Corporate Financial Reporting Practices in Bangladesh: a Case on Leasing Companies

In: Business and Management

Submitted By Nawsher
Words 15148
Pages 61
Executive Summary

Non-Bank Financial Institutions (NBFIs) play a significant role in meeting the diverse financial need of various sectors of an economy and thus contribute to the economic development of the country as well as to the deepening of the country’s financial system. According to Goldsmith (1969), financial development in a country starts with the development of banking institutions.

As the development process proceeds, NBFIs become prominent alongside the banking sector. The major business of most NBFIs in Bangladesh is leasing, though some are also diversifying into other lines of business like term lending, housing finance, merchant banking, equity financing, venture capital financing etc. Lease financing, term lending and housing finance constituted 94 percent of the total financing activities of all NBFIs up to June 2006. Industrial Promotion and Development Company (IPDC) was the first private sector NBFI in Bangladesh, which started its operation in 1981. Since then the number has been increasing and in December 2006 it reached 29. Of these, one is government owned, 15 are local (private) and the other 13 are established under joint venture with foreign participation.

Leasing in Bangladesh, like in many of its peer countries, owes its origin to the efforts of the International Finance Corporation (IFC), Washington. At the instance of IFC, the first leasing company in Bangladesh, Industrial Development Leasing Company of Bangladesh Ltd. (IDLC) was set up in 1984 and commenced its operations in 1986, with a 20% shareholding from Korea Development Leasing Corporation. For several years, IDLC remained the sole leasing company in Bangladesh. However, the real momentum began in the 1990s. In 1997, there were 15 leasing companies in the country. Besides, some of the banks and financial institutions also added leasing divisions to their existing…...

Similar Documents

Corporate Financial Accounting and Reporting

...Corporate Financial Accounting and Reporting Tim Sutton second edition Corporate Financial Accounting and Reporting We work with leading authors to develop the strongest educational materials in business and finance, bringing cutting-edge thinking and best learning practice to a global market. Under a range of well-known imprints, including Financial Times Prentice Hall, we craft high quality print and electronic publications which help readers to understand and apply their content, whether studying or at work. To find out more about the complete range of our publishing please visit us on the World Wide Web at: www.pearsoned.co.uk Corporate Financial Accounting and Reporting Second Edition Tim Sutton Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world Visit us on the World Wide Web at: www.pearsoned.co.uk First published 2000 Second edition published 2004 © Financial Times Management 2000 © Pearson Education Limited 2004 The right of Timothy G. Sutton to be identified as author of this work has been asserted by him in accordance with the Copyright, Designs, and Patents Act 1988. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without either the prior written permission of the publisher or a licence permitting restricted copying in the......

Words: 163377 - Pages: 654

Differences in Financial Reporting Practices

...basic cause of international difference in financial reporting practice is the different degree of interference by governments in accounting. It is understood that “International Financial Reporting Standards (IFRS)” has been adopted in many countries around the world, as a minimum for the companies that are obliged for financial reporting. IFRS has been implemented in nearly one hundred and fifteen countries around the world, whilst phasing out the previous standard of rules of Generally Accepted Accounting Practice or more commonly known as GAAP. The United States is the only large major country to holdout and not adopt IFRS. IFRS is increasing its widespread backing from all over the world. All United States established companies are obliged to use the “Financial Accounting Standards Board FASB” (Wikipedia, 2012) many companies use these set of standards as they are “detailed and comprehensive” (Media Wiley) compared to the “International Accounting Standards Board IASB” (Wikipedia, 2012) which are more set in stone and less rule based. What the United States need is a set of high quality accounting standards improves comparability. “It is generally believed that IFRS has the best potential to provide a common platform on which companies can report and investors can compare financial information.” (Media Wiley) It is expected that if all countries adopt IFRS it will be beneficial for investors and others who use financial statements by reducing costs and......

