Audit procedure and cash incentive calculation

“The Audit procedure and cash incentive calculation of

Agro processing sector in Bangladesh -
An analysis based on Aziz Halim Khair Choudhury
Chartered Accountants”

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 Audit procedure and cash incentive calculation

Report
On:

“The Audit procedure and cash incentive calculation of Agro processing sector in
Bangladesh -
An analysis based on Aziz Halim Khair Choudhury Chartered Accountants”

Prepared By

Sadia Afrin

ID: 16202033
Course Name: Practicum
Course Code: BUS - 490

Prepared For

Prof. Dr. Khair Jahan Sogra

Professor& Dean
College of Business Administration

Submission Date: May 05, 2020

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 Audit procedure and cash incentive calculation

Letter of Transmittal

May 05, 2020

Prof. Dr. Khair Jahan Sogra
Professor& Dean
College of Business Administration
IUBAT – International University of Business, Agriculture & Technology

4, Embankment Drive Road, Uttara Model Town, Sector #10, Dhaka-1230

Subject: Submission of practicum report.

Dear Sir/Madam,
With respect to you informing that, it is my great pleasure that today I am submitting my
practicum report on the audit procedure and cash incentive calculation of agro processing
sector in Bangladesh -an analysis based on Aziz Halim KhairChoudhury Chartered
Accountants. The main goal of preparing this practicum report is to identify the ways in
which we had to compute the actual amount of cash incentives the applicant is qualified to
receive against the claim that they demand to the Bangladesh Bank. Though I faced some
difficulties to collect information in order to complete my report, I tried from my heart and
soul to do it in an acceptable way to achieve my aim. Now I need the permission of you to
present it.

So, I am requesting you humbly to give me the permission to present my full practicum
report and have the way smoother to my academic career and oblige thereby.

Yours Sincerely,

Sadia Afrin

ID: 16202033

Program: BBA

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 Audit procedure and cash incentive calculation

Acknowledgement

At first, I would like to express my gratefulness to the Almighty Allah for being so kind to
allow me to work on this practicum project successively. I am Sadia Afrin to express my
heartiest gratitude to those who helped me all the way through to completion of my internship
report the audit procedure and cash incentive calculation of agro processing sector in
Bangladesh -an analysis based on Aziz Halim Khair Choudhury Chartered Accountants. At
the very beginning, I would like to thank my academic supervisor Saima Rahman, Faculty of
IUBAT-International University of Business Agriculture and Technology, who encouraged
me to make this report and provide me all necessary helps and guidance.
I would like to convey my gratitude to Aziz Halim Khair Choudhury Chartered Accountants
where I have completed my internship program as required as a course curriculum to prepare
this report. I have acquired experience from the Aziz Halim Khair Choudhury Chartered
Accountants, which truly amplified my level of competency during my working period. It
would not have been possible for me to complete this internship successfully without the help
of Runa Talukdar - (Deputy Director of Audit & Assurance). I want to give special thanks to
the entire employee and article ship students of Aziz Halim Khair Choudhury Chartered
Accountants.

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 Audit procedure and cash incentive calculation

Student Declaration

I am Sadia Afrin, ID: 16202033 a student of Bachelor of Business Administration hereby

declare that the submitted report of internship titled the audit procedure and cash incentive
calculation of agro processing sector in Bangladesh -an analysis based on Aziz Halim Khair
Choudhury Chartered Accountants is uniquely prepared by me after the completion of my 12
weeks at Aziz Halim Khair Choudhury Chartered Accountants.
I also confirm that this report is only prepared for my academic requirement, not for any other
purpose.

…………………..
Sadia Afrin
ID: 16202033
Program: BBA

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 Audit procedure and cash incentive calculation

Supervisor’s Declaration

I acknowledge that Sadia Afrin has prepared and completed the report titled “The Audit
procedure and cash incentive calculation of Agro processing sector in Bangladesh -An
analysis based on Aziz Halim Khair Choudhury Chartered Accountants” under my
supervision and in accordance to the guidelines laid down by the College of Business
Administration (CBA), IUBAT.

Signature:

Date: 04/05/2020

Saima Rahman
Senior Lecturer
College of Business Administration (CBA)
International University of Business Agriculture and Technology (IUBAT)

4 Embankment Drive Road, Sector-10, Uttara, Dhaka-1230, Bangladesh.

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 Audit procedure and cash incentive calculation

Executive Summary

This report covers an overall idea of Audit procedure on Cash incentive of agro processing
sector. In introductory part I have discuss about the objectives, scope, and limitation.

In the organization part I have tried to cover the background of the organization, services,
mission & vision, SWOT analysis, Porters five forces analysis and financial performance of
the organization.

After that in my topic part I have discuss about the Cash incentive, audit procedure of cash
incentive, discuss about agro processing sector , product of agro processing sector , its
importance and demand in foreign market also benefits of agro processing. I have shown few
important documents that required for export the agro products with cash incentive files and
the procedure for checking the terms and conditions as well as the policies of Bangladesh
Bank that how an applicant applies for the actual amount of cash incentives and the applicant
is qualified to receive against the claim that they demand to the Bangladesh Bank.

Afterward in actual task part I have discuss my internship background, internship experience,
duties and responsibilities with primary and secondary learning areas.

In research part I discussed about the problems that firm may face at the time of audit and
create some hypothesis for the problems. And give the decision on the basis of relevant
respondent’s opinion. Then I suggested few solutions to overcome the problems.

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 Audit procedure and cash incentive calculation

Table of Contents
1. Introductory part ............................................................................................................ 2
1.1 Introduction of the report: ............................................................................................ 2
1.2Research Aim: .............................................................................................................. 2
1.3 Research objectives...................................................................................................... 2
1.4 Scope of the study:....................................................................................................... 3
1.5 Limitation of the study: ................................................................................................ 3
2. Organizational Part ......................................................................................................... 6
2.1 Background of the CA firm: ......................................................................................... 6
2.2 Corporate information of the CA Firm: ........................................................................ 6
2.3 Corporate Governance: ................................................................................................ 7
2.4 Corporate Hierarchy: ................................................................................................... 7
Figure 1: Corporate Hierarchy........................................................................................... 7
2.5 PKF international ......................................................................................................... 8
2.6 AHKC - Vision ............................................................................................................ 8
2.7 AHKC - Mission .......................................................................................................... 8
2.8 AHKC – Goals ............................................................................................................ 8
2.9 AHKC CA firm work force:......................................................................................... 8
2.10 Services of the CA firm: ............................................................................................ 9
2.11 What does AHKC offer? ...........................................................................................10
2.12 Clients of AHKC Chartered Accountants from different sectors: ...............................11
2.13 Cost effective and quality assured services from AHKC ...........................................13
2.14 AHKC firm important enlistments: ...........................................................................13
2.15 Human Resources of all AHKC Branch: ...................................................................14
2.16 For AHKC - Uttara Branch: ......................................................................................15
2.17 AHKC CA firm clients: ............................................................................................15
Banks ........................................................................................................................15
Non banking financial institutions .............................................................................15
Other financial institutions .........................................................................................15
Bangladesh steel & engineering corporation (BSEC) .................................................15
Bangladesh textile mills corporation (BTMC)............................................................15
Bangladesh jute mills corporation (BJMC) ................................................................15
Bangladesh sugar & food industries corporation (BSFIC) ..........................................15
Bangladesh petroleum corporation (BPC): .................................................................15
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 Audit procedure and cash incentive calculation

2.18 AHKC CA firm internal audit Sectors: ......................................................................16

Educational institutions.......................................................................................... 16
Universities ...............................................................................................................16
Educational consultancies ..........................................................................................16
Tea gardens ...............................................................................................................16
Hospitals and pharmaceuticals ...................................................................................16
2.19 Porter’s five forces model: ........................................................................................16
2.20 SWOT Analysis: .......................................................................................................17
Table 5: SWOT Analysis ..................................................................................................18
2.21 Internal factor Evaluation (IFE): ...............................................................................19
2.22 External Factors Evaluation-(EFE):...........................................................................20
2.23 Financial Performance: .............................................................................................20
3. Topic Part ...................................................................................................................... 23
3.1 Cash Incentive: ...........................................................................................................23
3.2 Procedure of Cash Incentive: ......................................................................................23
3.3 Agro Processing:.........................................................................................................24
3.4 History of Agro Sector: ...............................................................................................24
3.5 Demand of Agro sector in Foreign Market: .................................................................25
3.6 List of Eligible Agro-Processed Products for incentive: ..............................................25
3.7 Importance of Agro-Processing Industries: .................................................................25
3.8 Benefits of Agro-Processing ...................................................................................... 26
3.9 Required documents in Agro file: ...............................................................................26
3.9.1 Party Calculation Page: ........................................................................................... 27
3.9.2 Bank Recommended Calculation: ........................................................................... 28
3.9.3 FE Circular Document: ........................................................................................... 29
3.9.4 PRC Certificate: ...................................................................................................... 31
3.9.5 BAPA Certificate :( Bangladesh Agro processor association) .................................. 32
3.9.6 Application Form: ................................................................................................... 33
3.9.7 Sales Contract: ........................................................................................................ 33
3.9.8 Commercial Invoice/Export Invoice: ....................................................................... 34
3.9.9 Packing List: ........................................................................................................... 35
3.9.10 Bill of Lading: ...................................................................................................... 36
3.9.11 EXP Form: ............................................................................................................ 37
3.9.12 Bill of Entry/ Export: ............................................................................................ 40
8.9.13 Freight Certificate: ................................................................................................ 41

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8.10How to prepare agro top sheet (1st Page): ...................................................................41

