(b) Following are a few of the major category of clients receiving SSAC’s services
Manufacturing and Energy and Non-profit organizations

Trading Telecommunications
 NGOs
 Apparel  Oil and gas
 Charitable
 Engineering  Power and power
organization
 Cement generation
 Universities
 Fabricated products  Telecommunication
 Pharmaceuticals  Mining.
 Garments / textiles
 Food products
Commercial services Finance
 Courier and cargo  Banking

services  Investment
 Hospitals  Insurance
 Airlines  Capital Market.
 Hotels
3.6 Association and Membership
(a) Affiliation with International Auditing/Accounting Firm
SSAC is an independent member of Urbach Hacker Young international Limited, 23rd

largest network in the world with 96 independent member firms in 78 countries.
Chapter Four: Audit Procedures for NGOs followed by SSAC
4.1 Engagement Procedures

Before discussing the audit procedures followed by SSAC, I’ve tried to focus on the
engagement procedures through which SSAC is engaged/ recruited by the NGO to perform
the audit. SSAC faces three kinds of situations in engagement process:
 Engagement with new NGO.

 Engagement with existing NGO.
 Directly appointed by the NGO.
Before starting the audit work, some letters are exchanged between SSAC and NGOs.
4.1.1 In case of engagement with new NGO:
4 (four) letters are exchanged between SSAC and NGO including acceptance letter of
appointment at the time of involving with the new NGO. Following stages are followed by
both SSAC and NGO:
Stage-1: NGO requires for technical and financial proposal from the SSAC
NGO generally gives circular with the newspaper or directly wants proposal for audit from
the audit firm. In case of direct offer they request to the audit firm to submit a quotation for
the cost of conducting audit of the NGO. The NGO firm mentions here the key areas of the
audit in the form of attachment.
Stage-2: The technical and financial proposal is sent by SSAC to the NGO
After reviewing the NGO letter or paper’s circular, audit firm drafts a proposal letter to the
NGO. The proposal letter contains technical and financial proposal for carrying out the
subject of audit. The firm also mentions that as it is an estimate, the cost may vary with
variation in number of mandates estimated to be utilized for the job.
Stage-3: Acceptance by the NGO on the basis of proposal of SSAC– A letter of contract
After receiving proposal letters from various audit firms, the NGO then selects the one which
is favorable to them, and it appoints the audit firm for audit purpose. From the technical and
financial proposal of the SSAC the NGO understands the nature of the audit (such as
independent, external) to assess the organization’s internal control system in administering
the audited matter.
Stage-4: A letter is sent by SSAC to the NGO confirming to work with the NGO –
Confirmation Letter

After receiving the acceptance letter from the NGO, SSAC provides confirmation letter
describing the firm’s willingness to work with the NGO.
4.1.2 In case of engagement with existing NGO
Three letters are exchanged between the SSAC and NGO:
1. Willingness letter for reappointment: In this letter SSAC wants to audit this
year. It can request to increase audit fee or change some other conditions.
2. NGO sends appointment letter.
3. SSAC accept this appointment.
4.1.3 In case of directly appointed by the NGO
If the NGO is interested to work with SSAC, then it directly sends an appointment letter to the
firm which includes all terms and conditions. If all terms and conditions are favorable to the
SSAC then it accepts the appointment and sends a letter to the NGO as an auditor.
4.2 Audit Procedures Followed By SSAC
The primary goal of SSAC at the time of involving in any audit engagement is to provide the
opinion on Financial Statements in accordance with Bangladesh Standards on Auditing (BSA)
as well as International Standards on Auditing (ISA). SSAC also seek to provide auditing and
management consultancy services that are innovative, efficient and most importantly
responsive to the NGO’s needs.
There are seven steps involved in the procedures that come one after another. Steps are as
follows:
 Identity overall goals

 Gather & evaluate initial information
 Assess general risks
 Assess account-specific risks
 Develop effective and efficient audit plan/work program
 Conduct audit testing
 Evaluate and communicate audit results
4.2.1 Identify Firm’s Overall Goals

The goal of SSAC in conducting an audit is to express an opinion as to whether the financial
statements are prepared and presented fairly in accordance with Generally Accepted
Accounting Principles (GAAP). The Firm’s policies on Generally Accepted Accounting
Principles are contained in Accounting Standards. The audit team considers these standards
in formulating an opinion. In forming an opinion, the audit team also addresses
responsibilities for:
 Errors
 Irregularities and other matters
 Efficiency
 NGO value
4.2.1.1 Errors
Errors are unintentional misstatements or omissions of accounts of disclosures in financial

statements and may involve:
a) Mistakes in gathering or processing accounting data from which financial statements

are prepared.
b) Incorrect accounting estimates arising from oversight or misinterpretation of facts
and;
c) Mistakes in the application of accounting principles relating to amount, classification,
manner of presentation or disclosure.
The audit team is required to design the audit to provide reasonable assurance of detection of
material errors.
4.2.1.2 Irregularities and other matters
Irregularities are intentional misstatements or omission of amounts or disclosures in the

financial statements, including fraudulent financial reporting and misappropriation of assets.
So there is always a risk that material irregularities may occur and not be detected. This risk is
increased by the possibility of management’s override of internal controls, collusion, forgery,
or unrecorded transactions. So the audit team is required to design the audit to provide
reasonable assurance of detection of material misstatements regarding irregularities.
4.2.1.3 Efficiency
The audit team should design audit procedures that accomplish the overall goals discussed
above in the most efficient manner. Performing an efficient audit involves:

 Performing front-end risk assessment and planning with adequate partner and
manager involvement.
 Designing the combination of audit procedures based on the risk assessment that
will efficiently reduce the risk of undetected material misstatements to an
appropriately low level.
 Assigning work to adequately trained and supervised persons with appropriate
experience and skill levels.
4.2.1.4 NGO value
It has long been a tradition of SSAC to provide enhanced value to NGOs as an integral part of
audits. This strategy has allowed SSAC to differentiate our approach from that of other firms.
Most NGOs and most of related personnel would agree that the achievement of SSAC
differentiate from other firms and communicate the value of SSAC audit by consistently
stressing the following:
 Sound working relationship

 Understanding NGO’s activities and funding.
4.2.2 Gather & Evaluate Initial Information
After involving with the NGO, SSAC first task is to collect and evaluate the relevant and
necessary information related to the NGO’s operation for the purpose of:
 Understanding the NGO’s activities and operation
 Considering the internal control structure
 Identifying NGO expectation
 Considering materiality.
4.2.2.1 Understand the operation of NGOs
Proper planning and designing of an audit is dependent on proper understanding of NGO’s

operation. So after appointing by a NGO, the members of an audit team use various sources
to gain an understanding of NGO operation.
4.2.2.2 Consider internal control structure

Every NGO has some kinds of accounting system by which transactions are processed, and
records of those transactions maintained. That 'system' should incorporate control features
and is normally referred to as the system of 'Internal Control'.
The existence of a reliable system of internal control can be a great help to the auditor,
because the objectives of the system should be:
a) Ensuring that the records are complete, accurate and properly authorized;
b) Detecting errors and fraud.
So, SSAC’s first task in relation to the NGO's system of internal control is to ascertain record
and evaluate it. Then properly using the knowledge of the NGO's system to plan audit tests to
be performed is necessary.
4.2.2.3 Identify NGO expectation
As external auditor, auditor should identify the NGO’s expectation and design and perform
the audit to meet the NGO expectation.
4.2.2.4 Consider materiality
Information is material if its omission or misstatement could influence the economic decisions
of users taken on the basis of the financial statements. Materiality depends on the size of the
item or error judged in the particular circumstances of its omission or misstatement.
In designing the audit plan, I’ve established an acceptable materiality level so as to detect
quantitatively material misstatements.
4.2.3 Assess General Risks
During audit planning and risk assessment, I’ve obtained initial audit evidence in order to:
1. Effectively assess the inherent risk of potential financial statement misstatements,

2. Identify indicators of possible going concern problems, and
3. Identify account specific risk and design an overall audit approach to provide
reasonable assurance of detecting material misstatements.
The assessment of risk is accomplished using a “top-down” approach. The audit team focuses
initially on high level information. The nature and extent of documentation will vary
significantly based on an entity’s size, complexity, ownership characteristics, and level of risk.

