1. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD BY GRUP NO-4 Roll no 02, 11, 13,19

2. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD Objectives: To analysis the present course To highlight the practical knowledge acquired upon completing the course To find out the relevance of the teachings with the practically used methods

3. CORRELATION BETWEEN STEEL USE AND GDP GROWTH  Every org either be it a public or private Ltd company has its own style of doing things.  Similarly each org maintains its financial records in its own way.  Again in the course curriculum in BUP for EMBA-2 students subjects accounting for managers was taught.  Now to find out the practical applicability of this subject different audit and financial reports of any organization need to be analyzed.  To find the relevance of the teaching and the practically flowed methods of maintaining financial records Introduction

4. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD In our MBA-2 class we have learnt two types of accounting namely Financial Accounting and Managerial Accounting. In the financial accounting we have learnt the following:  Company Income statement  Company balance sheet  Statement of stockholder equity  Statement of cash inflow and outflow.  Preparation of T account for transaction  Journal entry  Posting into the final ledger COURSE ANALYSIS

5. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD  In the managerial accounting we have learnt basically JOB Order costing and process costing.  Under Job order costing the following subjects covered: Classification of costs like, direct material, direct labour, manufacturing overhead and non manufacturing costs like, marketing and selling costs and administrative costs.  comparison between merchandising company and manufacturing company and their preparation of income statement, costs of goods manufactured for the year ending, T accounting and journal entry process Managerial accounting

6. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD In the Process Costing accounting we have learnt the following subjects:  Differences between job order and process costing  Equivalent Units of Productions  Weighted Average method  Production report Process costing Account

7. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD PROPERTY AND ASSETS 2007 2008 Notes Taka Taka Cash 4 In hand219,714,704279,733,998 (including foreign currencies) Balance with Bangladesh Bank and its agent bank (including foreign currencies) Balance with other banks Financial Instructions 5 In Bangladesh outside Bangladesh CASE STUDY –BANK ASIA AUDIT REPORT PRESENTED BEFORE AGM-2009 Balance Sheet as at 31 December 2008

8. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD PROPERTY AND ASSETS 2007 2008 Taka Taka Money at call and on short notice 6 Investments 7 Government Others Loans and advances/investments 8 Fixed assets including premises, furniture and fixtures 9 Other assets Non - banking assets Total assets CASE STUDY –BANK ASIA AUDIT REPORT PRESENTED BEFORE AGM-2009 Balance Sheet as at 31 December 2008

9. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD LIABILITIES AND CAPITAL Liabilities Borrowings from other banks, financial institutions and agents Deposits and other accounts 12 Current/Al-wadeeah current accounts and other accounts Bills payable Savings bank/Mudaraba savings bank depositsFixed deposits/Mudaraba fixed deposits Bearer certificates of deposit Other deposits Other liabilities 13 Total liabilities CASE STUDY –BANK ASIA AUDIT REPORT PRESENTED BEFORE AGM-2009 Balance Sheet as at 31 December 2008

10. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD Capital/Shareholders' Equity Paid up capital 14.2 Share premium 15 Statutory reserve Revaluation reserve 16 Exchange equalization reserve Retained earnings 17 Total shareholders' equity (S/E) Total liabilities and S/E 53,371,247,063 / 38,427,853,094 CASE STUDY –BANK ASIA AUDIT REPORT PRESENTED BEFORE AGM-2009 Balance Sheet as at 31 December 2008

11. CORRELATION BETWEEN STEEL USE AND GDP GROWTH Off-Balance Sheet Items Contingent liabilities 20072008Taka Notes Contingent Liabilities 18 - -- Acceptances and endorsements Letters of guarantee Irrevocable letters of credit Bills for collection Other contingent liabilities19,627,928,632 / 14,067,628,128 Recent Trend cont---

12. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD Comments:The other liabilities like contingent liabilities and other liabilities have been shown as off balance sheet items and other commitments which we have not come across in our classes. There are many terms which are newer to us than what we have learned from the book. In case of depreciation Bank Asia followed the fixed depreciation on 5% on land and 20% in our case we have learned to calculate the depreciation based on expected service life and initial cost. Here the adjustment is simpler than what we have learned in our class. They have just deducted accumulated cost from the cost of the asset and they have shown the asset after adjustment. CASE STUDY –BANK ASIA AUDIT REPORT PRESENTED BEFORE AGM-2009 Balance Sheet as at 31 December 2008

13. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD Basis of preparation Statement of compliance The financial statements of the Bank have been prepared in accordance with :  Bank Companies Act 1991  other Bangladesh Bank Circulars,  Bangladesh Accounting Standards (BAS)  Bangladesh Financial Reporting Standards (BFRS)  Companies Act 1994,  Securities and Exchange Rules 1987  other prevailing laws and rules applicable in Bangladesh. CASE STUDY –BANK ASIA AUDIT REPORT PRESENTED BEFORE AGM-2009 Balance Sheet as at 31 December 2008

14. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD Basis of preparation Basis of measurement: The financial statements of the Bank have been prepared on the historical cost basis except for the following: -Government Treasury Bills and Bonds (HFT) at present value using marking to market concept -Government Treasury Bills and Bonds (HTM) at present value using amortization concept -Zero Coupon Bond at present value using amortization concept- Quoted ordinary shares at cost or market price whichever is lower at balance sheet date CASE STUDY –BANK ASIA AUDIT REPORT PRESENTED BEFORE AGM-2009

15. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD Basis of preparation Functional and presentation currency: These financial statements are presented in Bangladesh Taka Use of estimates and judgments The preparation of financial statements requires :  Management to make judgments  Estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates  Estimates and underlying assumptions CASE STUDY –BANK ASIA AUDIT REPORT PRESENTED BEFORE AGM-2009 Balance Sheet as at 31 December 2008

16. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD Preparation of the report Bonus share received as dividend had previously been recognized as income in the profit and loss account. In the year 2008 this has been corrected and previous year’s balance has been restated as per BAS 8. During the year 2007 income on treasury bills and bonds had been recognized as income using day count basis. At the end of 2007 such bills and bonds had been revalued using present value method. During the year 2007 loans and advances and interest receivable respectively had not been considered for deferred tax calculation purpose. In the year 2008 the items have been considered and previous year’s balance has been restated as per BAS 8. CASE STUDY –BANK ASIA AUDIT REPORT PRESENTED BEFORE AGM-2009 Balance Sheet as at 31 December 2008

17. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD Deferred tax on temporary difference of depreciation of fixed assets had been calculated using income statement method The Bank had been presenting proposed dividend “both stock and cash” for prior year separately on the face of the balance sheet and statement of changes inequity instead of disclosing by way of a note to the financial statements. CASE STUDY –BANK ASIA AUDIT REPORT PRESENTED BEFORE AGM-2009 Balance Sheet as at 31 December 2008

18. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD Preparation of Cash flow statement Cash flow statement has been prepared in accordance with the Banking Regulation and Policy Department of Bangladesh bank Statement of liquidity The liquidity statement of assets and liabilities as at the reporting date has been prepared on residual maturity term as per the following basis: Balance with other banks and financial institutions money at call and on short notice Investments are on the basis of their maturity terms Loans and advances/investments are on the basis of their repayment schedules CASE STUDY –BANK ASIA AUDIT REPORT PRESENTED BEFORE AGM-2009 Balance Sheet as at 31 December 2008

19. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD Statement of Liquidity-----cont Fixed assets are on the basis of their useful lives Other assets are on the basis of their realization /adjustments Borrowings from other banks, financial institutions and agents as per their maturity/repayment terms Deposits and other accounts are on the basis of their maturity terms and behavioral past trend Other liabilities are on the basis of their payment/ adjustments schedule CASE STUDY –BANK ASIA AUDIT REPORT PRESENTED BEFORE AGM-2009 Balance Sheet as at 31 December 2008

20. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD Basis of consolidation A separate set of records for consolidation of the statement of affairs and profit and loss account of the branches including Islamic banking unit and Off-shore banking unit are maintained at Head Office of the Bank based on which these financial statements have been prepared Foreign currency Foreign currency transactions are converted into equivalent Taka currency at the ruling exchange rates on the respective dates of such transactions. CASE STUDY –BANK ASIA AUDIT REPORT PRESENTED BEFORE AGM-2009 Balance Sheet as at 31 December 2008

21. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD End Summary of Case Study: In case study we have closely monitored the procedures followed by Asia bank. We have seen a number of transactions were unknown or unfamiliar to us. We have also seen the procedures followed by the auditing team is different from what we have learnt in our accounting subject. In balance sheet there is also change in the format also. In book we didn’t come across the term off balance sheet items Adjustment of loans have been adjusted on maturity basis not as a monthly rate basis as we have learnt to adjust to different accrued and deferred items in the financial statement CASE STUDY –BANK ASIA AUDIT REPORT PRESENTED BEFORE AGM-2009 Balance Sheet as at 31 December 2008

22. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD COMPARION  Comparison between theoretical based knowledge and practically followed method by the BANK ASIA PVT LTD on the following subjects are given below:  Income Statement. In the bank Asia report we have seen term has been used as cash flow statement rather mentioning it as a income statement. The transactions are lot of varieties and there is method showing the determination of income out of the maturity basis.

23. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD In book we have come across a limited number of transactions and we have also learned lot of transactions which are quite new to us The other liabilities like contingent liabilities and other liabilities have been shown as off balance sheet items and other commitments which we have not come across. in our classes. There are many terms which are newer to us than that we have learned from the book. In case of depreciation Bank Asia followed the fixed depreciation on 5% on land and 20% in our case we have learned to calculate the depreciation based on expected service life and initial cost. Here the adjustment is simpler than what we have learned in our class. They have just deducted accumulated cost from the cost of the asset and they have shown the asset after adjustment. Balance Sheet. Comparison on Balance Sheet

24. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD COMPARION on Stock Holder’s Equity . The Bank had been presenting proposed dividend “both stock and cash” for prior year separately on the face of the balance sheet and statement of changes in equity instead of disclosing by way of a note to the financial statements. From this year comparative figures have been rearranged as per BAS-1 and BAS-10.How dividend are forecasted has been shown in the change of stock holder’s equity report

25. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD Comparison on Statement of Cash Inflow And Out Flow. Here the details procedures for cash inflow and outflow has been shown The liquidity statement of assets and liabilities as at the reporting date has been prepared on residual maturity term as per the following basis: a) Balance with other banks and financial institutions, money at call and on short notice are on the basis of their maturity terms b) Investments are on the basis of their maturity terms c) Loans and advances/investments are on the basis of their repayment schedules d) Fixed assets are on the basis of their useful lives e) Other assets are on the basis of their realization /adjustments f) Borrowings from other banks, financial institutions and agents as per their maturity/repayment terms g) Deposits and other accounts are on the basis of their maturity terms and behavioural past trend h) Other liabilities are on the basis of their payment/ adjustments schedule

26. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD Comparison on Statement of Cash Inflow And Out Flow. These are elementary entry given in the software in the banking activities. The entry of journal is totally different what we have learned from the book. The entry is software based. However, for developing software one must understand the journal entry procedures.

27. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD Comparison on LEDGER ENTRY This is also the same as we have discussed for Journal entry also. However we learned form our colleagues that banks are using software’s for all these maintaining ledgers and ledger entry. However banks maintain some form of daily entry manually

28. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD 8.0Conclusions. 9.1The subject was basically designed to develop basic skills to the EMBA students so that they can easily assimilate the application of mathematical techniques in solving the business related problems, This paper is basically looked for the theoretical knowledge we have developed in the classes and finding the relevance in finding the practically followed methodology in maintaining the financial transactions and statements. Managers are useful tools in understanding the transactions and preparation of balance sheet, income statement, Cash inflow and outflow statement of any private companies.

29. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD 8.0Conclusions. For better understanding of the subject we have taken a case study of the Bank Asia and we have closely monitored the different transaction procedures outlined there. We have seen the basic concept we have developed from the subject taught in EMB2 classes is much helpful in understanding all these statement related to transactions of the company. However there are prescribed rules and format from Bangladesh banks by which the different statement has been prepared. The other liabilities like contingent liabilities and other liabilities have been shown as offset balance sheet items which is a different from our class room learning..

30. FINDING THE RELEVENCE OF ACCOUNTING FOR MANAGERS SUBJECT IN PRACTICAL FIELD Recommendations Students undergoing courses on “Accounting for Managers” in BUP may be arranged visit to private company in order to find out the methodology followed by different companies in maintaining different financial transactions...

31. CORRELATION BETWEEN STEEL USE AND GDP GROWTH CONSUMPTION SECTORS:  Bridge and Culverts  Railways  Port development  Bus/train station terminal  Power transmission facilities  Tele-communication facilities Steel Consumption In Infrastructure Development