8.10.1 Financial Year:...................................................................................................... 43
8.10.2 Maximum duration: .............................................................................................. 43
8.10.3 Short-realization: .................................................................................................. 43
8.10.4 Applicant amount .................................................................................................. 43
8.10.5 Recommend Amount: ........................................................................................... 43
8.10.6 Approved Amount: ............................................................................................... 43
8.11 How to do Calculation of the top sheet (2nd page): ....................................................44
8.12 How to marking the page number of agro file (3rd Page): ..........................................45
8.12.1 Interpretation: ....................................................................................................... 45
8.13 Verifying and auditing the documents of the File and top sheet: ................................46
8.14 Proof Read: ...............................................................................................................46
4. Actual Task Part ........................................................................................................... 48
4.1 My Internship Background..........................................................................................48
4.2 Internship Experience: ................................................................................................48
4.3 Duties and responsibilities: .........................................................................................49
5. Research Part ................................................................................................................ 52
5.1 Problem Statement: .....................................................................................................52
5.2 Background of the Problem: .......................................................................................52
5.3 Project Timeline .........................................................................................................53
Table 9: Project Timeline..................................................................................................53
5.4 Budgeted Information: ................................................................................................53
Table 10: Budgeted Information .......................................................................................53
5.5 Research Methodology: ..............................................................................................54
5.5.1 Research Approach: ................................................................................................ 54
5. 5.2 Population of sampling method .............................................................................. 54
5.5.3 Research Instrument: Descriptive. ........................................................................... 54
5.5.4 Type of Research .................................................................................................... 54
5.5.5 Data source: ............................................................................................................ 54
5.6 Research Limitation: ...................................................................................................55
5.7 Data Analysis: ............................................................................................................56
5.7.1 The following formula has been followed: .............................................................. 56
5.7.2Data Interpretation: .................................................................................................. 56
5.8 Hypothesis Development: .......................................................................................... 58
5.8.1Hypothesis Testing: ................................................................................................. 58

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5.8.4 Hypothesis 3: .......................................................................................................... 64

5.8.5 Hypothesis 4: .......................................................................................................... 67
5.8.6 Hypothesis 5: .......................................................................................................... 70
5.8.8 Recommendations: .................................................................................................. 74
5.8.9 Conclusion: ............................................................................................................. 75
5.8.10 References: ........................................................................................................... 76

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Part 1
Introductory Part

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 Audit procedure and cash incentive calculation

1. Introductory part

1.1 Introduction of the report:

Internship is an opportunity where a student can have a practical knowledge or experience by

working in an organization. In order to have an experience, I am the student of CBA (College
of Business Administration, IUBAT University have to undertake twelve-week internship
program at any organization. As a part of my BBA program, this internship program gave me
the opportunity to gain practical knowledge. I choose AHKC Chartered Accountants firm
which is no 8th position CA firm in Bangladesh. I have worked in Verification of alternative
cash Incentive department of AHKC Chartered Accountants.

As I have worked in Calculation & Verification of alternative cash incentive department,

which I choose to complete my internship report. This study helps me to observe and perform
the audit procedure of Calculation & Verification of alternative cash incentive department.
There have some sectors in Bangladesh where Government provides cash incentive for
exporters. In which sectors are eligible for cash incentive or subsidy Bangladesh Bank release
the circular for each and every financial year.

In this report I will try to give overall activity of Procedure and verification on Cash Incentive
of agro processing sector in Bangladesh by showing some authentic document and valuable
information. And I will discuss about the problem about cash incentive procedure to prepare
file during the audit period.

1.2Research Aim:

The aim of the study is to know about the cash incentive on export product of agro processing
sector in Bangladesh.

1.3 Research objectives

Broad Objective:
The broad objective of this report is to gather proper knowledge about cash incentive
procedures for agro sector in Bangladesh.

Specific Objectives:
 To know how Bangladesh government provides cash incentive facility for Agro
sector.

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 To describe the overall cash incentive calculation procedure in agro sector.

 To identify the major constraints or problems faced by an auditor when He or She
audit the Agro file.

 To know how a chartered accountants Firm performs an audit activities in agro

sector.

1.4 Scope of the study:

I have been assigned Aziz Halim KhairChoudhury(AHKC) chartered accountant firm that
gave me tremendous scope to familiarize with the cash incentive/subsidy procedures of the
organization. Aziz Halim Khair Choudhury - AHKC is one of the leading firms of Chartered
Accountants and Business Advisors in Bangladesh. The firm’s main service is to audit
different sectors like Agro processing, Jute, textile, fish and many other sectors. So, it is a
great opportunity for me to be the part of this firm as an internee. Major parts of scope are
point out below:

 Cash incentive procedures of Aziz Halim Khair Choudhury Chartered Accountants -

(AHKC).
 Prepare files and calculate cash incentive.
 Calculate cash subsidy for the exporter who face loss in their export activities.
 Prepare new market exploration files and calculate how much incentive they get for
explore their market globally.
 Prepare composite sector, textile sector files and calculate how much incentive they
get for export their local product globally.
 Check files.

1.5 Limitation of the study:

The study is conducted with an objective to make a thorough study of cash incentive/subsidy
procedure. I have got many facilities and also faced some limitations during my study. These
limitations are as follows:

 Due to Corona virus time was very limited for me to collect all necessary information.
 As the internship is my first practical experience, it is not possible for me to know
everything of cash incentive audit procedures.

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 As intern, I can verify only the documents submitted by the applicant by following the
application, but we cannot verify whether those documents we recollected in fair way
or not.
 There are many important matters that were directly conducted by the top
management level which may also gave some sort of restrictions.

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Part 2
Organization Part

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2. Organizational Part

2.1 Background of the CA firm:

Aziz Halim Khair Choudhury - AHKC - is one of the leading firms of Chartered Accountants
and Business Advisors in Bangladesh. Having established in 1979, the Firm has over 41 years
of professional relationship with different leading Business Houses in Bangladesh and
abroad.

2.2 Corporate information of the CA Firm:

Name of organization Aziz Halim Khair Choudhury – AHKC

Chartered Accountant

Founded 1979

Chairman M A HALIM GAZNAVI ,FCA

Headquarters House no:64(1st& 2nd floor road # 12A,

New), Dhanmondi, Dhaka 1209

Total number of employees Around 350

Industries Accounting

Type Partnership

Specialties Accounting, Auditing, Taxation, Advisory,

Internal Control, Internal Audit, Special
Audit, Valuation
Contact detail
Phone: +880 2 55080235, 55080236
Fax: +880 2 55080237
Email: [email protected]
[email protected]

Website
www.ahkcbd.com

Table 1: Corporate information

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2.3 Corporate Governance:

SL No. Name Designation

1. M A Halim Gaznavi FCA Chairman
2. Khairul Alam FCA Managing
Partner
3. Dr. Jamshed S A Choudhury DR.rer.POL (Heidelberg), Senior Partner
FCA
4. Md. Aftab Uddin Ahmed FCA Senior Partner
5. Mofazzal Hossain Khan FCA Partner
6. Khairul Basher FCA Senior Partner
7. NaymaMeherin FCA Partner

Table 2: Corporate Governance

2.4 Corporate Hierarchy:

Figure 1: Corporate Hierarchy

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2.5 PKF international

PKF International administers the PKF network a family of legally independent member
firms. PKF International is the 10th largest global accountancy network and has 300 member
firms and correspondents in 440 locations in around 125 countries providing accounting and
business advisory services.

2.6 AHKC - Vision

To be recognized as the first choice for business houses & other organizations in their
selection of professional advisers and as the best alternative to their existing service provider.

2.7 AHKC - Mission

To provide clients with a quality service that focuses on the specific needs of each client -
addressing business problems with creative solutions grounded in practical experience and
high levels of expertise. We are committed to the values of integrity, professionalism and
independence.

2.8 AHKC – Goals

 Maintain superior quality of services to existing clients and expand the range of these
services.
 Be fair, ethical and honest in all business transactions.
 Maintain a high level of motivation, professional development and satisfaction for all
personnel.
 Continue growth in number, size and quality of clients.

2.9 AHKC CA firm work force:

They are a vibrant team of seven partners and a well-groomed assisting staff, guided by the
principle of Hard Work, Discipline and Clients Care, leveraging entirely on vast experiences
of our team. With members in different fields and strong back office set up, they provide an
excellent service in all areas of business. They pride their selves on their wealth of intellectual
resources.

The intellectual depth, extensive experiences and in depth knowledge of business

environment brought by our partners who are highly experienced individuals in all areas of
business, finance and regulatory realm in Bangladesh, have uniquely positioned us in their
profession.

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2.10 Services of the CA firm:

AHKC Services:

 Assurance and Advisory Services

 Taxation
 Corporate Finance
 Forensic Accounting
 Investigations
 Secretarial Services
 Management Consultancy

Aziz Halim Khair Choudhury - AHKC - Chartered Accountants has expertise in the
following main service areas in details are given below:

 Assurance
As decision makers, clients have to be assured that they are acting on reliable information.
They need to be aware of their business risks and know that they are managed effectively,
and to have faith and confidence in their underlying systems and controls, and that all aspects
of their business comply with key legal requirements. Moreover, our clients need to be able to
install in their shareholders, investors and customers with the same confidence. AHKC can
give clients all the assurance they need.

 Advisory
AHKC helps clients design and improve their systems and arrangements to meet their needs,
anticipate problems and find solutions. It is about ensuring that clients’ creative ideas make
sense financially.

 AHKC Advisory Services Include:

 Statutory Audit
 Compilation of financial statements
 International accounting standards
 Assurance engagement
 Internal audit
 Business risk services

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 Taxation
In Bangladesh, generally Taxation services to clients are given by lawyers and general tax
practitioners. However, the trend is changing fast, and AHKC being one of the large CA
firms has in house tax specialists who work with clients to minimize their tax burden
legitimately. Taxes, in their various forms, constitute a major business cost but this can be
reduced or deferred with the help of AHKC tax advisors.
For businesses starting up or moving into Bangladesh from abroad, we can provide ‘one-stop-
services’ and advice on how to set up and how to choose the most appropriate operating
structure. AHKC advisors will also explain the local laws and regulations to ensure that
clients are compliant.

 Corporate Finance
Turning a business dream into a successful reality usually calls for additional finance.
Acquisitions, floatation, business development and cross-border expansion may all demand
extra funds and require specialized advice from corporate finance teams with constant
exposure to both the local and the global marketplaces.

