Jan Mar Journal 2018 Final

GLOBAL
RECOGNITION January - March 2018
OF ICAB
Recognition of ICAB membership by ICAEW
Membership Scheme of The Institute of Chartered Accountants of England and Wales (ICAEW) allows the members of ICAB
to apply for ICAEW membership based on their experience.
Eligibility criteria of this membership scheme are a series of questions which assess ICAB Member’s experience, achievements,
skills and expertise. Each application must be supported by an eligible sponsor. Applicants need to complete an Examination
2041
of Experience.
Details of ICAEW Membership Scheme is available at http://www.icaew.com/membership/becoming-a-member/
members-of-other-bodies/campaigns/pathways-to-membership.
It is noted that ICAB signed a Memorandum of Understanding (MoU) with the Institute of Chartered Accountants in England
] MOVING AHEAD ]
and Wales (ICAEW) in 2009 and in continuation and successful implementation of the said MoU, the follow up phase of the
same MoU was signed with the ICAEW in 2014 and in London in 2017. ICAB has been working with ICAEW as the learning and
professional development partner, and also recognized as an approved tuition provider of ICAEW.
As per MoU ICAB Members can be the members of ICAEW after successful completion of 04 papers out of 15. These
BANGLADESH
members have the opportunity to apply for UK Practicing Certificate (PC) subject to meeting the standard ICAEW PC
requirement.
CPA-Ireland Membership is open to ICAB Members

ICAB has signed a Mutual Recognition Agreement (MRA) with the Institute of Certified Public Accountants in Ireland (CPA
Ireland) on December 2012.
According to the signed MRA to attain the CPA Ireland membership, ICAB members have to complete and pass only 01 paper
Bangladesh Moving Ahead
out of 17 papers of CPA Ireland examination.

ICAB members need to pass CPA Ireland’s only one examination from the Professional Stage 2, “Strategy and Leadership” and
an On-line “Overview of Irish Tax and law”.
Recognition of ICAB Membership by CIPFA, UK

Members of the Institute of Chartered Accountants of Bangladesh (ICAB) are eligible to apply for membership of the
Chartered Institute of Public Finance and Accountancy (CIPFA), a globally recognised membership body for the public sector.
An MoU between ICAB and CIPFA, UK was signed on 28 January 2017.Under this MoU ICAB member can be the member of
CIPFA upon fulfilling some criteria.
ICABMembers in good standing having five or more years post-qualification public sector experience are eligible for Full
Membership of CIPFA as Chartered Public Finance Accountant (CPFA) and the members having fewer than five years
2024
post-qualification public sector experience are eligible for Affiliate member of CIPFA (CIPFA Affiliat).
ICAB members having CIPFA Affiliate membership, or having no working experience in public sector can gain CPFA status by
successfully completing exams of only two papers i.e. Public Sector Financial Reporting and Strategic Public Finance from the
CIPFA qualification.
IFRS Agreement
The Institute of Chartered Accountants of Bangladesh (ICAB) signed an agreement with the International Financial Reporting
Standards (IFRS) Foundation which empowers only ICAB in Bangladesh for development and publication of Bangladesh
2021
Financial Reporting Standards (BFRS), Bangladesh Accounting Standards (BAS) and BFRS for SMEs.
Under this agreement, ICAB has got the copyright license to publish both in print and online electronic editions of BFRS, BAS
and BFRS for SMEs using IFRS, IAS and IFRS for SMEs as issued by the International Accounting Standards Boards (IASB) and
to distribute English language version of these standards in Bangladesh. In accordance with the terms of agreement ICAB has
entered into formal collaboration with the IFRS Foundation and committed to a convergence path towards the full adoption
of IFRS.
January - March 2018
2018
Other Memberships
ICAB is an active member of International Federation of Accountants (IFAC), Confederation of Asian and Pacific
Accountants(CAPA) and South Asian Federation of Accountants(SAFA). ICAB is very proactive in SAFA and CAPA. Current
SAFA President has been elected from ICAB and the Executive Secretary appointed from the same Institute. In the year 2012,
2013 and 2014 ICAB has been highly appreciated by IFAC for its continued commitment and compliance with Statement of
Membership Obligations (SMOs), which cover the requirements of quality assurance, education in line with international
education standards, auditing, financial reporting and public sector accounting standards, auditing, investigation and
disciplinary matters.
www.icab.org.bd
The Bangladesh Accountant
EDITORIAL BOARD CONTACT US

Chairman CA Bhaban
Dr. Jamshed S A Choudhury FCA 100 Kazi Nazrul Islam Avenue
Dhaka 1215, Bangladesh
Co-Chairman 880 2 9115340, 9612612100