Words: 815 - Pages: 4

Financial Reporting Quality and Corporate Governance: the Portuguese Companies Evidence

...79C FINANCIAL REPORTING QUALITY AND CORPORATE GOVERNANCE: THE PORTUGUESE COMPANIES EVIDENCE Cristina Gonçalves Góis Senior Lecture Instituto Superior de Contabilidade e Administração de Coimbra Instituto Politécnico de Coimbra Área temática: C) Dirección y Organización Palabras clave: gobierno corporativo; la calidad contable; información financiera; 1     FINANCIAL REPORTING QUALITY AND CORPORATE GOVERNANCE: THE PORTUGUESE COMPANIES EVIDENCE. ABSTRACT The main objective of this paper is to analyze the relationship between the composition and characteristics of corporate governance on the financial reporting quality of Portuguese companies. The major reference case studies on the relationship between corporate governance and the financial reporting quality are not validated by the results obtained. The results show that the board composition changes and its degree of independence do not produce any influence on the quality of the accounting information. Our study shows that although the main international guidelines relating to the rules of good governance have been followed closely by Portuguese institutions, the actual implementation of these rules did not occur. 2     1. INTRODUCTION The aim of this paper is to contribute to the study of the influence of the type of corporate governance on the financial reporting quality in countries with a tradition of continental accounting. Despite the profuse literature about this topic, adapted to......

Words: 10616 - Pages: 43

Term Paper on Corporate Social Responsibility Practice in Bangladesh

... WHAT IS CSR? Corporate Social Responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders. CSR is generally understood as being the way through which a company achieves a balance of economic, environmental and social imperatives (“Triple-Bottom-Line- Approach”), while at the same time addressing the expectations of shareholders and stakeholders. In this sense it is important to draw a distinction between CSR, which can be a strategic business management concept, and charity, sponsorships or philanthropy. Even though the latter can also make a valuable contribution to poverty reduction, will directly enhance the reputation of a company and strengthen its brand, the concept of CSR clearly goes beyond that. Key CSR issues: environmental management, eco-efficiency, responsible sourcing, stakeholder engagement, labor standards and working conditions, employee and community relations, social equity, gender balance, human rights, good governance, and anti-corruption measures. A properly implemented CSR concept can bring along a variety of competitive advantages, such as enhanced access to capital and markets, increased sales and profits, operational cost savings, improved productivity and quality, efficient human resource base, improved brand image and reputation, enhanced customer loyalty, better decision making and risk management processes.  ORIGIN OF CSR CONCEPT......

Words: 4869 - Pages: 20

Issues in Corporate Govarnance in Bangladesh

...Introduction Good corporate governance (GCG) in a corporate set up leads to maximize the value of the shareholders legally, ethically and on a sustainable basis, while ensuring equity and transparency to every stakeholder - the company's customers, employees, investors, vendors-partners, the government of the land and the community (Murthy, 2006). GCG is a must for ensuring the required values to different stakeholder groups. It enhances the performance of corporations, by creating an environment that motivates managers to maximize returns on investment, enhance operational efficiency and ensure long-term productivity growth. Consequently, such corporations attract the best talent on a global basis. It also ensures the conformance of corporations with the interests of investors and society, by creating fairness, transparency and accountability in business activities among employees, management and the board (Oman, 2001). Again, GCG increase public confidence in a corporation, and lowers the cost of capital for investment. According to a McKinsey study (2002), over 60% of investors cite Good Governance practices in a corporation as a key factor in their investment decisions. Today, GG becomes a slogan and a pride. Here, we can uses accounting as a mean for establishing and retaining corporate governance. Accounting is a process of compiling information for reporting the internal affairs of any entity to different stakeholders at the end of a certain interval. It is defined......

Words: 4439 - Pages: 18

Corporate Governance in Bangladesh

...Term Paper On Corporate Governance in Bangladesh Prepared for Professor Dr. Akbar Ali Khan Faculty Prepared By Alim Al Razi ID: 13174044 BRAC Business School August 16, 2013 Alim Al Razi ID: 13174044 Term Paper Corporate Governance & Social Responsibility BRAC University, August 2013 ABSTRACT There is a growing sentiment that poor corporate governance is one of the forces to blame for the collapse of the financial market since it failed to ensure the transparency, accountability and integrality of companies, particularly on matters of corporation. Bangladesh is one of the third world countries having many opportunities in corporate sector and also one of the least developed countries in the south-east Asia that has issued corporate governance guidelines. This was a timely attempt by the regulatory market of the country to keep up with the worldwide concern for reforming corporate monitoring structures. The guidelines are mandatory for all the companies listed in the stock exchange. In the wake of the free-market economy, many investors are interested to invest in Bangladesh because of its competitive labor costs and abundance of workers. The government of Bangladesh also offers significant incentives to encourage foreign investment. In this scenario, attempts to enhance corporate governance by adapting corporate governance guidelines, best practices and respected provisions of company law will enable the country to be a better place for investment.......

