Internship Report Shakil

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
persons knowledge about the concurrent practice of auditing regarding the
NGOs.
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
Advancing Women to Activate on Right and Empowerment Project

Bangladesh
Faculty of Business Studies

University of Dhaka
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.

Bangladesh
List of Acronyms
Acronym
NGO
Full Form
Non Governmental Organization
CA
Chartered Accountant
VAT
Value Added Tax
ICAB
The Institute of Chartered Accountants of Bangladesh
NGOAB
Non-Government
ISA
Bangladesh
International Standards on Auditing
BSA
GAAP
SRA
ICQ
ToR
TA
PM
TDS
PR
Bangladesh Standards on Auditing

Generally Accepted Accounting Principles
Specific Risk Analysis
Internal control questionnaire
Terms of Reference
Travel Allowance
Program Manager
Tax Deducted at Source
Principal Recipient
FIFO
FD- 4
First In First Out

Foreign Donation- 4
Organization
Affairs
Bureau

Bangladesh
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 years 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.

Bangladesh
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

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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.

NGOs 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. NGOs 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 NGOs and making an
evaluation to improve the quality of auditing.
This NGO receive a huge

Bangladesh
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.

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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 NGOs 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.

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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.

Bangladesh
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
"Organizational
Barriers
and
to
management.
NGO
Strategic
(Brown,
David.
Action."
1988.
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


Bangladesh
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


Bangladesh
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:
Name of the audit firm
Syful Shamsul Alam & Co (SSAC)

Chartered Accountants
Date of establishment
06 March, 1993
Paramount Heights (Level-6)
65/2/1 Purana Paltan
Dhaka-1000. Bangladesh
Tel: +88(02)9555915,
+88(0
2)951
5431,
Corporate office
+88(02)9515491
Fax: +88(02)9560332
Dhaka office
Dilkusha C/A (6th Floor)

Dhaka-1000, Bangladesh
Tel: +88(02)9572217
Chittagong office
Bashar squrae (M. Court), 5th Floor

108, Agrabad, Chittagong.

Bangladesh
Phone: +8801819380455
3.2 Manpower Strength

Sl.
Personnel
01.
02.
Partners
Professional Staff:
- Senior Director-Taxation
- Director-Audit & Consultancy (Chartered Accountant)
- Deputy Manager-Taxation & Corporate Affairs
- Deputy Manager-Audit & Consultancy
- Senior Assistant Manager-Audit & Consultancy
- Senior Assistant Manager-Taxation & Corporate Affairs
- Assistant Manager-Audit & Consultancy
- Assistant Manager-Taxation & Corporate Affairs
- Executive and Junior Executive-Audit, Consultancy &
Taxation
Articled Students
Interns
Supporting Staff
Total
03.
04.
05.
Numb
er
08
01
01
01
06
04
02
03
03
07
90
15
20
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.

Bangladesh
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.

Bangladesh
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.

Bangladesh
(b) Following are a few of the major category of clients receiving

SSACs services
Manufacturing and
Trading
Energy and
Telecommunications
Non-profit
organizations
Apparel
Oil and gas
Engineering
Power and power
NGOs
Cement
generation
Telecommunicatio
n
Mining.
Charitable
Fabricated
products
Pharmaceuticals
Garments
/
textiles
Food products
Commercial
organization
Universities
Finance
services
Banking
Courier and
cargo services
Hospitals
Airlines
Hotels
Investment
Insurance
Capital Market.
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.

Bangladesh
Chapter Four: Audit Procedures for NGOs followed by

SSAC
4.1 Engagement Procedures
Before discussing the audit procedures followed by SSAC, Ive 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 papers 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.

Bangladesh
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
organizations
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 firms 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

Bangladesh
consultancy services that are innovative, efficient and most importantly

responsive to the NGOs 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 Firms 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
Firms 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)
b)
Mistakes in gathering or processing accounting data from which

financial statements are prepared.
Incorrect accounting estimates arising from oversight or
misinterpretation of facts and;

Bangladesh
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 managements 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:

Bangladesh
Sound working relationship

Understanding NGOs 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 NGOs operation for the
purpose of:
Understanding the NGOs 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 NGOs 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, SSACs 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

Bangladesh
As external auditor, auditor should identify the NGOs 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, Ive established an acceptable materiality level
so as to detect quantitatively material misstatements.
4.2.3 Assess General Risks
During audit planning and risk assessment, Ive 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 entitys 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. Managements style, outlook;
3. Significant current events and reporting issues;

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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
functions1. 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
i.
ii.
iii.
audit plan
Select substantive audit procedures- Detection risk
Develop work programs
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.