2.11 What does AHKC offer?

AHKC Corporate finance team can deliver the following services:

 Help clients find and secure finance from the most appropriate sources in Bangladesh
and Abroad
 Preparation of financial projections and financial / cash flow forecasts
 Assist clients in the preparation of their business plan
 Business valuations
 Provide ongoing advice and support with floatation, mergers & acquisitions,
management buy-outs / buy-ins and disposals
 Due diligence
 Advice on re-organizing and restructuring existing businesses, commercial and tax
considerations and fund raising options
 Feasibility studies

 Forensic Accounting
In complex world of business, quality forensic accounting is vital as personal injury,
professional negligence claims or commercial litigation can damage a business. One may
suspect fraud or may simply require a valuation of a business or other assets. A foreign
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 Audit procedure and cash incentive calculation

company or international NGO may have their operation in Bangladesh where they suspect
irregular or fraudulent activities. In all of these situations, AHKC forensic accounting experts
can help you achieve a successful outcome.

 Management Consultancy
Management consultancy is about helping organizations to improve their performance. A
good consultant helps to fine-tune a business or organization to measure success, improve
efficiency, maximize performance and minimize risk. As effective service provider we assist
you to know where you are and where you want to go, and work out how to go there.
AHKC has a history of helping a wide variety of client organizations to boost their
performance. The focus is always on practical, realistic solutions tailored to each specific
client organization underpinned by both global technical expertise and local knowledge.

2.12 Clients of AHKC Chartered Accountants from different sectors:

AHKC clients range from small owner-managed business, partnerships and charities to listed
companies, multinational and government bodies. Therefore, whatever your size, AHKC has
the right expertise for you.
AHKC are / were the auditor of the following leading organizations:
 Banks:
 Bangladesh bank (central bank of Bangladesh)
 Sonali bank limited
 Janata bank limited
 Agrani bank limited
 Rupali bank limited
 Pubali bank limited
 Islami bank bangladesh limited
 Mercantile bank limited
 National bank limited
 Non Banking Financial Institutions:
 Bangladesh house building finance corporation
 Prime finance & investment limited
 International leasing & financial services limited
 Midas financing limited
 Insurance Companies - Internal Audit:
 Purabi general insurance company limited
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 Sunflower life insurance company limited

 National & International Ngo’s:
 Care Bangladesh
 World vision Bangladesh
 Save the children international
 Engender health
 Concern worldwide
 Multinational Companies:
 Lafarge surma cement limited
 Unilever (Bangladesh) limited
 Novartis (Bangladesh) limited
 Rpg transmission limited
 Corporate Head Office/Branch Offices:
 Bangladesh chemical industries corporation
 Bangladesh steel & engineering corporation
 Bangladesh textile milles corporation
 Bangladesh jute mills corporation
 Bangladesh Textile Mills Corporation (BTMC):
 Olympia textile mills limited
 Meghna textile mills limited
 Madaripur textile mills limited
 Mohini mills limited
 Darwani textile mills limited
 Bangladesh Jute Mills Corporation (BJMC):
 Bawa jute mills limited
 Hafiz jute mills limited
 Furatkarnaphuli carpet factory limited
 Jessore jute industries
 Union/Upazilla Parishads:
 Union parishads (lgsp package no s - 2403)
 Aditmariupazilla, lalmonirhat
 Lalmonirhatsadarupazilla, lalmonirhat
 Shoilakupaupazilla, jhinedah
 Chowgachhaupazilla, jessore

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 Educational Institutions:
 Schools:
 Comilla modern high school
 London school of commerce
 Holy cross girls high school
 Colleges:
 Central law college
 Tejgaon college
 Dhaka city college
 Universities:
 Daffodil international university
 Dhaka international university
 Ahsanullah university of science and technology
 City university
 Taxation Services:
 Sunflower life insurance company limited
 Homeland life insurance company limited
 Mona financial consultancy and securities limited

2.13 Cost effective and quality assured services from AHKC

AHKC covers a broad spectrum of industries and sectors. Internationally, the name PKF is
recognized, respected and associated with the highest standards of independent auditing. By
adopting advanced international audit techniques and using the latest technologies as per PKF
recommendations, AHKC offers an efficient, cost-effective and comprehensive service to
every client regardless of size and location.

2.14 AHKC firm important enlistments:

Aziz Halim Khair Choudhury - AHKC Chartered Accountants, an Exclusive Correspondent

Firm of PKF International, and London UK, a Global Network of Independent Accounting
Firms, by its quality assurance, has achieved the following enlistments:-

 One of the top 10 leading CA Firms duly enlisted by Bangladesh Bank as ‘A’ Grade
Firm entitled to conduct audits of scheduled banks in Bangladesh.
 One of about 10 leading CA Firms duly enlisted by the Bangladesh Securities and
Exchange Commission (BSEC), and is entitled to audit various public limited
companies under Securities and Exchange Rules.
 One of the leading CA Firms duly enlisted by NGO Affairs Bureau for auditing of
NGOs.
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 Audit procedure and cash incentive calculation

 One of the leading CA Firms duly enlisted by the Microcredit Regulatory Authority
(MRA) for audits of microcredit organizations.

 One of the few leading CA Firms in Bangladesh duly enlisted by the European
Economic Community (EEC), Dhaka and engaged in auditing of 4 different large
scale projects funded by them in bulk through –

I) Bangladesh Rural Development Board (BRDB) Dhaka,

II) Bangladesh Tea Board (BTB) Chittagong having two projects and
III) Institute of Integrated Rural Development (IIRD) Dhaka.

 One of about 60 leading CA Firms duly enlisted by the Palli Karma-Sahayak

Foundation (PKSF), for auditing PKSF PNGOs working across the country having
been appointed by PNGOs.
 One of the leading CA Firms in Bangladesh duly enlisted by Bangladesh Freedom
Foundation (BFF), Dhaka for auditing BFF PNGOs working across the country.

2.15 Human Resources of all AHKC Branch:

Total Manpower 190

Partners 7

Consultants 3

Directors (As Audit Managers) 5

Deputy Directors (As Audit Managers) 9

Audit Executives / Assistants 7

Articled Students 94

Unregistered Students 35

Taxation and Secretarial Manager / Staff 4

Support Office Executives / Stuff 21

Computer Operators 5

Table 3: Human Resources of AHKC

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2.16 For AHKC - Uttara Branch:

Total Manpower 60

Partners 2

Consultants 1

Directors (As Audit Managers) 1

Deputy Directors (As Audit Managers) 1

Audit Executives / Assistants 2

Articled Students 18

Unregistered Students 27

Taxation and Secretarial Manager / Staff 2

Support Office Executives / Stuff 3

Computer Operators 3

Table 4: Human Resources of AHKC - Uttara Branch

2.17 AHKC CA firm clients:

AHKC is the auditor of the following leading organizations:

 Banks
 Non banking financial institutions
 Other financial institutions
 Insurance companies
 Multinational companies
 Corporate head office/branch office
 Enterprises under corporation
 Bangladesh chemical industries corporation (BCIC)
 Bangladesh steel & engineering corporation (BSEC)
 Bangladesh textile mills corporation (BTMC)
 Bangladesh jute mills corporation (BJMC)
 Bangladesh sugar & food industries corporation (BSFIC)
 Bangladesh petroleum corporation (BPC):
 Bangladesh oil, gas and mineral corporation (petro bangla)
 Bangladesh small & cottage industries corporation (BSCIC)
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 Audit procedure and cash incentive calculation

 Bangladesh forest industries development corporation (BFIDC)

 Biman Bangladesh airlines (BIMAN)

2.18 AHKC CA firm internal audit Sectors:

They also have internal audit procedure task. Their internal audit organizations are given
below:

 Educational institutions
 Colleges

 Universities

 Educational consultancies

 School
 Tea gardens

 Hospitals and pharmaceuticals

 Real state/apartments:

2.19 Porter’s five forces model:

Figure 2: Porter’s five forces model

Rivalry among competitors firm:

Rivalry among competitors firm is high. Because the number of CA firm is rising rapidly.
Same capacity able and qualities firm are existing in the market. There is no switching cost
from one CA firm to another firm. And there are similar types of CA firm existing in the
market.

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 Audit procedure and cash incentive calculation

Threat of new entrants:

The threat of new entrants in the CA firm is low. Because to start a CA firm A person need
FCA degree, partners, capital and some employee that is quite easily. And entry barriers are
low so that new entrants can enter easily.

Bargaining power of suppliers:

There is no supplier for CA firm, because CA firm providing services as a 3rd party. CA firm
is service provider company, they are directly providing services to the Financing and Non-
Financing Company like Auditing the company’s financial statements. So they don’t need
any suppliers.

Bargaining power of buyers/customers:

Bargaining power of customer is low. Because the number of customer is more than number
of CA firm. So customers have little bargaining power over CA firm. Customers are different
types of Private Company, Financing Company, Non- financing company, NGO etc.