Words: 12053 - Pages: 49

Effectiveness of Corporate Social Responsible Practices Handled in the Petroleum Industry in Bangladesh: a Case Study of Shell

...Effectiveness of Corporate Social Responsible practices handled in the petroleum industry in Bangladesh: A case study of Shell By Delwar 2014 Dissertation submitted to Anglia Ruskin University in partial fulfilment of the requirements for the Masters Programme Abstract The research issue is that multinational organisations in the petroleum industry such as Shell and British Petroleum are being pressurised by their stakeholders to take responsibility for their business activities. In view of stakeholder pressure, companies have developed and implemented CSR policies and practices. However, the effectiveness of these CSR policies and practices is questionable as the effects of companies activities have negatively impacted the lives of their stakeholders and continue to do so (Amao, 2013). There is extensive research being carried out on understanding the effectiveness of multinationals CSR practices as there exists a wide gap between what companies are saying and what they are actually doing. Practising CSR makes companies responsible for looking after the needs of their stakeholders, makes companies take steps to protect the environment, improve people's livelihoods, motivates employees and increases organisations' effectiveness and efficiency. Multinational state they are practising CSR. Yet their activities have caused much harm to stakeholders. Shell's activities in Nigeria have caused severe health risk to families’ drinking......

Words: 13991 - Pages: 56

Sound Financial Reporting Is Good for Bringing Confidence Back to the Corporate World.

...[pic] SOUND FINANCIAL REPORTING IS A GOOD THING FOR BRINGING CONFIDENCE BACK TO THE CORPORATE WORLD Submitted By: Ahmed Shafiul Huq 801414063 Principle of Accounting (EIB505) Section: B Executive Master of Business Administration Submitted To: Mr. Mohammad Rakib Uddin Bhuiyan Assistant Professor Department of International Business Faculty of Business Studies EXECUTIVE SUMMARY A company’s financial reporting amalgamates important documents to create an effective spreadsheet to simplify the financial data of an organization. It captures much of the information that organizations prepare, publish, and use. Financial reporting plays an integral role in the capital markets and economic stability and growth, and efforts to enhance its quality are vital. A Sound Financial Reporting provides us relevant, meaningful, reliable, accurate and comprehensive reporting of management stewardship whether in the form of numbers or other operating data. It is increasingly important for businesses to be financially transparent and for governments to establish a sound regulatory environment for corporate financial reporting. Sound financial reporting can benefit business by some ways just like valuing business, easy to......

Words: 3507 - Pages: 15

Aol Case Financial Reporting

...  the  “quality  of  earnings”  (see  page   two  of  article,  top  paragraph).  What,  in  your  opinion,  would  constitute   “high”  quality  earnings?       Quality  of  earnings  refers  to  the  way  earnings  are  defined  and  to  what  are   attributed.  High  quality  earnings  are  created  as  a  consequence  of  higher  sales  or   lower  costs  within  a  conservative  accounting  approach.  Earnings  defined  within  an   aggressive  accounting  approach  can  not  be  defined  "High  Quality"   4. Which  financial  statements  were  affected  by  the  charge?  How?       The  Income  Statement  is  affected  by  the  new  cost  given  by  the  consolidation  of  all   past  deferred  marketing  expenses.  Costs  increased  by  $385  million.   The  Balance  Sheet  is  affected  be  the  cancellation  within  the  assets  of  the  "deferred   subscriber  acquisition  costs".  Assets  decreased  by  $314  million.   The  Cash  Flow  Statement  is  based  on  the  Indirect  Method  and  thus  contains   references  to  the ......