Key Factors
Significant background information and NGO, economic and industry conditions that provide
an indication of the level of risk for an engagement are mentioned in items 1-15 listed below:
1. Understanding NGO business: Can be obtained from various sources, e.g. annual report,
minutes, internal reports, previous year audit work papers, discussion with NGO;
2. Management’s style, outlook;
3. Significant current events and reporting issues;
4. Results of financial performance review;
5. Management control environment;
6. Accounting system – policy, procedure & manual;
7. Materiality consideration;
8. Limitations of the engagement, if any, e.g. documents lost, post dated appointment, no
inventory, no cash count was done;
9. Overall audit approach;
10. Coordination and timing.
4.2.4 Account-Specific Risk Analysis

Specific risk analysis (SRA) builds on information obtained during general risk assessment
(GRA) and is completed after consideration of the evaluation of the internal control system.
SRA is done to design the nature and extent of substantive tests on account level. SRA
includes three functions-
1. Assess account specific risks:
i.Identify accounts to be addressed

ii.Describe the potential risks/ frauds per GRA -Inherent risk
iii.Describe the potential risks as per SRA assessment -Inherent risk
iv. Determine whether the I/C for those accounts are adequate- Control
risk
v. Determine whether to perform test of control or not.
2. Assess the risk of potential fraud
3. Develop audit plan
i. Select substantive audit procedures- Detection risk
ii. Develop work programs
iii. Perform engagement administration
4.2.5 Development of Effective and Efficient Audit Plan/ Work Program

Work program is a list of procedures that are needed to be performed to conduct the audit.
The program may also contain the audit objectives for each area and should have sufficient
detail to serve as a set of instructions to the assistants involved in the audit, and as a means
to control the proper execution of the work.
In SSAC, I’ve used work programs for different types of account head. Work programs were
developed for different types of activities and for different types of account heads. Usually an
audit program contains
 NGO procedures and background information.

 Audit objectives.
 Audit procedures.
 Performance and results of work.
 Conclusions.
Work programs help the auditors to ensure the quality of the audit tasks as it provides
necessary guidelines about how to carry out their audit tasks and how to analyze all the
account heads in a proper way. So when a new student is registered as articled student in
SSAC, it is the responsibility of managers/supervisors to introduce him/her with different
types of work programs.
All procedures included in the work program must be completed and any revisions in the
program, made during testing, must be adequately explained and approved by the senior or
manager.
4.2.6 Conduct Audit Testing
After completing work program, the audit team conducts two types of tests which SSAC
mentioned in earlier discussion. Two tests are:
o Test of Controls
o Substantive Test
4.2.6.1 Test of Controls
Based on the GRA, SRA and evaluation of internal control system, SSAC decide whether to
perform test of control.

The audit team should test any internal controls upon which reliance is placed to reduce the
likelihood of misstatements in the financial statements and the reduced substantive test has
been decided.
For the effectiveness and efficiency of audit work, SSAC conduct test of control at least in the
following three major accounting areas which in turn will cover most of the account level
tests in any NGO.
Type of Test Account level test covered
1) Cash Receipts Test Cash, Bank, Sales, Revenue, Receivables.
Cash, Bank, Inventory, Purchase, Fixed

2) Cash Disbursement Test
Assets, Payables, Expenses.
3) Payroll Test Payroll expenses, cash, bank.
Control Outlines
Items included in the three tests of control forms can be modified to include additional items,
to delete some non- applicable items and also to customize the test for each and every
different type of NGO specific procedures. Following groups of Internal controls may be
considered while developing the forms for internal control tests.
 Authorization controls
 Transaction processing controls
 Substantiation and evaluation controls
 Physical safeguard controls
4.2.6.2 Substantive Tests
Substantive tests are procedures performed to detect misstatements in financial statement

balances. SSAC perform the following two types of Substantive Tests:
 Analytical procedures
 Detail Tests
4.2.6.2.1 Analytical Procedures

“Analytical procedures” means the analysis of significant ratios and trends including the
resulting investigation of fluctuations and relationships that are inconsistent with other
relevant information or deviate from predicted amounts. Analytical Procedures are the
testing of financial information by evaluating actual vs. expected relationships among
financial and non-financial data, e.g. utilities, rent, payroll. Analytical procedures may be used
as a substantive test of balances and for a final review of yearend financial statements.
Analytical procedures include the consideration of comparisons of the entity’s financial

information with, for example:
 Comparable information for prior periods.
 Anticipated results of the entity
 Similar industry information
SSAC generally apply analytical procedures at or near the end of the audit when forming an
overall conclusion as to whether the financial statements as a whole are consistent with the
auditor’s knowledge of the NGO operation.
4.2.6.2.2 Detail Tests
Detailed tests may include the following:

a) Confirmation of third parties- Bank, A/P, A/R
b) Observation of asset - Inventory count, FA, Cash Count, Payroll cheque distribution
c) Tests of reconciliation- bank reconciliation, inter-co reconciliation
d) Analysis of account
e) Vouching
f) Exception tests
g) Cut off tests
h) Inquire
i) Valuation tests
j) Reading of FS
k) Reading of minute of meeting of stockholder, directors and committee.
4.2.7 Evaluate and Communicate Audit Results
At the last stage of audit, the audit team communicates the result of the audit to the
management and the stakeholders of the NGO. The audit team issues two types of reports:
 External report which is commonly known as the “Auditor’s report”

 Internal report which is known as “Management Letter”.

SSAC therefore have three areas to deal with:
--- The unqualified audit report;

--- Qualifications in audit reports;
--- The management letter (also known as letter of weakness or letter of comment).
4.2.7.1 External Report/ Auditor’s report:

 Basic elements
The auditor’s report includes the following basic elements, ordinarily in the following layout:
a. Title;
b. Addressee;
c. Opening or introductory paragraph
i. Identification of the financial statements audited;
ii. A statement of the responsibility of the entity’s management and the
responsibility of the auditor;
d. Scope paragraph (describing the nature of an audit)
i. A reference to the BSA;

ii. A description of the work the auditor performed;
e. Opinion paragraph containing
i. A reference to the financial reporting framework used to prepare the financial

statements; and
ii. An expression of opinion on the financial statements;
f. Date of the report;
g. Auditor’s address; and
h. Auditor’s signature.
4.2.7.2 Internal Report/ Management letter
As a value added service to the NGO SSAC gives a Management Letter to its audit NGOs. The
main purpose of the letter of management is to draw the attention of management to areas
of weakness requiring rectification. It is also possible for the auditor to suggest areas where
economies or improved efficiency are possible. Such a letter is, of course, no substitute for a

qualification in the audit report. It will usually deal with matters not serious enough to justify
an audit qualification.
4.2.7.2.1 Contents:
Generally the following matters, arising out of the audit, will be included in a letter to
management:
a) weaknesses in the structure of accounting systems and internal controls;