Threat of substitute products:

Threat of substitute products is high. In Bangladesh the number of CA firm is increasing
gradually day by day and customers can easily switch one firm to another firm. Because
switch cost is low and every firm try to provide at low cost to get their customer. And in the
market there are many alternative firms available for customers. Customer can easily switch
from one firm to another firm

2.20 SWOT Analysis:

Figure 3: SWOT Analysis

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 Audit procedure and cash incentive calculation

Strengths: Weaknesses:
 Low Cost of Education  Overloaded Work
 Capacity to handle various types of  Poor Co-ordination between the
tasks simultaneously members
 Knowledge of ever-changing different  Poor Concentration
types of laws  No research and development
 Accuracy guaranteed in Government & department
in Other Departmental work
 Goodwill in Public Mind

Opportunities: Threats:
 There is no CA firm in Uttara area.  Lacking advance learning of
 Firm offer to students internship Computers
facility to get practical work  Lack of trained people
experience  Lacking time management
 Students wants to research with  Highly competitive
uncommon topic
 Currently many students interested to
enter inthis profession to build their
carrier

Table 5: SWOT Analysis

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 Audit procedure and cash incentive calculation

2.21 Internal factor Evaluation (IFE):

Internal Factor Analysis Weighted

Weight Rating
No Strengths Score

Low Cost of Education 0.2 4 0.8

1

Capacity to handle various types of tasks

0.2 3 0.6
simultaneously
2
Knowledge of ever-changing different types of laws 0.1 4 0.4
3
Accuracy guaranteed in Government & in Other
Departmental work 0.1 4 0.4
4
Goodwill in Public Mind 0.09 2 0.18
5
Weaknesses
Overloaded Work 0.1 1 0.1
1
Poor Co-ordination between the members 0.09 1 0.09
2
Poor Concentration 0.07 2 0.14
3
4 No research and development department 0.05 2 0.1
Total = 1 2.81

Table 6: Internal Factor Evaluation

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 Audit procedure and cash incentive calculation

2.22 External Factors Evaluation-(EFE):

External Factor Analysis Weighted

Weight Rating
SL Opportunities Score
There is no CA firm in Uttara area.
0.1 2 0.2
1
Firm offer to students internship facility to get
practical work experience 0.2 3 0.6
2
3 Students wants to research with uncommon topic 0.1 4 0.4
Currently many students interested to enter in this
0.2 4 0.8
4 profession to build their carrier
Threats
Lacking advance learning of Computers 0.1 2 0.2
1
Lack of trained people 0.1 2 0.2
2
Lacking time management 0.1 1 0.1
3
Highly competitive 0.1 1 0.1
4
Total = 1 2.60

Table 7: External Factor Evaluation

2.23 Financial Performance:

Liquidity Ratio (Current Ratio):

Liquidity ratio tells one’s ability to pay off its debt as and when they become due. In other
words we can say this ratio tells how quickly a firm can converts its current asset into cash so
that it can pay off it liability on a timely basis. Liquidity ratio affects the creditability of the
company as well as the credit rating of the company

2017 2018
Current Ratio: 4.20:1 -1.97:1

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 Audit procedure and cash incentive calculation

Graph:

Current Ratio
5
4
3
2
1
0
-1
-2
-3
2017 2018
Current ratio 4.2 -1.97

Graph 1: Current Ratio

Interpretation:

Current Ratio measure the organization's capacity to conceal current liabilities. It shows that
the organization has 1 TK obligation against how much resource accessible. As per the
AHKC-Chartered record firm, 2017 they are in a decent position. They had 4.2 TK current
resources against 1 TK Liability.

On the off chance that we look on year 2018, at that point they are in a major issue. If we
look on year 2018 then they are in a big problem. Because they had negative balance. It
indicates that the firm does not have much money to cover up its liabilities. They need to
liquid the fixed asset and collect the audit fee as soon as possible.

I have analyzed only one ratio of AHKC CA firm that is current ratio of AHKC in 2017 and
2018 because they does not show their financial statement to the students, when I asked to
give a minimum three or four year financial information they said its very confidential matter
that’s why they doesn’t permit to give those necessary information to include those in my
report. During my internship period I have known that those of our previous internship
students of our university that time firm doesn’t support to give financial statement to the
students.

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Audit procedure and cash incentive calculation

Part 3
Topic Part

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 Audit procedure and cash incentive calculation

3. Topic Part

3.1 Cash Incentive:

The cash incentive scheme was first introduced in 1986 as “Cash Compensatory Scheme”
(CCS). Cash incentive is the assistance in the form of “cash” given to any party in terms of
the fulfillment of certain conditions. In Garments sector, fish sector, jute sector, agro sector,
and pet bottle & flakes plastic industry and new market exploration sector, etc, cash incentive
is given as a repayment of part of the production cost of the Bangladesh. Cash Incentive is
given as repayment of part of the Production cost of the Bangladeshi exporter (incentive
Receiver) when Beneficiary completes the export process complying with all requirements of
the Government 2(mentioned in the Bangladesh Bank Circulars). In most of the cases, there
are special motives behind giving Cash Incentive. Cash incentive is utilized as a counter
weapon against the Undesirable routine with regards to dumping by foreign countries. In
Bangladesh, Cash incentive is primarily given to export oriented sectors to boost the export
thereby earning foreign exchange.

3.2 Procedure of Cash Incentive:

The procedures of executing cash incentive audit are:

 Applications for the cash incentives submitted by the exporter
 The application is officially received by the bank
 Letter issued by the bank to the concerned partner
 Commencement of the cash incentive or subsidy audit
 Preparation of the working paper file
 Check of the workings
 Review of the working paper file
 Partner’s review and signature
 The certificate is submitted to the Bank

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 Audit procedure and cash incentive calculation

Application Submitted Received By Bank Bank issued and

by Exporter concerned to partner

Check the workings Preparation of working Commencement of

File cash incentive/subsidy
audit

Review the working file Partners review and Certificated Submitted

signature to the Bank

Flow Chart 1: Cash Incentive procedure

3.3 Agro Processing:

A common and traditional definition of agro processing refers to the subset of manufacturing
industry that processes raw materials and intermediate products derived from the agricultural
sector. Agro processing industry thus means transforming products originating from
agriculture, forestry and fisheries to finished product.

3.4 History of Agro Sector:

Bangladesh is a thickly populated agro based country gifted with favorable conditions yet.
Hard working people combined with modern knowledge have contributed admirably to make
it solvent in our staple food. Necessity is the mother of invention. Agriculture is the largest
employment sector in Bangladesh. The performance of this sector has an overwhelming
impact on major macroeconomic objectives like employment generation, poverty alleviation,
human resources development, food security etc. Agriculture is the single most important
sector of Bangladesh's economy. 80% of the population is engaged in agriculture (66% of the
labor force). Fifty-seven percent of the labor force is engaged in the crop sector which
represents about 78% of the value added in the agricultural sector. The share of agriculture in
GDP has fallen from around 57% in the 1970sto 35% in recent years but is still the largest
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 Audit procedure and cash incentive calculation

economic sector. It is also the source of many of the small industrial sector's raw materials,
such as jute, and accounts for 32% of the value of exports. In short, agriculture is the driving
force behind economic growth in Bangladesh and, as a result, increasing food and agriculture
production have always been major concerns of Bangladeshi policy-makers.

3.5 Demand of Agro sector in Foreign Market:

The importance of agriculture in the development of the country need not be emphasized.
Currently, this sector provides 42.7 percent of our total employment. It contributes around 15
percent of our total GDP. Though the growth rate and GDP contribution of this sector have
been declining, productivity in agriculture has increased manifold and that's why the country
is now self-sufficient in food production. In the last 10 years, our agricultural export has also
increased which has helped agri-business flourish in the country. The agriculture sector
provides strong basis for economic development of Bangladesh .It is the largest economic
sector which comprises more than 16% of the country’s GDP and employs 45% of labor
force. The performance of this sector has great impact on macro economic situation of the
country. The recent economic crisis has reemphasized on the need of building more
dependable food security system with increased productivity.

Products of Bangladesh Agro-Processors’ Association - (BAPA):

3.6 List of Eligible Agro-Processed Products for incentive:

Fruit Juice, Fruit Drinks, Biscuits, Chanachur, Prepared Nuts, Fried Peanuts, Potato
Crackers, Potato Flakes, Potato Chips, Flattened and Puffed Rice, Confectionery Goods, All
Kinds of Spices, Fruit Jam, Fruit Jelly and Marmalade, Pickles of Fruit Vegetable & Spices,
Chutney of Fruit Vegetable & Spices, All Kinds of Sauces, Semai, Rose Water, Tomato
Sauce/ketchup, Tomato Paste,Noodles, Extruded Snacks, Mango & Fruit Bar, Kashundi,
Various Kind of Paratta, Alu Puri, Dal-Puri,Vegetable Spring Roll, Singara, Luchi, Dal
Samusa,VegetableSamusa, Chita Pitha, Frozen Kachur Loti, Frozen KachurMukhi, Frozen
Data, Frozen Karola, Frozen Bean Seed, Frozen Jackfruit Seed, Frozen Satcora, Frozen
Lediesfinger, Frozen Olive, Frozen Bean, Frozen Potol, Frozen Ghinga, Frozen Kakrol,
Frozen NerkeliKachu, Frozen Barboti, Frozen Radish, Candy, Babol Gum, Lolypop, Syrup of
date Juice,Vinegar of Date Juice, Honey, Frozen Mushroom,Papor,Jarda, Canned Pineapple,
Canned Aloe Vera, Canned Baby Corn.

3.7 Importance of Agro-Processing Industries:

Agro processing could be defined as set of techno economic activities carried out for
conservation and handling of agricultural produce and to make it usable as food, feed, fibre,
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 Audit procedure and cash incentive calculation

fuel or industrial raw material. Hence, the agro-processing industry is regarded as the sunrise
sector of the Indian economy. Properly developed, agro-processing sector would not only
encourage rural entrepreneurship but also can make India a major player at the global level
for marketing and supply of processed food, feed and a wide range of other plant and animal
products.

3.8 Benefits of Agro-Processing

 Enhanced agricultural productivity and increased farm household incomes

 Year-round availability of affordable safe and nutritious food
 Job creation for rural and urban youth
 Production of fortified foods for vulnerable groups in society.
 Establishment of indigenous food standards
 Large quantities of agricultural “waste” produced in one location which can be
transformed into useful products such as animal feed.
 Reduce importation of similar or foreign foods and conserve foreign exchange

3.9 Required documents in Agro file:

According to an auditor, my key work about the audit of cash incentive file is to prepare a top
sheet for each file of the application. It is the vital and supreme duty of an auditor to keep a
solid record of all the work and calculations that is being done for analysis and future
reference purpose. We record all the necessary information of the application file in this top
sheet. The audit file which is provided by the bank is consist of many paper but there are
some important papers that are given below:

 Party Calculation Page

 Bank Recommended Calculation
 FE Circular Document
 PRC Paper
 BAPA Certificate
 Application Form
 Sales Contract
 Commercial Invoice
 Packing List
 Bill of Lading
 EXP form
 Bill of Export/Entry
 Freight Certificate

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 Audit procedure and cash incentive calculation

3.9.1 Party Calculation Page:

This is a party calculation paper. By a particular bank party claim an amount for getting back
their realized money. But one important issue for the exporter that any exporter can claim
money based on their exporting products but only bank decided after calculating their all
documents which amount actually exporter should get. Here party claim TK 124,308.00 it’s
actually means that this amount of money party claim and supposed to get for exporting the
products from the Bangladesh bank.