Words: 1638 - Pages: 7

Financial Reporting Case Study

...Tamira is feeling pressured by her boss to provide up-to-date financial statements for FY ending December 31, 2010. She has only 24 hours to post adjusting entries to appropriately show her company’s correct financials for her boss’s dinner meeting with a bank. Tamira knows that the financial statements will not be ready in time for the dinner meeting with the bank because she does not have enough time to prepare and post the adjusted entries. Under the pressure from her boss and a tight 24-hour deadline, Tamira decides to estimate many expense accrual accounts. She uses a low estimate, which in turn will make the company’s financials look better than what they actually are. This is an unethical decision. Tamira is not following GAAP. The aim of GAAP is to make the information in financial statements is reliable, relevant, and comparable. By using low estimates, she is overstating her company’s financials, which could ultimately result in her company securing a bank loan. The pressure put on Tamira by her boss to provide update financials in 24 hours caused her to make an unethical decision. Tamira could have taken several different courses of actions that ultimately support GAAP principles. She should have communicated with her boss that she did not have enough time to complete the up to date financials for FY 2010. If it was so important for her company to secure a bank loan, it should be Tamira’s top priority to provide her boss with accurate information. She should have...

Words: 499 - Pages: 2

Reporting Practices and Ethics in Financial Healthcare

...Financial Reporting Practices and Ethics in Healthcare Jeanette Jordan 03/07/16 HCS-405 Prof. Adrian Parker Abstract Financial management is a vital part of organizational effectiveness, it is a discipline with a long and respected history. Health care service delivery is a business, and the concept of financial management assists in balancing the inflows and outflows that are a part of the business. The managers within a health care organization will generally have one of three views the financial view, the process view and, the clinical view. Health care managers must of necessity interact with one another. Thus, managers holding different views will be required to work together. So, health care managers who understand health care finance will be able to interpret and negotiate successfully such interactions between and among viewpoints. (Mohamed Refaat, 2016) There are four elements of financial management planning, controlling, organizing and, decision making. In planning the financial manager identifies the steps that must be taken to accomplish the organization's objectives. Thus, the purpose is to identify objectives and then to identify the steps for accomplishing these objectives. In controlling the financial manager makes sure that each area of the organization is following the plans that have been established. In organizing the financial manager decides how to use the resources of the organization to most effectively carry out the plans that have been......

Words: 1131 - Pages: 5

Corporate Financial Reporting

...Report on Disclosure of BASs & BFRSs By Golden Harvest Agro Industries Ltd. & Bangladesh Steel Re-Rolling Mills United International University QUEST FOR EXCELLENCE acade Report On: Golden Harvest Agro Industries Ltd. & Bangladesh Steel Re-Rolling Mills Limited Topic: Disclosure of BASs & BFRSs Course Title: Corporate Financial Reporting Course Code: AIS 4303 Submitted To: James Bakul Sarkar Assistant Professor & Deputy Director, BBA Program United International University Submitted By: Name | ID | Section | Fyaz Mahbub Rohan | 114 121 025 | A | Md. Ariful Islam | 114 121 045 | | Md. Hasan Alif | 114 121 091 | | Safayet Mustafa | 114 121 107 | | Ahmed Zubaier | 114 121 020 | | Anik Kumar Das | 114 121 064 | | Moniruzzaman Khan | 114 131 048 | | Date of Submission: 20th April 2016 Fyaz Mahbub Rohan (114 121 025): a. Front Page DesignContribution of Group Members b. Introduction c. Summary of BAS s & BFRSs d. Company Overview e. Disclosure of BAS s & BFRSs f. Conclusion g. Data Collection Md. Ariful Islam (114 121 045) a. Letter of Transmittal b. Executive Summary c. Introduction d. Summary of BAS s & BFRSs e. Disclosure of BAS s & BFRSs Md. Hasan Alif(114 121 091) a. Summary of BAS s & BFRSs b. Disclosure of BAS s & BFRSs ......