Bangladesh
In SSAC, Ive 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.

Bangladesh
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
1) Cash Receipts Test
2) Cash Disbursement Test

3) Payroll Test
Account level test covered

Cash, Bank, Sales, Revenue,
Receivables.
Cash, Bank, Inventory, Purchase,
Fixed Assets, Payables, Expenses.
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

Bangladesh
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
entitys 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 auditors 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.

Bangladesh
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 Auditors

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/ Auditors report:
Basic elements
The auditors 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 entitys 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;

Bangladesh
f.
Date of the report;
g. Auditors address; and

h. Auditors 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

Bangladesh
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. Auditors address; and
i. Auditors 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.

Bangladesh
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 Auditors 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 NGOs 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.
ii.
iii.
iv.
v.
Entrance meeting with management of the project;

Audit planning-ascertaining the scope and extent of audit work,
preparation of work program and selection of skilled and
competent audit team;
Reviewing and assessing the internal control environment;
Reviewing and assessing the accounting system;
Contacting and interviewing the program officials as well as
beneficiaries through field visits;

Bangladesh
vi.
vii.
viii.
ix.
x.
Supervising and reviewing of audit work by senior audit

personnel;
Periodic discussion with the management on audit observations
and disposal thereof;
Submission of draft audit report and letter to management;
Discussion on draft report and exit meeting;
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:

Bangladesh
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 selfdeveloped 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 Peoples 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

Bangladesh
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 womens 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 womens 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 childrens aptitude through education and cultural programs.
5.2 Basis of preparation

5.2.1 Statement of Compliance

Bangladesh
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 organizations 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

Bangladesh
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
Taka
2010
Taka
379,02
0
496,344
Property & Assets

Fixed Assets
Ann-AA

Bangladesh
379,0
20
496,344
Current assets
Cash with Bank balance
4.00
35,121
57,295
Total current assets (A)
Less: Current liabilities
Provision for expenses
57,29
5
35,121
25,00
0
21,000
5.00
21,000
25,000
Total Current liabilities (B)

25,00
0
21,000
32,29
5
14,121
411,3
15
510,465
Net current assets (A-B)
Total assets
Fund account
Capital fund
6.00
510,466
411,31
4
Total capital fund

411,3
14
5.5.1 Balance Sheet
5.5.2 Statement of Income & Expenditure

510,466

Bangladesh
SKS Foundation
Statement of Income and Expenditure
For the year ended from 01 January to 31 December 2011
Note
Income
Grants income
2011
Taka
7.00
2010
Taka
2,659,012
2,485,879
Total income
2,485,879
Expenditures
Personnel cost
8.00
Seminar/ Workshop/ Conferences
9.00
Program Cost
10.00
Training cost
11.00
Office Stationary & Cell phone bill
12.00
Traveling allowances
13.00
Office expenses
14.00
Others (Audit fee)
15.00
Depreciation
Total expenditure
Excess of income over expenditure

transferred to capital fund
Ann-AA
2,659,012
1,730,17
1,702,976
6
57,23
107,161
8
337,99
376,848
8
19,68
166,177
2
85,66
64,296
3
73,59
15,036
0
88,35
77,874
8
25,00
21,000
0
167,32
99,435
6
2,585,0
31
2,630,803
(99,152)
28,209

Bangladesh
5.5.3 Statement of Receipts and Payments
SKS Foundation
Statement of Receipts and Payments
For the year ended from 01 January to 31 December 2011
Note
2011
Taka
2010
Taka
15,032
7.
00
16.0
0
35,
121
2,485,
879
313,
000
Receipts
Opening Cash in hand & Bank
Grants received
Loan Received
Total grants received
2,659,012
95,000
2,834
,000
2,769,044
1,730,
176
57,
238
337,
998
19,
682
85,
663
73,
590
88,
358
1,702,976
Payments
Personnel cost
Seminar/ Workshop/ Conferences
Program Cost
Training cost
Office expenses
Others (Audit fee)
Loan Payment
Capital Cost
8.
00
9.
00
10.0
0
11.0
0
12.0
0
13.0
0
14.0
0
15.0
0
17.0
0
18.0
0
107,161
376,848
166,177
64,296
15,036
77,874
-
313,
000
50,
000
95,000
128,555