Image 1: Party Calculation Page

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 Audit procedure and cash incentive calculation

3.9.2 Bank Recommended Calculation:

This is a paper of bank calculation. When party submit their file to the bank for getting the
realized money that time bank check their all document to the exporter and finally based on
all the document of the file of exporter bank calculate which amount actually exporter should
get to the Bangladesh bank. Here under this document paper bank calculates TK 124308.00
which exporter will get to the Bangladesh bank.

Image 2: Bank Recommended Calculation page

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 Audit procedure and cash incentive calculation

3.9.3 FE Circular Document:

Its means foreign exchange circ ular. It’s a governmental policy. For export any product each
department or sector must have to follow some criteria under governmental rule that’s
important things basically mention in the FE circular. Cash Incentive or Subsidy Audit has to
be conducted according to the instructions of Bangladesh Bank which are published in
different time in the form of Bangladesh Bank’s circular. These circular contains, who are
eligible and what is the procedure to avail Cash Incentive. For different sector, we see some
variations in the circulars or requirements of Bangladesh which work as the basis of cash
incentive in those sectors. Every year government restructures this circular.

Image 3: FE Circular page

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Audit procedure and cash incentive calculation

Image 4: FE Circular page

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 Audit procedure and cash incentive calculation

3.9.4 PRC Certificate:

PRC (Proceed realization certificate) is one of the important documents that are required to
apply for Cash Incentive facilities. Most important thing is that when bank provide the audit
file to the firm must be there original PRC available. An auditor must be aware that if there
are photocopy of PRC need to give observation. Then audit partner told about it to the bank
so that bank can solve it. It is the main source of Realized value and realized date. But there
are other information which we need to match with related paper from the audit file.

Image 5: PRC Certificate page

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 Audit procedure and cash incentive calculation

3.9.5 BAPA Certificate :( Bangladesh Agro processor association)

The Bangladesh Fruits, Vegetable Product Exporter’s Association is one of the largest trade
associations in the country. Representing the Vegetable sector, particularly the different
sector and fruits sector with equal importance. The association certificate shows that how
much product is collected for complete the export. This certificate given some information for
example, Date of the certificate, Export L/C number, Date of Export L/C, Export Value,
Items, Quantity etc.

Image 6: BAPA Certificate page

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 Audit procedure and cash incentive calculation

3.9.6 Application Form:

This paper indicates that party applies for cash incentive to the Bangladesh bank by mention
all the important information. In this form party gives export value, realize value, contract
number, and their bank account number. In the form we get information about the applicant
name, address, export registration number, Export L/C number and date and Value. We also
found the quantity and net weight in application form.

3.9.7 Sales Contract:

Every exporter before export any good need to make a contract with the importer. In this
contract paper exporter make an argument with the importer that which condition are
followed by them. Like how many quantity, how much value of the good, when exporter
delivery the product etc. Most important thing is contract number, date and value which
are writing down in the top sheet.

Image 7: Sales Contract page

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 Audit procedure and cash incentive calculation

3.9.8 Commercial Invoice/Export Invoice:

A commercial invoice (in addition to other information), must identify the buyer and seller,
and clearly indicate the date and terms of sale, quantity, weight and/or volume of the
shipment, type of packaging, complete description of goods, unit value and total value,
shipping and other charges (as applicable).

Image 8: Commercial Invoice page

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 Audit procedure and cash incentive calculation

3.9.9 Packing List:

In agro audit file there are packing list available which is necessary for determining about the
net weight which should write down in the top sheet. This is the main source document for
find out the net weight. We can also find out the gross weight or quantity from the packing
list. In the packing list there are invoice numbers which need to match with commercial
invoice number.

Image 9: Packing List page

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 Audit procedure and cash incentive calculation

3.9.10 Bill of Lading:

In agro audit file, the bill of lading is a legal document between a shipper and a carrier that
details the type, quantity and destination of the goods being carried. Sometime transportation
can make by Truck and Air. Based on transportation date we likewise discover money related
year and according to the financial year incentive percentage are selected for the export
goods. Bill number must be still in a page but bill number does not found or match with PRC
that time we write the observation.

Image 10: Bill of Lading page

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 Audit procedure and cash incentive calculation

3.9.11 EXP Form:

An exporter must be open an Export form in a bank. Where we can found the information
like export value, net weight, country destination, contract number and date, exporter name
and address, Shipment date and bill number etc. Most important thing there are 4:5:2 ratio
digit which is known as an Export number. This export number must be match with
Application form, PRC Certificate, Commercial Invoice, Packing list, Bill of Lading and Bill
of Entry.EXP is a file extension for exported files. Exp stands for exported files. EXP file
extensions are commonly used for exporting standardized files to be used with other
applications. EXP form is the most important file we know that we can found some
information such as, contract number, contract value, exporter name, exporter address,
Shipment date and bill number etc. Those papers are different but we check the information
by all the paper.

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Audit procedure and cash incentive calculation

Image 11: EXP Form front page

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Audit procedure and cash incentive calculation

Image 12: EXP Form back page

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 Audit procedure and cash incentive calculation

3.9.12 Bill of Entry/ Export:

A declaration by an importer or exporter of the exact nature, precise quantity and value of
goods that have landed or are being shipped out. Prepared by a qualified customs clerk or
broker, it is examined by customs authorities for its accuracy and conformity with the tariff
and regulations. Description of goods, value, name of exporters, name of foreign
buyers/importers, and name of transport operators are specified in the declaration.

Image 13: Bill of Entry page

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 Audit procedure and cash incentive calculation

8.9.13 Freight Certificate:

Freight Certificate is a record where in the Freight forwarder is going to issue a confirmation
that they have been paid by an individual or organization to move their items or products to
somewhere else or nation. All the Freight forwarders ought to be severe in following
guidelines.

8.10How to prepare agro top sheet (1st Page):

In the top sheet we need to first write down bank reference number from the file which is
given by the bank and it is whiten at the top of left side in the top sheet. After that we need to
write down the bank firm reference which is given by the firm so that easily can trace the file.
After that we need to write down the bank name and address. It was check from any sign or
mark. Then we need to write down PRC bank name and address. If it is opened in the same

Bank then need to write down “DO” if not then writes down the full name and address. Then
we need to write down the applicant name and address from the Application. Then exporter
name address. Exporter name and address can found in the PRC Certificate. Some time it is
same as like PRC bank name and Address. Then we need to write down the Contract No,
Date and value in the top sheet from the contract paper. From the Export form we need to
write down the export number in the top sheet. From two commercial invoices we need to
write down the value which is high. From the PRC certificate we need to write down realized
value and date. From the Bill of Lading and application form we need to write down the
application date and shipment date. We also aware about one thing is that realized date
cannot occur after application date.

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 Audit procedure and cash incentive calculation

Image 14: top sheet 1st page

In the audit file we count every single page and write down in the page number option. There
are some requirements also likes:


Financial Year.

Maximum duration

Short realization.

Incentive and Category

Applicant Applied Amount

Bank Recommended amount

Approved amount

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 Audit procedure and cash incentive calculation

8.10.1 Financial Year:

From bill of lading we got the shipment date which is necessary for find out the financial
year. If shipment date is in between one to six month then previous year to current year will
be the financial year. If shipment date is in between seven to twelve then current year to next
year will be financial year. As for example: if shipment date was 23/05/2108 then financial
year is 2017-2018. Again shipment date was 14/8/2018 then financial year is 2018-2019.

8.10.2 Maximum duration:

After find out the application date and realized date we need to find out the difference
between the application and realized date. If the differences is over 180 days then the fill
cannot get the intensive from Bangladesh bank. If it is happened then we give the observation
and authority takes proper action against it.

8.10.3 Short-realization:
From the above formula we can calculate the short-realization for the audit file. If short
realization is above 5% then we need to give observation. Then authority transfers this
information to the bank. Bank will take the responsibility to solve the problem.

8.10.4 Applicant amount:

Basically applicant amount for incentive which is given in the application form. But it is
given as a foreign amount. We need to multiply it with conversion rate and write down in the
top sheet.

8.10.5 Recommend Amount:

After applicant amount in the application form bank also calculate an incentive amount for
the exporter. Here we need to aware that bank calculation amount cannot higher than
applicant amount.

8.10.6 Approved Amount:

The calculation prepared by the firm is write down in the top sheet. Firm calculate
amount cannot higher than bank amount. If it happened then on the calculation time
directly write down the bank amount after that write down in bracket “As per Bank”.

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 Audit procedure and cash incentive calculation

8.11 How to do Calculation of the top sheet (2nd page):

Image 15: top sheet 2ndpage

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 Audit procedure and cash incentive calculation

8.12 How to marking the page number of agro file (3rd Page):

Image 15: top sheet last page

8.12.1 Interpretation:

1. Total Export Value= $7,500.00(Total export value is given in the commercial

invoice; total export value means the total value of the export product)
2. Total Realized Value= $7466.00 [Total Realized Value it was given in the PRC
(Proceeds Realization Certificate) from.]
3. Total Net Weight = $30,600.00 KGS
4. Realized Date = 25.06.2019 (Realized date take from PRC)
5. Shipment Date = 27.05.2019 (Shipment date is taken from Bill of Lading)
6. Net FOB Value = $7,466.00(Here is no freight charges and other commissions)
7. Net amount eligible for cash subsidy: $7,466.00
8. 20% of C: Here we calculate 20% amount for cash subsidy.
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 Audit procedure and cash incentive calculation

($7,466.00 *20%) =$1,493.20

9. Conversion Rate: Conversion Rate that fixed by bank. Here in this calculation the
rate was @83.25
10. Incentive Taka: After doing the percentage multiplying by conversion rate we get
incentive taka. Here, ($1,493.20*83.25)= 124,308.00taka

8.13 Verifying and auditing the documents of the File and top sheet:

 Checking the Documents with PRC:

During the preparation of the report we have to go through each and every page of the
file to check that the information which is given in the PRC is available in the file if
not we has to make observations for it. We have to check the PRC issued Bank branch
from the PRC and the Name and Address of the exporter from the PRC.