b) deficiencies in the operation of accounting systems and internal controls;
c) unsuitable accounting policies and practices;
d) Non-compliance with accounting standards or legislation.
Points made in previous years' management letter should be reviewed. Where they have not
been dealt with effectively, the auditors should enquire why appropriate action has not been
taken. If the auditors consider the points still to be significant, they should include all these
points again in their current letter. In addition, recommendations made by internal audit
which have not been implemented by management, may need to be included.
4.2.7.2.2 Management response
The auditor should request a reply to all the points raised, indicating what action
management intends to take as a result of the comments made in the management letter. It
should be made clear in the report that the auditor expects at least an acknowledgement of
the letter or, where he considers it appropriate, the directors' discussion of the letter to be
recorded in the board minutes.
4.2.7.2.3 Basic elements of the management letter
The management letter includes the following basic elements, ordinarily in the following
layout:
a) Addressee;
b) Transmittal Letter;
c) Title;
d) Background Information
e) Scope of Work, e.g.
i. Compliance;
ii. Authorization;
iii. Accuracy;

iv. Monitoring;
v. Safeguarding
f) Findings: Each finding consists of four different sections, as under:
vi. Fact (What it is)
vii. Effect (What harm was caused by not complying with the criteria)
viii. Recommendation (That corrects the cause and the condition as applicable)
ix. Management response
g. Date of the report;
h. Auditor’s address; and
i. Auditor’s signature.
4.3 Audit Work - A Chronological Sequence
Although all audits will have precisely the same objective, namely to report to the interested
parties on the results of the audit investigation undertaken within the context of the
engagement, it is nevertheless true that the detailed manner in which the audit is conducted
will depend upon the size and circumstances of the NGO concerned.
For the audit objective to be achieved a systematic approach to the task is essential and,
although all aspects of audit work are closely interrelated, it is convenient to distinguish the
essential phases though which the audit develops.
In the Auditor’s Operational Standard the following five essential phases are highlighted:
1. The auditor should adequately plan, control, and record his work.
2. The auditor should ascertain the NGO’s system of recording and processing
transactions and assess its adequacy as a basis for the preparation of financial
statements.
3. The auditor should obtain relevant and reliable audit evidence sufficient to enable
him to draw reasonable conclusions there from.
4. If the auditor wishes to place reliance on any internal controls, he should ascertain
and evaluate those controls and perform compliance tests on their operation.
5. The auditor should carry out such a review of the financial statements as is sufficient,
in conjunction with the conclusions drawn from the other audit evidence obtained, to
give him a reasonable basis for his opinion on the financial statements.

As required by the Terms of Reference (ToR) the audit was carried out in accordance with
Bangladesh Standards on Auditing (BSA) and the specific conditions and supervision given in
the ToR.
Audit methodology carried out during the audit of principle recipients and sub-
recipient NGOs
The methodology was as follows:
i. Entrance meeting with management of the project;
ii. Audit planning-ascertaining the scope and extent of audit work, preparation of
work program and selection of skilled and competent audit team;
iii. Reviewing and assessing the internal control environment;
iv. Reviewing and assessing the accounting system;
v. Contacting and interviewing the program officials as well as beneficiaries
through field visits;
vi. Supervising and reviewing of audit work by senior audit personnel;
vii. Periodic discussion with the management on audit observations and disposal
thereof;
viii. Submission of draft audit report and letter to management;
ix. Discussion on draft report and exit meeting;
x. Issuance of final report.
Assessment of internal control environment
As part of the assessment of internal control environment SSAC have reviewed the accounts
manual, human resources manual and procurement manual and tested their compliance.
SSAC also reviewed accounting system of the project.
Chapter Five: Analysis of the Financial Statements Maintained by the

SKS Foundation (A Partner NGO of AAB)

Generally the donors prescribe the format they prefer to get financial information. These
formats are maintained by the SKS Foundation; a partner NGO of ActionAid Bangladesh.
Generally statements are prepared with adequate notes to accounts. They keep quarterly
reports.
The Financial statement audit is done through checking different heads of accounts and
conducting field visit. Analysis of the financial statements maintained by the SKS Foundation
(a partner NGO of AAB) is given below:
5.1 Identification and project related information
5.1.1 Identity of SKS Foundation
A non-governmental, non-political, non-profitable, non-religious and humanitarian

organization established on 1 December 1987. SKS is an organization for social welfare. It
started development work for the people through socio-economic programs. SKS is the joint
effort of a few local self-developed young men and women, social workers from various
academic disciplines. The organization may be traced back in the activities of a local club at
Bharatkhali of Gaibandha district, one of the remotest and disaster prone northwestern
District of Bangladesh.
Geographically, one of the distinctive features of the district is that out of its total 2179
square km the river of the Teesta, the Bramhmaputra and the Jamuna engulf large north to
south in the eastern part. The district has about 2.2 million populations. It is heartening to
mention that Gaibandha is one of the extremist disaster prone areas of Bangladesh. Flood is
often common during the monsoon. Reversibly there is prevalence of drought almost every
dry season of the year.
Most miseries in the life of the people is river erosion and this rendered a large number of
people homeless, landless, asset-less and also in loss of valuable belongings. River erosion is
one of the serious causes of poverty in this disaster prone district. The number of poverty
stricken people is increaing day by day where the country situation is reverse.

SKS Foundation is registered with the Government of the People’s Republic of Bangladesh,
Social Welfare Department vide Regestration No. Gaibandha- 274/1991 and will NGO Affairs
Bureau under Foreign Donations (Voluntary Activities) Regulation Ordinance 1978 as
amended in 1982 vide Registration No. Dhaka- 1215/1997 dated 18.11.1997 and last
renewed date 18.11.2007.
5.1.2 Background of the project
Advancing Women to Activate Rights & Empowerment (AWARE) project have been
implementing in 04 unions of Fulchari Upazila under Gaibandha district. Project activities are
IGA development, marketing, khas land, women farmer, leadership building training,
prevented violence against women, linkage with govt./non-govt. organization, child and
adolescent development for socio-economic and political development for achieving its
specific goal and objectives. Participants of the project are women 1255, child 690 and 472
sponsored child of them and adolescents are 66 and total number is 2011. We have passed 6
years of the project. Significant levels of positive changes are made during the period.
5.1.3 Objectives of the project
The specific objectives are:
01. To ensure women’s participation in livelihood activities and to change her position and
condition through income generation.
02. To promote and protect food and livelihood security, mitigate monga of vulnerable
groups in underdeveloped high risk rural areas of Gaibandha district.
03. To increase participation in decision making process at local level and encourage
preparing gender based budget.
04. To ensure women’s right to resource (Khas, Land and Property) and legal rights over
resources i.e. ownership.
05. To take initiatives for ensuring the rights to health and education and incorporate
relevant institutions in this project.
06. To reduce vulnerability to target communities to disasters by using local knowledge and
capacity to mitigate the effects.
07. To explore children’s aptitude through education and cultural programs.