Bangladesh
Last Year Audit fee Payment
Total payments
Closing balance (A-B)
21,
000
2,776
,705
2,733,92
3
57
,295
35,12
1
5.5.4 Notes to the Financial Statement
Cash with Bank balance

4.00
Bank balance
Amount in
Taka
31 Dec
2011
Amount in
Taka
31 Dec
2010
57
,295
5
7,295
35,121
35,121
Name of Bank: Sonali Bank Limited

Account No.: 1192 Current
Branch: Fulchari, Gaibandha
Provision for expenses
5.00
Audit fee
25
,000
2
5,000
21,000
21,000
Capital fund
6.00
Opening capital
Excess of income over expenditure
510
,466
(99,152)
41
1,314
Grants received from AAB

7.00
482,256
28,210
510,466

Bangladesh
The following amount was received from AAB through Sonali Bank Limited,
Varotkhali Branch, Gaibandha through AAB Bank Account no. 009-062795011 on the following dates:
Received date
28.04.11
01.08.11
30.10.11
1,203,695
699
,644
582
,540
2,485,879
1,484,968
872,051
301,993
2,659,012
Personnel Cost
8.00
Director (Partly)
Managerial
Skilled
As per statement of income &
expenditure
106
,574
319
,748
1,303,854
1,730,176
96,889
290,680
1,315,407
1,702,976
Seminar/ Workshop/ Conference

9.00
Quarterly Meetings of Community
Journalist Group
Sponsorship PRRP Community
Discussion
Entrepreneurship development Meeting
Linkage with different service providers
Quarterly Producer group meeting
(snacks)
Women linkage with local market
Khas land follow up meeting
Open Budget, Meeting, gathering at
union level
Meeting with UP standing committee
Participatory plans and budget
Participatory review & reflection process
workshop
Yearly planning workshop and review
meeting
Monthly program staff meeting
National and International day
observation
Lokokendra forum meeting
Lokokendra wise planning workshop
Awareness on Disaster preparedness
Spouse/ Guardian forum meeting
Follow up of dialog session on right to
1,795
5,995
240
990
1,981
1,000
596
1,235
3,520
1,892
1,972
5,000
5,335
28,001
2,640
900
1,147
7,690
3,556
1,510
11,996
6,845
10,467
24,898
742
1,030
496
1,460
2,288
6,390
-

Bangladesh
know the information
Court yard session for 2 adolescent group
School level orientation
Meeting with UP NNPC
Monthly refresher meeting for center
facilitator
490
1,450
464
9,304
57
,238
5
7,238
4,149
4,935
107,161
107,161
Program Cost
10.0
0
CM Materials
28,946
49,702
8,897
Local Travel cost per month Tk. 700.

Refreshment for children for CM
Community news letter
Children Emergency Fund
Administrative Equipments Maintenance
Nursery activity
Sapling follow up
Vegetable cultivation follow up
Road side tree plantation
Upazila and District level Mela
Seed collection and preservation
Reflect Materials cost
Communication cost for PO, LM
House Rent for lokokendra
Mini library
Field visit of Govt. Service provider
Govt. service camp at Lokokendra level
7,000
7,979
8,008
2,996
8,495
1,000
200
187
485
850
998
2,362
6,586
12,000
498
1,000
1,000
4,995
3,936
48,934
10,900
-
Linkage with govt. department for skill

training
Facilitator Honorarium ( learning centre)
500
143,507
61,653
20,418
4,972
620
22,406
52,800
5,000
5,460
174,322
376,848
Child Photo/ Profile
Child Material
Sports materials for shishu kendra
Participating in local level cultural
program
House Rent for shishu kendra
Sponsorship children scholarship
Annual sports
Child Center Formed
Total Program Cost
337
,998
33
7,998
376,848

Bangladesh
Training cost
11.0
0
Women Leadership Training
Women Leadership Follow up Training
Others training
12,182
7,500
1
9,682
74,952
48,147
43,078
166,177
34
,273
51
,390
8
5,663

12.0
0
Printing, stationery & photocopy
Phone, fax, internet etc.
As per statement of receipts & payments
64,296
64,296
13.0
0
Local travel & outstation travel
Fuel
Repair & Maintenance
54
,507
13
,261
5
,822
7
3,590
11,004
4,032
15,036
Office expenses
14.0
0
Cleaning Materials
Electricity Bill
IPS Battery
Misc. Exp
News Paper
Partner's Office Rent
Bank charges
1
,562
7
,200
7
,534
7
,587
3
,044
55
,200
6
,231
14,375
8,299
55,200
-