 Checking the Other Related Documents:

We have to check the Bill of Lading from there we will check that the freight is
prepaid or collect and from this paper we also need to check the shipment date as
well. We also need to check the EXP form, Bill of Entry, Commercial Invoice,
Packing list etc if all the documents matched with the related paper that time we do
not need to give any observation if the documents does not matched that time we have
to give observations for that individual file.

8.14 Proof Read:

After preparing the file we check the file. If any mistake is found in the file we solve the
mistake and give proper observations. After review the file goes to the top management for
review. Then the top management reviews the file and make proof read. By proof reading we
check the file is properly done or not. After completing the proof reading then the top
management make certificate for cash incentive. Finally party submits that certificate to the
Bangladesh bank. Then Bangladesh bank gives the amount to the party that we have
approved.

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Audit procedure and cash incentive calculation

Part 4
Actual task Part

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 Audit procedure and cash incentive calculation

4. Actual Task Part

4.1 My Internship Background

Contents Details

Name of organization Aziz Halim Khair Choudhury – AHKC Chartered

Accountants

Address of the organization House: 25, Road: 1, Sector 9, Uttara model town Dhaka-
1230, Bangladesh

Name and contact details of Runa Talukder

office supervisor
Deputy Director ( Audit& Assurance)

Phone: 01718753259

Duration of Internship January16, 2020 to April 16, 2020

Table 8: Internship details

4.2 Internship Experience:

As we know that AHKC – Aziz Halim Khair Choudhury is number 8th ranked position CA
firm by the source of Bangladesh Bank press release 2017. It has 3 branches; these are
conducted their activity or operation spontaneously. I had confirmed my internship by the
Uttara office of AHKC.
I was a part of AHKC for 12 weeks and started my internship on 16th January 2020. On the
very first day, I was felicitate by Dr. Jamshed Sanyiath Ahmed Choudhury PhD, FCA,
Principal and Chairman of AHKC Chartered Accountant, who introduced me to the
encouraging culture of the AHKC and the Deputy Director - Runa Talukder appoint as my
supervisor also she introduce me about the rules and regulation of AHKC, and all the students
help me to know about the professionalism of AHKC. I worked under Runa Talukder
(Deputy Director, Audit and Assurance) of AHKC. I worked last 3 months under their
supervision. My daily working hours were 9.30 AM to 5.30 PM. Especially, I was appointed
in cash incentive audit department as well as I tried to take almost every opportunities for
learning. I was very happy to work in such an environment where I could apply my academic
knowledge to an extent and gathered practical working experience.

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 Audit procedure and cash incentive calculation

I got a friendly environment and every Sir, Madam, employees and students of Uttara Branch,
AHKC is very professional. I enjoyed every moment during my internship period. I never felt
obscure and ambiguous. My observation and responsibility are in cash incentive audit section
for the firm from 16th January to 15thApril2018.Three months Internship isn't sufficient time
to get the hang of everything of any work circumstance or anything then again it is
exceptionally compelling course of an understudy to find out additional. In this way, in a
sentence I can say that, it is only everything in the event that I can learn or need to learn.

4.3 Duties and responsibilities:

I do my report based on Agro processing sector. And after getting the file first calculate the
applied amount then recommended amount then we have to calculate the total export and
realized value. After getting total realized value then deducts the freight charge and
commission. After getting a FOB then we calculate the cash incentive for Agro Product 20%
incentive. After getting incentive then we multiply the conversion rate and that time partner
get the incentive Tk. After we preparing the file then we cheeked the file and after checking
the file we give the file to the top management and top management review the file and make
proof read for the file.

4.4 Primary learning:

There has some topic related primary learning areas those I have learnedin my internship
period are given below:
 Learned about cash incentive that how a company takes incentive by exporting the
goods from government.
 How to calculate cash incentive and subsidy.
 Learned about why Bangladesh government provides cash incentive and subsidy.
 In cash incentive calculation where I have learned about 5 export source documents
such as sales contract paper, Commercial invoice, packing list, Bill of entry, Bill of
lading, EXP form.
 Learned about who are preparing or issuing which export papers.
 Learned about how exporter exports their goods.
 L/C procedure along with back to back L/C that is related for exporting a product.
 Learned about export- import business transaction.
 How to prepare a top sheet for cash incentive file to approved cash incentive amount
by following bank calculation amount.
 How to check a top sheet of cash incentive file.
 Learned about maximum duration calculation for getting cash incentive.

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 Audit procedure and cash incentive calculation

 Learned about the categories of sector that which sector will take how much cash
incentive rate to the government.

4.5 Secondary learning:

On the other hand, there has some my secondary learning areas those I have learned in my
internship period are given below:
 First of all I have learned the Time Management and its importance in corporate life.

 I have learned that organization’s working culture and how to behave with other
employee and colleagues professionally.

 How to behave with Management.

 How to behave with clients.

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Audit procedure and cash incentive calculation

Part 5
Research Part

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 Audit procedure and cash incentive calculation

5. Research Part

5.1 Problem Statement:

Cash incentive calculation procedure of Agricultural exports might be inaccurate and thus
effecting the performance of the firm.

5.2 Background of the Problem:

According to Agro Audit file, their freight charges are most important but most of the time
calculation of freight charge so much complicated because party has given alternative amount
of freight. On the other hand, sometimes we don’t find the PRC original paper. Another
significant issue is EXP-form sometimes this form we don’t found in the agro file that’s why
we cannot get accurate information, one of the main important part of calculation of
maximum duration for cash incentive calculation.

Also another issue is commercial invoice value, when we cross check this amount with PRC
paper that time we found in PRC has the higher commercial value. Finally I have found in the
sales contract paper which carry most important part, sometimes in commercial invoice paper
the exported items are huge than the sales contract paper, party cannot get cash incentive on
that particular items which does not have in sales contract paper. At the last time we write
down the observation based on those missing documents and we stop the audit.

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 Audit procedure and cash incentive calculation

5.3 Project Timeline

It took three months to complete my internship report. I have done several activities during
my internship period which are given below:

Detail work plan - Practicum report

W W W W W W W W W W W W W
Task 1 2 3 4 5 6 7 8 9 10 11 12 13
Working time in the
1 organization
2 Topic Selection
3 Introductory Part
4 Organization Part
5 Topic Part
6 Actual Task Part
Hypothesis and
Questionnaire
Development
7
8 Survey and Personal
Interview
Data Analysis and
9 Decision Making
10 Report Preparation

Table 9: Project Timeline

5.4 Budgeted Information:

At the period of my internship (16th January to 16th April), I have spent an amount of
money for preparing this report. Detail information is given below:
Particulars Amount (TK)

Transportation Cost 70*46 = 3,220.00tk

Lunch (46 Days*50.00Tk.) 2,300.00tk.

Printing & Binding 600.00tk

Scanning 100.00tk

Total 6,220.00tk

Table 10: Budgeted Information

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 Audit procedure and cash incentive calculation

5.5 Research Methodology:

5.5.1 Research Approach:

For completing the research, I have selected quantitative research as my research approach.
This research is based on the primary data collected through a survey on Employees and
Article students enlisted in calculation process of agro audit file of AHKC Uttara branch. I
have analyzed the hypothesis with the Z – test.

5. 5.2 Population of sampling method

 Population: Total=60, Where Employee=15 & Students=45.

Employees and Article Student of Aziz Halim Khair Choudhury Chartered
Accountants Uttara Branch.
 Sampling Frame: Employees and Article Students of selected Uttara Branch.
 Sample Size: To conduct the research I need to select the sample size. The total
number of samples is 35. Sample size n = 35, Where Employee=5 & Students=30.

Z - Value of confidence level (95%) from Z table is 1.96. Level of significance 5%

 Sampling procedure: For this study I used Judgment Sampling (Where the sampling
depends on the opinion of the researcher) due to the small size of the population.
Though there is a possibility of being biased, as a researcher I tried to be unbiased and
not to do any sort of manipulation in terms of the decision of the result.

5.5.3 Research Instrument: Descriptive.

As research instrument I used closed ended structured survey questionnaire. I prepared a form
with a set of questions deliberately designed to elicit responses from the respondents for data
collection. I have used 5 Likert scales.

5.5.4 Type of Research

My research topic refers to the exploratory type research. Because the problem of this
research, I have analyzed uniquely and try to give some unique solution of that problem.

5.5.5 Data source:

I have collected data from two sources which are primary source and secondary sources.

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 Audit procedure and cash incentive calculation

Primary Source:

Some primary data are collected by interview and by discussion with the management and
article students of AHKC. I have spent my 3 month internship period in AHKC Chartered
Accountants. During this period, I have collected some data on the basis of my observation.

Secondary Source:

Some secondary data are collected by using some website and organization website. Some
data also collected by the journal and article.

5.6 Research Limitation:

The main limitations of this research are:

 Time limitation due to corona virus.
 The data obtained in some cases may be biased.
 Authority did not disclose much information.
 The information obtained from the managements and students of AHKC Chartered
Accountants are involve in Agro sector based on questionnaire survey was assumed to
be factual.
 Since the survey is based on probability sampling method, it does not disclose the
opinion of the entire managements and students of AHKC Chartered involve in Agro
sector.

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 Audit procedure and cash incentive calculation

5.7 Data Analysis:

For data analysis I used Microsoft excel the personal computer. As well as the chart and
diagram were given to understand the specific and particular data. The statistical tools and
techniques were used like hypothesis testing. Under the hypothesis techniques the z-test is
applied in the analysis of data according to the sample size. Based on my analysis I made
findings and recommendation.