5.2 Basis of preparation
5.2.1 Statement of Compliance
The financial statements have been prepared following accrual basis of accounting in
accordance with the Foreign Donations (Voluntary Activities) Regualtion Ordinance and Rules
1978, Bangladesh Financial Reporting Standards (BFRS) and other applicable laws and
regualtions.
5.2.2 Basis of measurements
The financial statements have been prepared on historical cost convention.
5.2.3 Basis of preparation
The financial statements except for receipts and payments account information have been
prepared on accrual basis of accounting.
5.2.4 Presentation and functional currency and level of precision
The financial statements are presented in Bangladesh Taka (Taka/Tk), which is the
organization’s functional currency. All financial information presented in Taka and has been
rounded off to the nearest integer.
5.2.5 Components of financial statements
Components of financial statements are as follows:

1. Balance Sheet
2. Statement of income & expenditure
3. Statement of receipts & payments
4. Notes to the financial statements
5.2.6 Reporting period
The financial statements covered the period from 1 January 2011 to 31 December 2011 .
Comparative figures have been given.
5.3 Significant accounting policies

5.3.1 Grant
The grant is recognized as income when it is received and ActionAid Bangladesh complies
with the conditions attaching to it. Grants that compensate for expenses incurred are
recognized as revenue in the income and expenditure account on a systematic basis in the
same period in which the expenses are incurred with NGO Affairs Bureau approval.
5.3.2 Income and expenses
All income and expenses are recognized on accrual basis.
SKS Foundation
Balance Sheet as of 31 December 2011
Assets Note 2011 2010

Taka Taka
Property & Assets
Fixed Assets Ann-AA 379,020 496,344

379,020 496,344
Current assets
Cash with Bank balance 4.00 35,121

57,295
Total current assets (A)
57,295 35,121
Less: Current liabilities

25,000 21,000
Provision for expenses 5.00 21,000

25,000
Total Current liabilities (B)
25,000 21,000
Net current assets (A-B)

32,295 14,121
Total assets
411,315 510,465
Fund account
Capital fund 6.00 510,466

411,314
Total capital fund

411,314 510,466
5.5.1 Balance Sheet
5.5.2 Statement of Income & Expenditure
SKS Foundation
Statement of Income and Expenditure
For the year ended from 01 January to 31 December 2011

2011 2010
Note Taka Taka
Income
Grants income 7.00 2,485,879 2,659,012
Total income 2,485,879 2,659,012
Expenditures
Personnel cost 8.00 1,730,176 1,702,976
Seminar/ Workshop/ Conferences 9.00 57,238 107,161
Program Cost 10.00 337,998 376,848
Training cost 11.00 19,682 166,177
Office Stationary & Cell phone bill 12.00 85,663 64,296
Traveling allowances 13.00 73,590 15,036
Office expenses 14.00 88,358 77,874
Others (Audit fee) 15.00 25,000 21,000
Depreciation Ann-AA 167,326 99,435
Total expenditure 2,585,031 2,630,803
Excess of income over expenditure transferred to capital fund (99,152) 28,209
5.5.3 Statement of Receipts and Payments
SKS Foundation
Statement of Receipts and Payments

Note 2011 2010
Taka Taka

Receipts
Opening Cash in hand & Bank 35,121 15,032
Grants received 7.00 2,485,879 2,659,012
Loan Received 16.00 313,000 95,000
Total grants received 2,834,000 2,769,044
Payments
Personnel cost 8.00 1,730,176 1,702,976
Seminar/ Workshop/ Conferences 9.00 57,238 107,161
Program Cost 10.00 337,998 376,848
Training cost 11.00 19,682 166,177
Office Stationary & Cell phone bill 12.00 85,663 64,296
Traveling allowances 13.00 73,590 15,036
Office expenses 14.00 88,358 77,874
Others (Audit fee) 15.00 - -
Loan Payment 17.00 313,000 95,000
Capital Cost 18.00 50,000 128,555
Last Year Audit fee Payment 21,000 -
Total payments 2,776,705 2,733,923
Closing balance (A-B) 57,295 35,121
5.5.4 Notes to the Financial Statement
Amount in Amount in
Taka Taka
4.00 Cash with Bank balance 31 Dec 2011 31 Dec 2010
Bank balance 57,295 35,121

57,295 35,121

Name of Bank: Sonali Bank Limited

Account No.: 1192 Current
Branch: Fulchari, Gaibandha
5.00 Provision for expenses
Audit fee 25,000 21,000

25,000 21,000
6.00 Capital fund
Opening capital 510,466 482,256

Excess of income over expenditure (99,152) 28,210
411,314 510,466
7.00 Grants received from AAB
The following amount was received from AAB through Sonali Bank Limited, Varotkhali Branch,
Gaibandha through AAB Bank Account no. 009-062795-011 on the following dates:
Received date
28.04.11 1,203,695 1,484,968
01.08.11 699,644 872,051
30.10.11 582,540 301,993
2,485,879 2,659,012
8.00 Personnel Cost
Director (Partly) 106,574 96,889

Managerial 319,748 290,680
Skilled 1,303,854 1,315,407
As per statement of income & expenditure 1,730,176 1,702,976
9.00 Seminar/ Workshop/ Conference
Quarterly Meetings of Community Journalist Group 1,795 5,995

Sponsorship PRRP Community Discussion 240 990
Entrepreneurship development Meeting 1,981 -
Linkage with different service providers 1,000 1,235
Quarterly Producer group meeting (snacks) 596 3,520
Women linkage with local market 1,892 -
Khas land follow up meeting 1,972 5,335
Open Budget, Meeting, gathering at union level 5,000 28,001
Meeting with UP standing committee 2,640 7,690
Participatory plans and budget 900 -
Participatory review & reflection process workshop 1,147 3,556
Yearly planning workshop and review meeting 1,510 -
Monthly program staff meeting 11,996 10,467
National and International day observation 6,845 24,898
Lokokendra forum meeting 742 -

Lokokendra wise planning workshop 1,030 -

Awareness on Disaster preparedness 496 -
Spouse/ Guardian forum meeting 1,460 6,390
Follow up of dialog session on right to know the 2,288 -
information
Court yard session for 2 adolescent group 490 -
School level orientation 1,450 4,149
Meeting with UP NNPC 464 4,935
Monthly refresher meeting for center facilitator 9,304 -
57,238 107,161
57,238 107,161
10.00 Program Cost
CM Materials 28,946 49,702

Child Photo/ Profile 8,897 -
Local Travel cost per month Tk. 700. 7,000 -
Refreshment for children for CM 7,979 -
Community news letter 8,008 4,995
Children Emergency Fund 2,996 3,936
Administrative Equipments Maintenance 8,495 48,934
Nursery activity 1,000 -
Sapling follow up 200 -
Vegetable cultivation follow up 187 -
Road side tree plantation 485 -
Upazila and District level Mela 850 -
Seed collection and preservation 998 -
Reflect Materials cost 2,362 -
Communication cost for PO, LM 6,586 -
House Rent for lokokendra 12,000 10,900
Mini library 498 -
Field visit of Govt. Service provider 1,000 -
Govt. service camp at Lokokendra level 1,000 -
Linkage with govt. department for skill training 500 -
Facilitator Honorarium ( learning centre) 143,507 61,653
Child Material 20,418 22,406
Sports materials for shishu kendra 4,972
Participating in local level cultural program 620 -
House Rent for shishu kendra 52,800 -
Sponsorship children scholarship 5,000 -
Annual sports 5,460 -
Child Center Formed 174,322
Total Program Cost 337,998 376,848
337,998 376,848
11.00 Training cost
Women Leadership Training 12,182 74,952

Women Leadership Follow up Training 7,500 48,147

Others training - 43,078
19,682 166,177
12.00 Office Stationary & Cell phone bill
Printing, stationery & photocopy 34,273 -

Phone, fax, internet etc. 51,390 64,296
As per statement of receipts & payments 85,663 64,296

13.00 Traveling allowances
Local travel & outstation travel 54,507 -

Fuel 13,261 11,004
Repair & Maintenance 5,822 4,032
73,590 15,036
14.00 Office expenses
Cleaning Materials 1,562 -

Electricity Bill 7,200 14,375
IPS Battery 7,534 -
Misc. Exp 7,587 8,299
News Paper 3,044 -
Partner's Office Rent 55,200 55,200
Bank charges 6,231 -
88,358 77,874
15.00 Others(Audit Fee)
Audit fee 25,000 21,000