Bangladesh
8
8,358
77,874
25
,000
21,000
2
5,000
21,000
25
,000
21,000
Others(Audit Fee)
15.0
0
Audit fee
expenditure
Less: Provision for audit fee
Loan Received
16.0
0
SKS Gaibandha-GF
313
,000
31
3,000
95,000
95,000
Loan Payment
17.0
0
SKS Gaibandha-GF
313
,000
31
3,000
95,000
95,000
Capital Cost
18.0
0
Motorcycle
110,600
-
Electric Equipment
12,505
-
Lokokendra Furniture & Fixture

Tally Software
5,450
50
,000
5
0,000
128,555

Bangladesh
SKS Foundation
Advancing Women to Activate on Right and
Empowerment Project
For the year ended from 01 January to 31
December 2011
Figure
Taka
in

Bangladesh
Chapter Six: Terms of Reference (ToR); Requirements and

Compliance

Bangladesh
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:

Bangladesh
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 selfdeveloped 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

Bangladesh
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 Peoples 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 womens 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 womens 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 childrens 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:

Bangladesh
Fulchari Upazila in Gaibandha District.

No.
v) Number of personnel (Local):
Director (Partly)
Cost
106,574
Managerial
319,748
Skilled
14
1,303,854

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 Empowerment Project
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
3 Year
Date: 05/04/2011; Memo No:ABBU/PRO5/SKS Fou:/100-11/2011-1007
Date: 05/04/2011; Memo No:ABBU/PRO5/SKS Fou:/100-11/2011-1007
Amount of released fund (with installments)

No. of
Installm
ent
Date
28.04.11
01.08.11
30.10.11
Amount of received donation

Whether the foreign donation
received in the mother account
before releasing the fund or
not?
Audit Year
Project Area
Amount
Total
1,20
3,695
69
9,644
58
2,540
2,485,879
2,485,879
Yes.
1st January to 31st December 2011

Fulchari, Gaibandha.

Bangladesh
Number of Beneficiary
The date of appointment of
auditor for Audit purpose
Participants of the project are women

1255, child 690 and 472 sponsored
child of them and adolescents are 66
and total number is 2011.
October 17, 2011
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:

Bangladesh
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 auditors 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 auditors 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:

Bangladesh
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

Bangladesh
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
28.04.2011
Taka
1,2
03,695
01.08.2011
6
99,644
30.10.2011
5
82,540
2,4
85,879
The details of the banks, and the balances as at December 31, 2011 were as follows:
Name of Bank
Sonali Bank Limited , Fulchari,

Gaibandha
Current A/C No. A/C No-1192/5
(Mother account)
Sonali Bank Limited , Kurigram
STD A/C No-3998/37
Bank
reconcili
on
perform
and
checke
Balance as per bank

Statement as at
December 31, 2011
Balance as per
project bank book
as at December 31,
2011
Nill
Nill
No
91,420
57,295
Yes

Bangladesh
(Operational account)
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.

Bangladesh
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 NGOs 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)

Bangladesh
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.

Bangladesh
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.
Sl. No.
&
Subject
Deductable
Amount(Tk)
Deducted
Amount(Tk)
Deposited
Amount in
Treasury(Tk)
Due
Amount
2-3=5
13755
13755
13755
02. IT
1785
1785
1785
Total
15542
15543
15544
01. VAT
Statement on whether the NGO as a legal entity as per Income Tax

Ordinance 1984 submitted income tax return accordingly.
Compliance:

Bangladesh
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
Gaibandha
Project Office in
Agreement
Period
01/01/2011
Name of Landlord
Tahmina Begum Simu
Monthly Rent
Taka
4186