5.7.1 The following formula has been followed:

X 
Z=
/ n
Here,

X = Average

µ = mean value

σ = Standard deviation

n = sample size

5.7.2Data Interpretation:

Result Finding: MS Excel

Hypotheses Test: Z test

The following formula has been followed:

We know that,
X 
Z test =
/ n
Where,

µ = mean value

n = sample size

σ = Standard deviation

X = Average

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 Audit procedure and cash incentive calculation

Weighted Value of the Personnel Opinion:

Opinion Weighted

Strongly Disagree 1
Disagree 2

Neither Agree nor Disagree 3

Agree 4

Strongly Agree 5

Table 11: Weighted Value of Opinion

Conceptual Framework:

Independent Variables

Alternative calculation of
freight charge

Missing source documents

Cash incentive
calculation procedure of
Short realization above 5% Agricultural exports
might be inaccurate
Dependent Variable

Eligible items are not shown

properly

Application has done before

realization

Figure 3: Conceptual Framework

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 Audit procedure and cash incentive calculation

5.8 Hypothesis Development:

No. Hypothesis

Due to alternative calculation of freight charge it is tough to identify exact freight

1)HA: amount that’s why Cash incentive calculation procedure of Agricultural exports
might be inaccurate.

Because of missing source documents, auditors face problem when they calculate
2) HA: the cash incentive thus Cash incentive calculation procedure of Agricultural exports
might be inaccurate.

Short realization above 5% is not acceptable so Cash incentive calculation

3) HA: procedure of Agricultural exports might be inaccurate.

It is tough to find the eligible items from commercial invoice that’s why Cash
4) HA: incentive calculation procedure of Agricultural exports might be inaccurate.

The maximum duration day cannot calculate because of application has done before
5) HA: realization as a result of Cash incentive calculation procedure of Agricultural
exports might be inaccurate.

Table 12: Hypothesis

5.8.1Hypothesis Testing:

Particular H1 H2 H3 H4 H5

1= Strongly Disagree 1×6= 6 1×2=2 1×5=5 1×4=4 1×5=5

2= Disagree 2×5=10 2×3= 6 2×3=6 2×3=6 2×5=10

3= Neither Agree nor 3×2= 6 3×5= 15 3×6= 18 3×8=24 3×6=18

Disagree

4= Agree 4×12=48 4×15=60 4×10=40 4×5=20 4×9=36

5= Strongly Agree 5×10=50 5×10=50 5×12= 5×15= 5×10=50
60
75

Total 120 133 129 129 119

Average ) 3.42 3.80 3.68 3.68 3.40

Standard deviation 1.47 1.13 1.41 1.40 1.41

Z-cal value 1.75 4.21 2.95 2.95 1.73

Table 13: Hypothesis Testing

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 Audit procedure and cash incentive calculation

5.8.2 for Hypothesis 1,

Ho: Due to alternative calculation of freight charge it is not tough to identify exact freight
amount.
HA: Due to alternative calculation of freight charge it is tough to identify exact freight
amount.

Total Data Calculation

Step 1
Total Data = 6+10+6+48+50 = 120

Step 2 To find average X

X =

= 3.42

Step 3 To Calculate Standard Deviation, σ

Standard Deviation, σ =

= 1.47
Where,
X = Average
n = Sample Size

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 Audit procedure and cash incentive calculation

Step 4 To Find Critical Value

Z cal = ( –μ)/ (σ/√n)

=
=0.42 /0.24
= 1.75

Where,

X = Average
n = Sample Size
µ = Mean Value
= (1+2+3+4+5)/5= 3
σ = Standard deviation

The level of significance = 5% which means,

My confidence level is = 100% − 5% =95% = 0.95
According to Z critical value calculator,

The critical value of 5% level of significance, Z tab = 1.6449

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 Audit procedure and cash incentive calculation

Hypothesis 1

17%
29% Strongly Disagree

14% Disagree

6% Neither agree or Disagree

34% Agree
Strongly Agree

Chart 01: Hypothesis 1

Interpretation:
According to Z critical value calculator at 5% level of significance, Z 0.05 = 1.6449 and Z cal =
1.75. If the Z cal value > the Z tab value, then null hypothesis will be rejected. So, I can say
null hypothesis (H0) is rejected. Because the Z cal value > Z tab value. So the decision I can
give that due to alternative calculation of freight charge it is tough to identify exact freight
amount.

Findings:

In hypothesis 17% respondents strongly disagree, 14% disagree, 6% neither agree nor
disagree, 34% agree, and 29% strongly agree with my statement. That means 63%
respondents are saying that due to alternative calculation of freight charge it is tough to
identify exact freight amount.

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 Audit procedure and cash incentive calculation

5.8.3 for Hypothesis 2,

Ho: Because of missing source documents, auditors does not face problem when they
calculate the cash incentive.
HA: Because of missing source documents, auditors face problem when they calculate the
cash incentive.

Step 1 To calculate total Data

Total Data = 2+6+15+60+50 = 133

Step 2 To find the Average

To find average X

X =

= 3.80
Average, X = 3.80

Step 3 To calculate Standard Deviation

Standard Deviation, σ =

= 1.13
Step 4 To find the critical value

Z cal = ( –μ)/ (σ/√n)

=
=0.80 /0.19 Where,

= 4.21 X = Average
n = Sample Size
µ = Mean Value
= (1+2+3+4+5)/5= 3
σ = Standard deviation

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 Audit procedure and cash incentive calculation

The level of significance = 5% which means,

My confidence level is = 100% − 5% =95% = 0.95
According to Z critical value calculator,

The critical value of 5% level of significance, Z tab = 1.6449

Hypothesis 2

6%
8% Strongly Disagree
29%
14% Disagree
Neither agree or Disagree

43% Agree
Strongly Agree

Chart 02: Hypothesis 2

Interpretation:
According to Z critical value calculator at 5% level of significance, Z 0.05 = 1.6449 and Z cal

=4.21. If the Z cal value > the Z tab value, then null hypothesis will be rejected. So, I can say
null hypothesis (H0) is rejected. Because the Z cal value > Z tab value. So the decision I can
give that because of missing source documents, auditors face problem when they calculate the
cash incentive.
Findings:

In hypothesis 6% respondents strongly disagree, 8% disagree, 14% neither agree nor

disagree, 43% agree, and 29% strongly agree with my statement. That means 72%
respondents are saying that because of missing source documents, auditors face problem
when they calculate the cash incentive.

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 Audit procedure and cash incentive calculation

5.8.4 Hypothesis 3:

Ho: Short realization exist 5% is acceptable.

HA: Short realization exists 5% is not acceptable.

Total Data Calculation

Step 1
Total Data = 5+6+18+40+60 = 129

Step 2 To find average X

X =

= 3.68

Step 3 To Calculate Standard Deviation, σ

Standard Deviation, σ =

= 1.41
Where,
X = Average
n = Sample Size

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 Audit procedure and cash incentive calculation

Step 4 To Find Critical Value

Z cal = ( –μ)/ (σ/√n)

=
=0.68 /0.23
= 2.95

Where,

X = Average
n = Sample Size
µ = Mean Value
= (1+2+3+4+5)/5= 3
σ = Standard deviation

The level of significance = 5% which means,

My confidence level is = 100% − 5% =95% = 0.95
According to Z critical value calculator,

The critical value of 5% level of significance, Z tab = 1.6449

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 Audit procedure and cash incentive calculation

Hypothesis 3

14%
Strongly Disagree
33% 8%
Disagree
17% Neither agree or Disagree

28% Agree
Strongly Agree

Chart 03: Hypothesis 3

Interpretation:
According to Z critical value calculator at 5% level of significance, Z 0.05 = 1.6449 and Z cal

=2.95. If the Z cal value > the Z tab value, then null hypothesis will be rejected. So, I can say
null hypothesis (H0) is rejected. Because the Z cal value > Z tab value. So the decision I can
give that short realization exists 5% is not acceptable

Findings:

In hypothesis 14% respondents strongly disagree, 8% disagree, 17% neither agree nor
disagree, 28% agree, and 33% strongly agree with my statement. That means 61%
respondents are saying that short realization exists 5% is not acceptable.

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 Audit procedure and cash incentive calculation

5.8.5 Hypothesis 4:

Ho: It is not tough to find the eligible items from commercial invoice.

HA: It is tough to find the eligible items from commercial invoice.

Total Data Calculation

Step 1
Total Data = 4+6+24+20+75 = 129

Step 2 To find average X

X =

= 3.68

Step 3 To Calculate Standard Deviation, σ

Standard Deviation, σ =

= 1.40
Where,
X = Average
n = Sample Size

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 Audit procedure and cash incentive calculation

Step 4 To Find Critical Value

Z cal = ( –μ)/ (σ/√n)

=
=0.68 / 0.23
= 2.95

Where,

X = Average
n = Sample Size
µ = Mean Value
= (1+2+3+4+5)/5= 3
σ = Standard deviation

The level of significance = 5% which means,

My confidence level is = 100% − 5% =95% = 0.95
According to Z critical value calculator,

The critical value of 5% level of significance, Z tab = 1.6449

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 Audit procedure and cash incentive calculation

Hypothesis 4

11%
9% Strongly Disagree
43% Disagree
23% Neither agree or Disagree

14% Agree
Strongly Agree

Chart 04: Hypothesis 4

Interpretation:
According to Z critical value calculator at 5% level of significance, Z 0.05 = 1.6449 and Z cal

=2.95. If the Z cal value > the Z tab value, then null hypothesis will be rejected. So, I can say
null hypothesis (H0) is rejected. Because the Z cal value > Z tab value. So the decision I can
give that it is tough to find the eligible items from commercial invoice.

Findings:

In hypothesis 11% respondents strongly disagree, 9% disagree, 23% neither agree nor
disagree, 14% agree, and 43% strongly agree with my statement. That means 57%
respondents are saying that it is tough to find the eligible items from commercial invoice.

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 Audit procedure and cash incentive calculation

5.8.6 Hypothesis 5:

Ho: The maximum duration day can calculate because of application has done before
realization.
HA: The maximum duration day cannot calculate because of application has done before
realization.