As per statement of income & expenditure 25,000 21,000
Less: Provision for audit fee 25,000 21,000
As per statement of receipts & payments - -

16.00 Loan Received
SKS Gaibandha-GF 313,000 95,000

17.00 Loan Payment
SKS Gaibandha-GF 313,000 95,000

18.00 Capital Cost
Motorcycle - 110,600

Electric Equipment - 12,505

Lokokendra Furniture & Fixture - 5,450
Tally Software 50,000 -
50,000 128,555
SKS Foundation
Advancing Women to Activate on Right and Empowerment
Project

Figure in Taka
Chapter Six: Terms of Reference (ToR); Requirements and Compliance

In addition to the auditors’ report, we also report as follows on the basis of our examination
of the books and records of “Advancing Women to Activate on Right and Empowerment
Project” of SKS Foundation on specific points required by the NGO Affairs Bureau vide its
circular no. ABIBU/PIN-2/CA Firm /745/2010-37 dated 12 January, 2012 as follows:
ToR-1: Requirements:
In course of audit of NGOs, the audit firm should perform their duties with utmost
responsibility remaining fully independent.
Compliance:
We have conducted the audit in accordance with Bangladesh Standards on Auditing (BSA)
and disposed of our obligations with utmost responsibility remaining fully independent. The
terms of reference provided with the enlistment has been properly followed.
ToR-2: Requirements:
The audit firm should conduct the audit of NGOs keeping in view whether the project has
been implemented in compliance with the following rules and regulations enacted for the
NGOs and the terms & conditions relating to project approval:
 The Foreign Donation (Voluntary Activities) Regulation Ordinance, 1978.

 The Foreign Donations (Voluntary Activities) Regulation Rules, 1978.
 The Foreign Contributions (Regulation) Ordinance, 1982.
 Working procedures as mentioned in circular (Paripatra) No. 33.43.27.00.00.01.2000-
107 issued by the office of the Prime Minister dated 29.05.01 (as applicable).
 FD-6 related to project approval (where projects objectives, aims and budgets are
stated in details).
 FD-7 or FC-1
 Terms and Conditions of project approval.
Compliance:
In course of our audit we observed from our test verification that the NGO has followed the
rules and regulations enacted for the NGOs as applicable and the project has been
implemented and the expenditure have been incurred in accordance with the provisions of
FD-6 and the terms and conditions contained in the project approval.
ToR 3: Requirements:
The audit firm, along with their audit report, should issue audit certificate as per format FD-4
and annexure A-1 attached thereto prescribed by NGO Affairs Bureau, relating to foreign
donation received and expenditure incurred, duly filled up by the audit firm. All information
in FD-4 regarding foreign grant receipts and payments must be in cash basis, not in accrual
basis i.e. no foreign grant can be presented as negative or receivables. In FD-4 difference

between approved budget and actual budget need to be disclosed as gross amount. All
details i.e. line item wise approved budget, actual expenditures, variances and reason for
variances will be included in annexure A/1. All information (budget line item and sub line
item) in annexure A/1 and budget should be same as in approved project (Annexure-C).
Compliance:
Form FD-4 along with Annexure-1 have been prepared in the prescribed format of NGO
Affairs Bureau in respect of foreign donations herewith.
In case of more than one project separate audit reports must be prepared as per project
year. If there is any local income/grant related to the project should be shown separately.
Compliance:
The NGO maintains one separate project account.
ToR-5: Requirements and Compliance:
The summarized project goal, objective and main activities of the project should have to be
mentioned in the audit report along with factors stated below:
a) Summarized project briefing
A non-governmental, non-political, non-profitable, non-religious and humanitarian

organization established on 1 December 1987. SKS is an organization for social welfare. It
started development work for the people through socio-economic programs. SKS is the joint
effort of a few local self-developed young men and women, social workers from various
academic disciplines. The organization may be traced back in the activities of a local club at
Bharatkhali of Gaibandha district, one of the remotest and disaster prone northwestern
District of Bangladesh. Geographically, one of the distinctive features of the district is that
out of its total 2179 square km the river of the Teesta, the Bramhmaputra and the Jamuna
engulf large north to south in the eastern part. The district has about 2.2 million populations.
It is heartening to mention that Gaibandha is one of the extremist disaster prone areas of
Bangladesh. Flood is often common during the monsoon. Reversibly there is prevalence of
drought almost every dry season of the year. Most miseries in the life of the people is river
erosion and this rendered a large number of people homeless, landless, asset-less and also in
loss of valuable belongings. River erosion is one of the serious causes of poverty in this
disaster prone district. The number of poverty stricken people is increasing day by day where
the country situation is reverse.
SKS Foundation is registered with the Government of the People’s Republic of Bangladesh,
Social Welfare Department vide Registration No. Gaibandha- 274/1991 and will NGO Affairs
Bureau under Foreign Donations (Voluntary Activities) Regulation Ordinance 1978 as
amended in 1982 vide Registration No. Dhaka- 1215/1997 dated 18.11.1997 and last
renewed date 18.11.2007.

ii) Objectives
The specific objectives are:
01. To ensure women’s participation in livelihood activities and to change her position and
condition through income generation.
02. To promote and protect food and livelihood security, mitigate monga of vulnerable
groups in underdeveloped high risk rural areas of Gaibandha district.
03. To increase participation in decision making process at local level and encourage
preparing gender based budget.
04. To ensure women’s right to resource (Khas, Land and Property) and legal rights over
resources i.e. ownership.
05. To take initiatives for ensuring the rights to health and education and incorporate
relevant institutions in this project.
06. To reduce vulnerability to target communities to disasters by using local knowledge and
capacity to mitigate the effects.
07. To explore children’s aptitude through education and cultural programs.
iii) Targets:
The project will be implemented as per the guideline of ActionAid Bangladesh and in
coordination with SKS Foundation in selected areas.The targeted beneficiaries of the project
are women 1255, child 690 and 472 sponsored child of them and adolescents are 66 of
Fulchari Upazila in Gaibandha District.
iv) Location of the project:
Fulchari Upazila in Gaibandha District.
v) Number of personnel (Local): No.

Cost
Director (Partly) 1 106,574
Managerial 1 319,748
Skilled 14 1,303,854
As per statement of income & expenditure 1,730,176
b) Details of name of the project, total duration of the project, the date and memo no of
project's approval, date and memo no of release of fund, amount of released fund (with
installments), amount of received foreign donation, audit year, project area, number of
beneficiary, auditors appointment date are given below:

Advancing Women to Activate on Right and

Name of the Project
Empowerment Project
Total duration of the project 3 Year
The date and memo no of project's Date: 05/04/2011; Memo No:ABBU/PRO-5/SKS
approval Fou:/100-11/2011-1007
Date: 05/04/2011; Memo No:ABBU/PRO-5/SKS
Date and memo no of release of fund
Fou:/100-11/2011-1007
Amount of released fund (with installments)
No. of
Installmen Date Amount Total
t
1,203,6
1 28.04.11
95
699,64 2,485,8
2 01.08.11
4 79
582,54
3 30.10.11
0
Amount of received donation 2,485,879
Whether the foreign donation
received in the mother account before Yes.
releasing the fund or not?
Audit Year 1st January to 31st December 2011
Project Area Fulchari, Gaibandha.