Bangladesh
Fulchari
Gaibandha
Shisu Kendra
Shisu Kendra
Shisu Kendra
Shisu Kendra
Shisu Kendra
Shisu Kendra
Shisu Kendra
Shisu Kendra
Shisu Kendra
Shisu Kendra
Shisu Kendra
Shisu Kendra
Shisu Kendra
Shisu Kendra
to
01/12/2011
01/07/2011
to
01/12/2011
01/01/2011
to
01/12/2011
01/01/2011
to
01/12/2011
01/01/2011
to
01/12/2011
01/01/2011
to
01/12/2011
01/01/2011
to
01/12/2011
01/01/2011
to
01/12/2011
01/01/2011
to
01/12/2011
01/01/2011
to
01/12/2011
01/01/2011
to
01/12/2011
01/01/2011
to
01/12/2011
01/01/2011
to
01/12/2011
01/01/2011
to
01/12/2011
01/01/2011
to
01/12/2011
Md. Mokbul Hossen
400
Md. Saju Mia
400
Nahida
400
Ayna
400
Rahima
400
Md. Abdus Salam
400
Jobeda
400
Babee
400
Moslema
400
Shefali
400
Mariom
400
Md Amjad
400
Habeda
500
Farjana
500
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

Bangladesh
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.
01
02
03
04
05
06
07
Name of the Member

Murshed Alam Sarkar
Md. Mosharof Hosen Khan
Rasel Ahmed Liton
Prity Dey
Rafiqul Islam Sarkar
Nishat Nahar
Md. Aiyub Ali
Designation
President
Vice-President
Chief Executive
Manager
Member
Member
Member
Statement on whether the cost of project audit has been incurred from the
project fund or not.
Compliance:

Bangladesh
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:
Firms 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 fiveyear 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
Expenditure
Differences
Amount as
per
Approved
budget
Amount
actually Paid
Differences if any with reason

Bangladesh
(As per
Annexure-A of
project
proforma)
2,500,000
2,467,705
The remaining balance of Tk

52,295 is 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
(b) Local
Nil
Nil
(v) Revolving loan fund, if any:
Nil
(vi) Training, if any:

(a) Field duration
Nil
(b) Number of Trainees

(vii) Seminar/Workshop/Conferences
Nil
57,238

Bangladesh
(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

(xiii) Custom duty and Sales Tax (CDST)
73,590
Nil
(xiv) Head Office and Branch Offices expenses

charged
(xv) Contingency
(xvi) Others(Audit Fee)
Total
118,821
Nil
25000
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.

Bangladesh
ANNEXURE (Annexure A/1)

Bangladesh

Bangladesh

Bangladesh
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.

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

3rd May, 2012

Muhammad Firoz Mahmud

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

Faculty of Business Studies

Advancing Women to Activate on Right and Empowerment Project

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

Value Added Tax

The Institute of Chartered Accountants of Bangladesh

Bangladesh Standards on Auditing

First In First Out

Advancing Women to Activate on Right and Empowerment Project

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

Audit procedure is mainly a step by step approach. As this is a case study

Advancing Women to Activate on Right and Empowerment Project

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

The auditing profession has contributed and will be contributing a greater

Advancing Women to Activate on Right and Empowerment Project

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

Chapter One: Preamble

governmental activities do not fully benefit the people of the country.

This NGO receive a huge

Advancing Women to Activate on Right and Empowerment Project

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

amount of Donations which are transmitted to Sub-recipients NGOs and

contribution to the development of the country is an important aspect of

Gaining practical knowledge and experience on how a chartered

Advancing Women to Activate on Right and Empowerment Project

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

Understanding the field level problems related to the implementation

different organizations and plausible recommendations.

1.3 Methodology of collecting Information

Advancing Women to Activate on Right and Empowerment Project

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

1.4 Limitation of the study:

As the internship was the first practical experience, it was not

Also it became difficult for me to be efficient in handling the

Chapter Two: Literature Review

NGO means non government organization (Peter Willetts.2011). NGOs are

Advancing Women to Activate on Right and Empowerment Project

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

development research, Boston, 10 pp.)

information to determine and report on the degree of correspondence

Similarly, all books of accounts maintained by a non-government

disincentives that can be instituted in this regard. Lloyd R. and L. delas

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

Casas, (2005) investigate NGO self-regulation and its impact on enforcing

management and information disclosure. It is related to issues such as

strategic; and observed that accountability in practice has emphasized

Chapter Three: Profile of SSAC

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

Name of the audit firm

Syful Shamsul Alam & Co (SSAC)

Dilkusha C/A (6th Floor)

Bashar squrae (M. Court), 5th Floor

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

3.2 Manpower Strength

3.3 Role of the Personnel:

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

iv. Senior student:

3.4 Non Professional Staff:

Services offered cover the following areas

Advancing Women to Activate on Right and Empowerment Project

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