Words: 24914 - Pages: 100

Ulc Leasing Company of Bangladesh

...Project on Financial Statement Analysis of United Leasing Company Limited Project on Financial Statement Analysis of United Leasing Company Limited Prepared for Dr. H. M. Mosarof Hossain Professor School of Business (MBA Program) North South University Prepared By Syeda Zabeen Ahmed, ID # 0910683060 Khadiza Akter, ID # 0930401060 Sadia Choudhury, ID # 1010366060 Toufiqur Rahman, ID # 1030291060 Md. Nazmul Ahsan, ID# 1010236060 April 08, 2011 Dr. H. M. Mosarof Hossain Professor School of Business (MBA Program) North South University. Submission of the BUS635 Group Project Dear Sir, We are pleased to submit the group project paper: “Financial Statement Analysis of United Leasing Company Limited” that you have asked us to prepare in an effort to better understand different Financial Analysis techniques. The topic has enabled us to better comprehend how United Leasing Company performed for last years and what they would do to improve their operations. It has been a pleasant experience working on this report. We submit it for your kind consideration and thank you for your guidance. If further clarification regarding this report is found required, we would be available by any means. Sincerely, Syeda Zabeen Ahmed, ID # 0910683060 ---------------------------- Khadiza Akter, ID # 0930401060 ---------------------------- Sadia Choudhury, ID # 1010366060 ---------------------------- Toufiqur Rahman, ID # 1030291060 ......

Words: 4589 - Pages: 19

Financial Analysis of Selected Pharmaceutical Companies in Bangladesh

...iiste.org Financial Analysis of Selected Pharmaceutical Companies in Bangladesh Md. Tofael Hossain Majumder Department of Accounting and Information Systems, Faculty of Business Studies Comilla University, Comilla, Bangladesh. Email: tofael_cou@yahoo.com Mohammed Mizanur Rahman School of Business and Economics, Atish Dipankar University of Science and Technology Dhaka, Bangladesh. Email: mizancu@yahoo.com Abstract The Pharmaceutical industry plays a vital role in the socio-economic development of Bangladesh. But the net profit of this industry has decreased for the last few years. This study is designed to review the financial performance of this industry, to test its strengths and weaknesses. The financial performance of this industry is measured in terms of Ratio (Profitability, Liquidity, Solvency and Activity ratio) Analysis and in terms of Testing Financial Soundness by using Multivariate Discriminate Analysis (MDA) as developed by Prof. Altman. For the source of data mainly relied on Annual Reports and official records. It was observed from the study of the financial statement of the Pharmaceutical industry that the profit earning capacity, liquidity position, financial position and the performance of the most of the Pharmaceuticals are not in sound position and it was also observed that the most of the Pharmaceuticals has a lower level position of bankruptcy. The reasons behind this position of the industry are inefficiency of financial......

Words: 13441 - Pages: 54

Corporate Governance Practice of British American Tobacco, Bangladesh Ltd

...UNIVERSITY OF DHAKA CORPORATE GOVERNANCE PRACTICE OF BRITISH AMERICAN TOBACCO, BANGLADESH LTD. JULY’ 2012 NAHID RIJWAN ID# 3-09-17-033 University of Dhaka Department of Management Studies MBA (Evening Program) Summer, 2012 Term Paper Course Title Course code Corporate Governance & Diplomacy EM 557 Course Teacher Md. Mesbah Uddin Topic Term Paper: Corporate Governance Practice of British American Tobacco, Bangladesh Ltd. 29- 07- 2012 Date Submitted by Name Nahid Rijwan Roll 3-09-17-033 CONTENTS Topic CHAPTER – 1 About British American Tobacco Bangladesh Business Principles of BAT, Bangladesh Standards of Business Conduct of BAT, Bangladesh: CHAPTER – 2 Corporate Governance Statement Board of Directors of BAT Bangladesh and Their Roles Relationship with Shareholders Accountability and Audit Compliance with Legal Requirements Employees Standards of Business Conduct CHAPTER -3 Corporate Social Responsibility Statement Probaho Socially Responsible Tobacco Production (SRTP) Deepto Afforestation CHAPTER - 4 Auditor’s Report to The Shareholders 16 12 12 13 14 15 6 7 9 10 10 10 11 1 2 3 Page CHAPTER - 5 Comparative Analysis of Bat Bangladesh’s Corporate Governance Compliance Status of compliance with the Provisions Denoted in the Code of Corporate Governance for Bangladesh, March 2004 Status of compliance with the Conditions Imposed by the Securities & Exchange Commission's Notification 21 19 18 REFERENCES 23 ANNEXURE - I 24 ...

Words: 13287 - Pages: 54

All Genres | Neurose-Fansub | On va s'aimer un peu beaucoup