Participants of the project are women 1255, child
Number of Beneficiary 690 and 472 sponsored child of them and
adolescents are 66 and total number is 2011.
The date of appointment of auditor for
October 17, 2011
Audit purpose
Balance Sheet, Income & Expenditure Account and Receipts & Payments Account will be part
of audit report and duly signed by NGO authority. Further explanation is required if Balance
Sheet is not required. The Receipts and Payments Account should have been prepared in
accordance with the head of accounts maintained in the ledger book of the NGOs. Notes
showing the detailed breakup of the expenditures under the consolidated head of accounts
have been attached herewith wherever found necessary. (Such as Contingency and Others)
should have to be attached.
Compliance:

a) Receipts and payments account has been prepared in accordance with heads of Accounts
maintained in the ledger book of the NGO.
b) No difference is observed between the heads of accounts as per receipts and payments
accounts and the heads of accounts as per Annexure-A/1 attached with the Form FD-4
c) Notes showing the detailed breakup of the expenditures under the consolidated head of
accounts has attached herewith wherever found necessary.
d) Balance sheet has been prepared and submitted along with this audit report.
e) The Receipts and payments account, income and expenditure account and balance sheet
have been duly signed by the appropriate authority of "AWARE Project" of ActionAid
Bangladesh and with this audit report.
Audit report for NGO must be counter signed by appropriate authority of CA firm along with
common seal. But full signature of auditor is required in audit certificate, Balance Sheet,
Accounts Statement, FD-4 certificate and compliance of TOR statement. Full signature of
auditor will be followed by full name and title of FCA/ACA. NGO audit report must be
prepared according to the following sequence:
First Part
 Auditors Certificate along with scope opinion etc.

 Balance Sheet
 Income and expenditure statement
 Receipts & Payments Statement
 Notes to financial statements
 Schedule/Appendix/ Others
Second Part
 FD-4 Certificate
 Annexure A/1
 Notes to FD-4 (if any)
 Statement on NGO Bureau TOR compliance
(All conditions described in TOR must be complied)
Compliance:
The audit report has been duly signed and the seal of the firm has been affixed. And also the
full signature of the auditor Mr. Snehasish Barua, FCA is also added. The report is prepared as
per Bangladesh Standards on Auditing (BSA) and the sequence prescribed in the ToR.FD-4
certificate is attached along with Annexure-A/1.

In case of ongoing project (multi years project life), the auditor’s report must contain
information on whether last year audit has been performed or not and if performed whether
that was send to NGO affairs Bureau. In case of similar project (i.e. in last year there was a
similar name/ similar nature), the auditor’s report also contain information on whether last
year audit has been performed or not and if performed whether that was send to NGO affairs
Bureau.
Compliance:
This is a three year project. Audit had been performed in the previous year. And the audit
report was send to NGO affairs Bureau.
On completion of the audit, the audit firm should forward one copy of the audit report in a
sealed cover directly to the Deputy Director (Inspection and Audit), NGO Affairs Bureau,
Dhaka.
Compliance:
The audit report has been duly signed and the seal of the firm has been affixed. One copy of
the audit report is being forwarded directly to the Deputy Director (Inspection and Audit),
NGO Affairs Bureau, Dhaka.
If there is any partner NGO in the project under audit, the accounts of partner NGO also
required to be audited. There should be a statement regarding partner NGO audit and
whether the audit is satisfactory or not.
Compliance:
There is no partner NGO involved as such, therefore no statement regarding partner NGO
audit is required.
Information of Initial registration number and date of registration of NGO with NGO affairs
Bureau and last renewal date need to be mentioned.
Compliance:
SKS Foundation is registered with NGO Affairs Bureau of Bangladesh Government vide
registration number 1215 dated 11 November 1997 and subsequently renewed on 31 August
2008 covering a five-year period upto 31 August 2013 under the Foreign Donation (Voluntary
Activities) Regulation Ordinance and Rules 1978.

Whether all the foreign donations have been received by the NGO through a single bank
account as per provisions of Rule 7 of The Foreign Donations (Voluntary Activities) Regulation
Rules, 1978? If the foreign donations are received through more than one bank account the
name of concerned bank, account number and the amount should have to be mentioned.
Compliance:
The NGO as per provisions of Rule 7 of The Foreign Donations (Voluntary Activities)
Regulations Rules, 1978 has reportedly received all the foreign donations through a single
bank account.
Detailed description of the bank account number approved by the NGO Affairs Bureau to
receive donations, name of the bank and branch, amount of donation received and name of
the donor for the project year. Also relevant project bank account number, bank name &
branch and balance information required to mention. There should be information regarding
reconciliation of mother account and project account and whether the reconciliation is
correct or not.
Compliance:
Donations were received through mother account no. 3998/37, Sonali Bank, Bharatkhali
Branch, Gaibandha. The donations amounting to Tk. 2,485,879 was received against the
approval of Tk.2,500,000 as per NGO Affairs Bureau approval no ABBU/PRO-5/SKS Fou:/100-
11/2011-1007 dated 05/04/2011. The date of receipt, amount received in local currency are
as follows:
Received from Taka

Grant received from :
ActionAid Bangladesh 2,485,879
Local Source (Cash) -

Local Source (Goods) -
2,485,879
Date Taka
28.04.2011 1,203,695
01.08.2011 699,644
30.10.2011 582,540
2,485,879
The details of the banks, and the balances as at December 31, 2011 were as follows:


Bank
Balance as per bank Balance as per project
reconciliation
Name of Bank Statement as at December bank book as at
performed
31, 2011 December 31, 2011
and checked
Sonali Bank Limited , Fulchari, Gaibandha
Nill Nill No
Current A/C No. A/C No-1192/5
(Mother account)
Sonali Bank Limited , Kurigram
STD A/C No-3998/37 91,420 57,295
(Operational account) Yes
In case of foreign donations received in kinds, making the valuation thereof should be
included with grant shown in FD-4 (either separately or consolidated) and should submit
statement in respect its use and description of balance in accordance with FD-5.
Compliance:
As reported by the management no donation in kinds was received during the period under
audit.
Interest earned/exchange gain derived on foreign donations should have to be stated

separately in the statement of accounts and to spend such fund whether
permission/approval has been obtained from NGO Affairs Bureau should have to be
mentioned.
Compliance:
No exchange gain was earned against the foreign donation received for the Project.Bank
interest amounting to Tk.0 was earned on foreign donations through bank account
maintained for the ActionAid Bangladesh. The amount was not spent and not included in the
unutilized balances as it is required to be refunded to the donor and therefore approval from
NGO Affairs Bureau was not required.
Whether the NGO has maintained Cash Book/Bank Book and Ledger Book under double entry
system of accounting as per requirement of Rule 6 of The Foreign Donation (Voluntary
Activities) Regulation Rules, 1978, also a statement on whether the cash book/bank book,
ledger book, stock register, asset register & other registers has been maintained accordingly.