Total Data Calculation

Step 1
Total Data = 5+10+18+36+50 = 119

Step 2 To find average X

X =

= 3.40

Step 3 To Calculate Standard Deviation, σ

Standard Deviation, σ =

= 1.41
Where,
X = Average
n = Sample Size

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 Audit procedure and cash incentive calculation

Step 4 To Find Critical Value

Z cal = ( –μ)/ (σ/√n)

=
=0.40 / 0.23
= 1.73

Where,

X = Average
n = Sample Size
µ = Mean Value
= (1+2+3+4+5)/5= 3
σ = Standard deviation

The level of significance = 5% which means,

My confidence level is = 100% − 5% =95% = 0.95
According to Z critical value calculator,

The critical value of 5% level of significance, Z tab = 1.6449

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 Audit procedure and cash incentive calculation

Hypothesis 5

14%
29% Strongly Disagree
14% Disagree
Neither agree or Disagree
17%
26% Agree
Strongly Agree

Chart 05: Hypothesis 5

Interpretation:
According to Z critical value calculator at 5% level of significance, Z 0.05 = 1.6449 and Z cal

=1.73. If the Z cal value > the Z tab value, then null hypothesis will be rejected. So, I can say
null hypothesis (H0) is rejected. Because the Z cal value > Z tab value. So the decision I can
give that the maximum duration day cannot calculate because of application has done before
realization.

Findings:

In hypothesis 14% respondents strongly disagree, 14% disagree, 17% neither agree nor
disagree, 26% agree, and 29% strongly agree with my statement. That means 55%
respondents are saying that the maximum duration day cannot calculate because of
application has done before realization.

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 Audit procedure and cash incentive calculation

5.8.7 Research Findings:

Based on my research I have got findings those are given below:

H1: In first hypothesis I can see that 34 % respondent are Agree and 29 % respondent are
strongly agree. That means 63% respondents are saying that due to alternative calculation of
freight charge it is tough to identify exact freight amount’s, form that it is easily
understandable that due to alternative calculation of freight charge it is tough to identify exact
freight amount that’s why cash incentive calculation of agricultural exports is inaccurate.

H2: In first hypothesis I can see that 43 % respondent are Agree and 29 % respondent are
strongly agree. That means 72% respondents are saying that because of missing source
documents, auditors face problem when they calculate the cash incentive. So, form that
without doubt it is understandable that because of missing source documents, auditors face
problem when they calculate the cash incentive that’s why cash incentive calculation of
agricultural exports is inaccurate.

H3: In first hypothesis I can see that 28 % respondent are Agree and 33 % respondent are
strongly agree. That means 61% respondents are saying that short realization above 5% is not
acceptable. So, form that it is effortlessly understandable that if short realization above 5%
then it is not acceptable to give cash incentive that’s why cash incentive calculation of
agricultural exports is inaccurate.

H4: In first hypothesis I can see that 14 % respondent are Agree and 43 % respondent are
strongly agree. That means 57% respondents are saying that it is tough to find the eligible
items from commercial invoice. So, form that analysis it is easily appreciable that it is tough
to find the eligible items from commercial invoice to verify that party will get exact cash
incentive or not that’s why cash incentive calculation of agricultural exports is inaccurate.

H5: In first hypothesis I can see that 26 % respondent are Agree and 29 % respondent are
strongly agree. That means 55% respondents are saying that the maximum duration day
cannot calculate because of application has done before realization. So, without doubt it is
understandable that the maximum duration day cannot calculate because of application has
done before realization in that case party can not apply for cash incentive that’s why cash
incentive calculation of agricultural exports is inaccurate.

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 Audit procedure and cash incentive calculation

5.8.8 Recommendations:

H1: According to the agro file freight charge is most important value which directly related
to get exact cash incentive amount. That’s why I want to say that a party must have shown
exact calculation process of freight cost so that when we audit a file to verify so that we can
easily identify that a party is eligible or not to get the incentive amount. But due to alternative
calculation of freight charge we face critical situation to identify accurate amount of cash
incentive.

H2: When we audit agro file there has five source documents for getting all the information
also we have to cross check one to another to verify all the documents. But some cases there
have missing some documents like EXP paper, bill of lading paper, bill of export paper etc
that time we face problem. Sometimes that particular file has stopped for auditing as long as a
party does not submit all the papers. That’s why I want to say that agro processing sector
plays an important part for our country economy. So, every agro exporter must submit all the
required papers so that auditor cannot face problem during auditing and they can easily get
accurate cash incentive from Bangladesh bank.

H3: An importer has to send the full amount of export value. But there might be there some
issue so that importer cannot send the full amount. It would be acceptable when the amount
less than 5%. So, the exporter needs to full fill the importer all requirement to gain the full
amount of export value.

H4: For export products exporter enlisted all the items in sales contract paper which actually
indicate importer contract with exporter those particular items. So, when we audit it’s a
significant matter to verify all the items is eligible or not. That’s why we have to cross check
those items with commercial invoice but sometime we face difficulties to verify all the
eligible items. For verifying all the listed items first of all we match the particular items rate
by BAPA- (Bangladesh Agro Processor Association) then we calculate the file value like in
commercial invoice we take total value of particular items with divided net weight of
particular item. If rate exceed than exceed item we deduct from that specific item. Its means
on exceed amount a party cannot get cash incentive. So, it is tough to find the eligible items
from commercial invoice. That’s why agro exporter should honest when they apply for cash
incentive to the bank.

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 Audit procedure and cash incentive calculation

H5: After export agricultural products, an importer sends all the product value to the
exporter. From received date of all product value exporter need to apply for the incentive
within 180 days. But sometime it’s not happened. As the amount came through a bank so that
bank need to authorized and check the date carefully and applicant should to apply for the
cash incentive after received the export value not before recognized the export value.

5.8.9 Conclusion:

At present on agro processing sector cash incentive play a vital role for our country
development. To get cash incentive an exporter follows some criteria so that an exporter can
get accurate amount of cash incentive. I have discussed all the procedure that how they can
get cash incentive legally. But some problem I have found during auditagro files those
problem create pressure on an auditor because auditor face difficulties to calculate exact
amount of cash incentive. I have shown five significant problem from those problem one is
most important that if an exporter doesn’t submit their export paper that time an auditor can’t
check their file that time audit work totally stop as long as an exporter will not submit those
papers. Based on my hypotheses I have got findings and I have given some recommendation.
So, my recommendation discloses to solve those difficulties that an auditor can face.
Basically, an exporter must need to know all the governmental rules as well as chartered
accountants firm rules which documents must need to submit so that when an exporter apply
for cash incentive to the bank those files couldn’t stop for missing any paper. So, I have
suggested few solutions based on that problem like apply for cash incentive in 180days,
check and cross check all the export items with BAPA and the calculation process of exact
freight amount etc.

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 Audit procedure and cash incentive calculation

5.8.10 References:

1. calculators.org. (n.d.). calculators.org. Retrieved March 22, 2020, from

www.calculators.org: https://www.calculators.org/math/z-critical-value.php
2. Zikmund, W. G., Babin, Carr, J.C. and Griffin, M., 2013. Business research methods.
Cengage Learning.
3. Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2017). Accounting principle.United
States of America: Wiley.
4. Karmaker. S.C: Impact of cash incentive scheme of Bangladesh Government on
export promotion: An assessment, The journal of cost and management accountant
(December-2004): 22-29
5. Aziz Halim Khair Choudhury Chartered Accountants, http://ahkcbd.com/ Retrieved
19th February 2019.

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Audit procedure and cash incentive calculation

Appendix

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 Audit procedure and cash incentive calculation

Abbreviations:

L/C – Letter of Credit

S/C–Sales Contract

CI – Commercial Invoice

PL – Packing List

FE – Foreign Exchange

PI – Pro-forma Invoice

BAPA – Bangladesh Agro Processors Association

FOB – Free on Board

CNF – Commission and Freight

TOR – Terms of Reference

PRC – Proceed Realization Certificate

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 Audit procedure and cash incentive calculation

Survey Questionnaires
Assalamu Alaikum,

I am Sadia Afrin, student of BBA; from IUBAT (International University of Business,

Agriculture & Technology). I am conducting a report on topic, “The Audit procedure and
cash incentive calculation of agro processing sector in Bangladesh”.

For – (BUS 490): Practicum course. I need your valuable opinion. Let me assure you that all
the information provided by you will be used only for academic purpose and kept under strict
secrecy.

Information of Respondents

Name:

Gender:  Male  Female

Age:  20-25 Years  26-45 Years  More than 45 Years

Occupation: Gmail/Mobile No:

[Please put a tick mark for the following questions]

1. Due to alternative calculation of freight charge it is tough to identify exact freight amount
that’s why cash incentive calculation procedure of Agricultural exports might be inaccurate?

1. Strongly Disagree
2. Disagree
3. Neither Agree nor Disagree
4. Agree
5. Strongly Agree

2. Because of missing source documents, auditors face problem when they calculate the cash
incentive thus cash incentive calculation procedure of Agricultural exports might be
inaccurate?

1. Strongly Disagree
2. Disagree
3. Neither Agree nor Disagree
4. Agree
5. Strongly Agree

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 Audit procedure and cash incentive calculation

3. Short realization above 5% is not acceptable so cash incentive calculation procedure of

Agricultural exports might be inaccurate?
1. Strongly Disagree
2. Disagree
3. Neither Agree nor Disagree
4. Agree
5. Strongly Agree

4. It is tough to find the eligible items from commercial invoice that’s why cash incentive
calculation procedure of Agricultural exports might be inaccurate?
1. Strongly Disagree
2. Disagree
3. Neither Agree nor Disagree
4. Agree
5. Strongly Agree

5. The maximum duration day cannot calculate because of application has done before
realization as a result of cash incentive calculation procedure of Agricultural exports might be
inaccurate?
1. Strongly Disagree
2. Disagree
3. Neither Agree nor Disagree
4. Agree
5. Strongly Agree

[Thanks a lot for your co-operation]

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Audit procedure and cash incentive calculation

This is my joining letter of AHKC:

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