Compliance:
Cash book/bank book and ledger on double entry basis and other registers viz attendance
register and stock register have been maintained as per Rule-6 of Foreign Donations
(Voluntary Activities) Regulation Rules 1978.
In case, where there is Revolving Loan Fund (RLF) against previously and currently
implemented projects of the organization, whether separate project/donor-wise accounts
are maintained or a consolidated accounts is maintained should have to be mentioned. Also a
statement on whether this account has been audited separately every year or not. If foreign
aided RLF account is not kept separate and there are loan disbursements then service charge
received required to show as a receipt.
Compliance:
There is no Revolving Loan Fund (RLF) against the project. Therefore no existence of such
account; and audit is not required.
Information regarding having license of Micro Credit Regulatory Authority for NGO’s which
involves in micro credit by using foreign donors grant.
Compliance:
There was Micro Credit activity of the NGO.Reg.No-01621-00534-00045
Whether the amount of donation has been spent in foreign currency? If spent the details of
which should have to be mentioned.
Compliance:
No transaction was made in foreign currency on account of any expenditure during the
period.
Whether excess expenditure has been incurred against particular head of expenditure or
adjusted the expenditure of one head with another head or adjusted the expenditure of an
unapproved head with an approved head? If done, detail description of the purpose of such
excess expenditure along with the reasons should have to be mentioned.
Compliance:
Expenditure of some head has exceeded the approved budget.\

Item of Expences Budget Actual Spent Variance
Fuel 12,000 13,261 (1,261)
Repair & Maintainance 5,300 5,822 (522)
Misc.Exp 7,500 7,587 (87)
Bank charges 6,000 6,231 (231)
Whether the salary-allowances of officers/staffs are paid by bank cheque or in cash should
have to be mentioned. The statutory requirement is all expenditures along with salary and
other benefit over BD Taka 10,000 needs to be disbursed through bank account.
Compliance:
Salaries of employees of the “Advancing Women to Activate on Right and Empowerment

Project" of SKS Foundation were paid through cheques or bank advice so far as it came to our
notice.
If the project is implemented by receiving loan, necessary information relating to the source
of loan should have to be mentioned.
Compliance:
During the Project period, loan was taken from other projects by the management to
implement the activities of the Project and subsequently the loan was fully paid.
Whether any member of the General Body and Executive Committee receives salary-
allowance or any sorts of honorarium? If receives, details of which should have to be
provided. Also if executive head of NGO is taking salary or other benefits and honorarium
from Project under audit either full or partial, detail disclosure is required.
Compliance:
Salary or remuneration has not been received by any member of general body.
Whether the internal control system of the organization is satisfactory or not should have to
be satisfactory.
Compliance:

The internal control system of the Organization was found satisfactory to the extent of the
audit of the Project financial statements.
Whether any amount has been refunded to the donor agency without prior approval form
NGO Affairs Bureau? If refunded, details should have to be given;
Compliance:
No amount was refunded to the donor during the year, which required approval from NGO
Affairs Bureau.
Whether in light with the government rules and regulation revenue stamp has been affixed in
appropriate case, VAT/Income tax has been deducted from bill/voucher or not and deducted
VAT/Income tax have been duly deposited with government exchequer , auditors comments
should have to be given in this regard. Also a statement of VAT and IT deposit (separate
amount for each) has to be given.
Compliance:
Required revenue stamps were affixed where necessary.The Organization deducted Value
Added Tax (VAT) where applicable, as per requirements of Value Added Tax (VAT) Act 1991
and the Value Added Tax (VAT) Rules 1991 for the Project and deposited the same with the
Government Exchequer.
The Organization deducted tax as per the requirements of Income Tax Ordinance 1984 and
Income Tax Rules 1984 for the Project and deposited the same with the Government
Exchequer.
Deposited
Sl. No. & Deductable Deducted
Amount in Due Amount
Subject Amount(Tk) Amount(Tk)
Treasury(Tk)
1 2 3 4 2-3=5
01. VAT 13755 13755 13755 0
02. IT 1785 1785 1785 0
Total 15542 15543 15544 0
Statement on whether the NGO as a legal entity as per Income Tax Ordinance 1984
submitted income tax return accordingly.

Compliance:
Income Tax Return of SKS Foundation for the assessment year 2012-2013 will be due on 15
July 2012.
Information required relating to whether the NGO has any income generating activities under
the project, if so whether the income tax has been duly paid for on all earnings or income tax
exemption certificate in relevant case.
Compliance:
There was no Income Generating Activities (IGA) under the project.
Whether any officer/staff/member of the executive committee or general body has availed
foreign tour with the finance/air ticket/other facilities received from foreign sources. If
availed, description of which and in case of foreign tour whether permission of NGO Affairs
Bureau has been obtained details of which should have to be stated.
Compliance:
As we informed by the management and observed from our verification that, none of the
officers/ staffs/member of the executive committee or general body has availed foreign tour
with the finance/air ticket/other facilities received from foreign sources.
The description of fixed assets along with probable market price held by the organization at
the time of audit should have to be attached with the report. The related fixed
assets/deeds/house rent agreement/donated land are in the name of the organization
should have to be mentioned in the report and if available detailed schedule should have to
be given.
Compliance:
Fixed assets have been reported in the financial statements. Particulars regarding house rent
agreements are given below:
SKS Foundation Agreement Monthly Rent

Name of Landlord
Gaibandha Period Taka
Project Office in 01/01/2011 to
Tahmina Begum Simu 4186
Fulchari Gaibandha 01/12/2011

01/07/2011 to
Shisu Kendra Md. Mokbul Hossen 400
01/12/2011
01/01/2011 to
Shisu Kendra Md. Saju Mia 400
01/12/2011
01/01/2011 to
Shisu Kendra Nahida 400
01/12/2011
01/01/2011 to
Shisu Kendra Ayna 400
01/12/2011
01/01/2011 to
Shisu Kendra Rahima 400
01/12/2011
01/01/2011 to
Shisu Kendra Md. Abdus Salam 400
01/12/2011
01/01/2011 to
Shisu Kendra Jobeda 400
01/12/2011
01/01/2011 to
Shisu Kendra Babee 400
01/12/2011
01/01/2011 to
Shisu Kendra Moslema 400
01/12/2011
01/01/2011 to
Shisu Kendra Shefali 400
01/12/2011
01/01/2011 to
Shisu Kendra Mariom 400
01/12/2011
01/01/2011 to
Shisu Kendra Md Amjad 400
01/12/2011
01/01/2011 to
Shisu Kendra Habeda 500
01/12/2011
01/01/2011 to
Shisu Kendra Farjana 500
01/12/2011
After the completion of audit the CA firm should submit a Management Letter/ Report of all
irregularities/ illegal expenditure / unauthorized expenditure/ expenditure which is beyond
budget to the management authority of NGO and one copy of its require to submit Deputy
Director of NGO affairs Bureau (Inspection & Audit) along with audit report. If such letter is
not required that also needs to be mentioned.
Compliance:
As we didn't found any irregularities / illegal expenditure / unauthorized expenditure in the

accounts of AWARE project, management letter is not required.
A CA firm can not perform audit for the same NGO project more than consecutive three (3)
years. For this purpose a statement is required that the CA firm is not engaged as an auditor
for the NGO under audit for more than consecutive three (3) years.
Compliance:

This is the first year of audit of "Advancing Women to Activate on Right and Empowerment
Project" of SKS Foundation by Syful Shamsul Alam & Co, Chartered Accountants
A list of Executive Committee/ Governing Body/ Management Committee members of NGO

under audit should have to be given.
Compliance:
The names and designations of the Members of the Senior Management Team of the AAB
are:
Sl. No. Name of the Member Designation

01 Murshed Alam Sarkar President
02 Md. Mosharof Hosen Khan Vice-President
03 Rasel Ahmed Liton Chief Executive
04 Prity Dey Manager
05 Rafiqul Islam Sarkar Member
06 Nishat Nahar Member
07 Md. Aiyub Ali Member

Statement on whether the cost of project audit has been incurred from the project fund or
not.
Compliance:
The project audit cost of will be incurred from the project fund as per approved FD-6 , Ref
ABBU/PRO-5/SKS Fou:/100-11/2011-1007 dated April 05, 2011.
In the audit report, the Chartered Accountant (CA) firm enlistment with NGO affairs Bureau
reference number along with date and serial number should have to be mentioned.
Compliance:
Firm’s enlistment number with NGO Affairs Bureau and date of renewal has been disclosed in
the Auditors’ Report (Page no.1) and Auditors’ Certificate (Page no.12).
Chapter Seven: Findings & Opinion
6.1 FD-4 (Findings)

I have assisted auditing the Accounts of Advancing Women to Activate on Right and
Empowerment Project of SKS Foundation,(Radakisnopur, College road, Gaibandha)
having registered with the NGO Affairs Bureau, under the foreign donation (Voluntary
Activities ) Regulations Ordinance 1978 (Reg. no.-1215, Date-18-11-1997 and
subsequently renewed on 31 August 2008 covering a five-year period up to 31 August
2013) for the year ended 31 December 2011 and examined all relevant books and
vouchers and certify that according to the audited accounts;
(1) The brought forward Foreign Donations for the project was Tk. 35,121
(2) The Foreign Donations amounting to Tk. 2,485,879 were received by the organization
for the project.
(3) The Balance of unutilized Foreign Donations by the organization is Tk. 57295.
(4) Foreign Donations amounting to Tk. 2,467,705 have been utilized for the following
purposes:
Heads of
Amount as per Amount actually
Expenditure Differences if any with reason
Approved budget Paid
Differences
(As per Annexure-A The remaining balance of Tk 52,295 is

2,500,000 2,467,705
of project proforma) deposited in the bank.
(5) Certified that the organization has maintained the accounts of Foreign Donations and
records relating thereto in the manner specified as in section 5 of the Foreign Donations
(Voluntary Activities) Regulations Ordinance, 1978 read with rule 6 and 7 to the said
ordinance.
(6) The information furnished above is correct and checked by the chartered accountants.
6.2 Notes to the FD-4

Details of Estimated Cost of the Project
For the period from 1 January to 31 December 2011
Head of Expenditure Cost in Bangladesh Taka
(i) Civil construction, if any Nil
(ii) Other material inputs including Furniture and fixture Nil
(iii) Personnel 1,730,176
(iv) Consultants:
(a) Foreign Nil

(b) Local
Nil
(v) Revolving loan fund, if any: Nil
(vi) Training, if any:

(a) Field duration Nil
(b) Number of Trainees Nil
(vii) Seminar/Workshop/Conferences 57,238
(viii) Program Cost 337,998
(ix) Office Accommodation 55,200
(x) Office equipment (Tally Software) 50000
(xi) Vehicles Nil
(xii) Travelling allowances and daily allowances 73,590
(xiii) Custom duty and Sales Tax (CDST) Nil
(xiv) Head Office and Branch Office’s expenses charged 118,821
(xv) Contingency Nil
(xvi) Others(Audit Fee) 25000
Total 2,467,705
Chapter Eight: Conclusion

In this study I have tried to incorporate a practical exposure on the audit of Non
Governmental Organizations. As an external auditor during audit it is important to maintain
professional skepticism to identify misstatement in the financial statements. As now a day,
auditing is not confined to rectification of irregularities and placing findings, the
recommendation made on those irregularities concerning the effects is a moral and
professional responsibility.
For this reason a proper understanding of the client and its operations is necessary for an
auditor. In Bangladesh the NGO sector is big and the number of beneficiaries is increasing day
by day. Proper transparency of this sector can ensure development in greater extent for our
beloved country Bangladesh. CA firms can contribute a lot in achieving this goal as the
Chartered Accountants have a place of trust and belief by the people.
ANNEXURE (Annexure A/1)

: SKS Foundation
:
: ABBU/PRO-5/SKS Fou:/100-11/2011-1007 dated April 5, 2011 (Govt. Approval)
: January 1 to December 31, 2011 Tk. 2,500,000.00

: January 1 to December 31, 2011

BIBLIOGRAPHY:
The Companies Act, 1994 (Act XVIII of 1994);
Bangladesh Standard on Auditing (BSA), Volume I & II;
Bangladesh Accounting Standards (BAS);
The Societies Registration Act, 1860 (Act XXI of 1860);
The Trust Act, 1882 (Act II of 1882);
Microcredit Regulatory Authority Bangladesh: Microfinance Regulations in Bangladesh

Development & Experiences, Lila Rashid, Director, MRA;
Ahmed Saifuddin, Spring 2006, NGO perception of poverty in Bangladesh: Do their

programmes match the reality?, University of Bergen, Norway;
Hashimi, S M, S R Shchuler and A P Riley (1996): 'Rural Credit Programmes and Women's
Empowerment in Bangladesh', WorldDevelopment, Vol 24, No h, pp 635-53;
Zohir, Sajjad and I Matin (2004): 'Wider Impacts of Microfinance Institutions Issues and
Concepts', Journal of International Development, Wiley and Co. UK;
Chow David FCCA, FCPA, CPA (April 2009): Analytical Procedures –A powerful tool to
auditors, T/Dialogue.

Letter of Transmittal: Auditing of An Ngo: A Case Study On Aware Project Funded by Actionaid Bangladesh

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Letter of Transmittal: Auditing of An Ngo: A Case Study On Aware Project Funded by Actionaid Bangladesh

Uploaded by

Copyright:

Available Formats

Auditing of an NGO: A Case Study on AWARE Project Funded by ActionAid Bangladesh

3rd May, 2012

Subject: Submission of Internship Report.

Muhammad Firoz Mahmud

Advancing Women to Activate on Right and Empowerment Project

Advancing Women to Activate on Right and Empowerment Project

Acronym Full Form

VAT Value Added Tax

ICAB The Institute of Chartered Accountants of Bangladesh

NGOAB Non-Government Organization Affairs Bureau Bangladesh

ISA International Standards on Auditing

BSA Bangladesh Standards on Auditing

FIFO First In First Out

Advancing Women to Activate on Right and Empowerment Project

Advancing Women to Activate on Right and Empowerment Project

Chapter One: Preamble

Advancing Women to Activate on Right and Empowerment Project

Non-Governmental Organizations (NGO) is not financed by the Government. NGO’s mainly

1.2 Objectives of the study

Advancing Women to Activate on Right and Empowerment Project

 Gaining practical knowledge and experience on how a chartered accountancy firm

1.3 Methodology of collecting Information

Advancing Women to Activate on Right and Empowerment Project

Primary sources information

Secondary sources information

1.4 Limitation of the study:

Chapter Two: Literature Review

Advancing Women to Activate on Right and Empowerment Project

Non-governmental development organizations are potentially critical catalysts for unlocking

"Auditing is the accumulation and evaluation of evidence about information to determine

Advancing Women to Activate on Right and Empowerment Project

Chapter Three: Profile of SSAC

Advancing Women to Activate on Right and Empowerment Project

3.1 The profile of SSAC at a glance:

Syful Shamsul Alam & Co (SSAC)

Date of establishment 06 March, 1993

Dilkusha C/A (6th Floor)

3.2 Manpower Strength

Sl. Personnel Number

Advancing Women to Activate on Right and Empowerment Project

Sl. Personnel Number

3.3 Role of the Personnel:

iv. Senior student:

vi. Junior Student:

3.4 Non Professional Staff:

Advancing Women to Activate on Right and Empowerment Project

 General Manager (GM)

3.5 Services Provided By the Firm

(a) Services offered cover the following areas

Advancing Women to Activate on Right and Empowerment Project

Manufacturing and Energy and Non-profit organizations

Commercial services Finance

 Courier and cargo  Banking

3.6 Association and Membership

(a) Affiliation with International Auditing/Accounting Firm

SSAC is an independent member of Urbach Hacker Young international Limited, 23rd

Chapter Four: Audit Procedures for NGOs followed by SSAC

4.1 Engagement Procedures

Advancing Women to Activate on Right and Empowerment Project

 Engagement with new NGO.

4.1.1 In case of engagement with new NGO:

Advancing Women to Activate on Right and Empowerment Project