9117521, 9137847 (Off.)
Harun Mahmud FCA
880 2 9125266
Members secretary@icab.org.bd
Akhtar Sohel Kasem FCA facebook.com/icabdhaka
A F Nesaruddin FCA icab.org.bd
Nasir Uddin Ahmed FCA
Md. Shahadat Hossain FCA
Gopal Chandra Ghosh FCA
Moddassar Ahmed Siddique FCA
Published by the Editorial Board of the Council
Amanullah Khan FCA
The Institute of Chartered M Idris Ali FCA ISSN 1993-3649
Accountants of Bangladesh (ICAB)
Masih Malik Chowdhury FCA
Dr. Md. Abu Sayed Khan FCA
Md Abdus Salam FCA
Mohammad Zahid Hossain FCA
S. M. Rafiqul Islam FCA
Dr. ASM Hossain Tayiab FCA
Mohammad Redwanur Rahman FCA
Muhammad Aminul Hoque FCA
Md. Zahidul Islam Khan FCA
Sk. Md. Tarikul Islam ACA
Dhali Tanvir Ahmad Siddiqui FCA
Anika Sultana FCA
Bidhan Chandra Mandal ACA
Md Anwar Hossain ACA
Ismat Jahan ACA
Afratul Kawsar ACA
Mustaq Ahmed ACA
Sazib Kumar Saha ACA
Md. Faruk Hossain ACA
Zoinul Abedin Sakil ACA
Khosnur Jahan ACA
Md. Abdul Wahab Akanda ACA
Ataur Rahman ACA
Farhad Hussain ACA
Md. Muktadir Hossain ACA
Momena Hossain Rupa ACA
DISCLAIMER Chairman DRC-ICAB
"The opinions expressed in this
publication are those of the
respective authors themselves Member Secretary
and do not necessarily reflect the Mohammed Emdadul Haque FCA
views of the Editorial Board of the Design & Print
Institute of Chartered Technical Adviser, ICAB Dominant Printing & Packaging
Accountants of Bangladesh M 01794550916
(ICAB) or ICAB itself." E alamgir.dominant@gmail.com
JANUARY - MARCH 2018 | The Bangladesh Accountant 1

ICAB PUBLICATIONS P6
ICAB publications include, inter
alia, a quarterly journal titled 'The
Bangladesh Accountant' and a
monthly mouthpiece 'ICAB News
Bulletin'.
In the quarterly journal articles of

ICAB Members, Members from
other Accountancy bodies,
Academics and Business Leaders
from home and abroad are
published. These articles cover a
wide area of our profession, i.e,
Auditing, Accounting, Financial
Contents
and Economic.
The monthly news bulletin

publishes latest ICAB events
mostly of the month it is January - March 2018
published. This bulletin also acts
as an information hub for the
Members to keep up to date what
is happening in and around ICAB.
In addition to these two regular

P4 Editorial P6 A Ringing Bell: Alarm for the
publications, ICAB also publishes Audit Professionals
books, monographs, booklets and Md. Rokonuzzaman FCA
Students’ Study Manuals P5 President’s Desk
regularly. P11 Cyber Security in Banks and
Financial Institutions:
A Highbrow Exegesis
M Jalal Hussain FCA
P17 Arbitrary and Unlawful

Attachment of Bank Accounts
of Assessees Not in Default by
Tax Authorities
K M Hasan FCA
P23 Human Resources (HR)

Disclosure Practices Evidence
from Commercial Banks of
Bangladesh
1
Imtiaz Alam FCA
2
Fahmida Akhter
3
Mohammad Rokibul Hossain
P32 Factors Determining Glass

Ceiling That Influences Women
Career Development:
A Study On Selected Private
Commercial Banks in Dhaka City
1
Sheikh Emran Shirage
2
Md. Shawfiqul Islam
3
K.A.M. Rifat Hasan
for more details, please visit
www.icab.org.bd
2 JANUARY - MARCH 2018 | The Bangladesh Accountant

Digital Highlights
www.icab.org.bd
P41 Pitfalls of Existing Rules on P94 Solar Energy: Silent Revolution News & Events
Investment Abroad by in Power Sector of Bangladesh
Bangladeshis Mohammad Zahid Hossain FCA Circular & Notice
M Idris Ali FCA
News Bulletin
P98 So You Aspire to be a CFO?
P45 Proposed CGG, Criticism and Muallem A Choudhury Journal
Recommendations
Muhammed Omar Faruk Ripon FCA P102 Intellectual Capital Disclosures:
In Bangladeshi Ready-made Garments
P53 Wellsprings of Government's Sector Status and Trends
Revenue and Propositions for 1
Leena Afroz Mostofa Chowdhury
Improving Revenue Accumulation 2
Sharmin Akter
S M Ashfaqur Rahman ACA 3
Farhana Sultana ACA
P65 Corporate Environmental
P112 Financial Determinants of Stock Price in
Reporting: An Immanent Critique
1
Dewan Mahboob Hossain Banking Sector: Evidence from Listed Banks
2
Amirus Salat in the Dhaka Stock Exchange (DSE) Ltd.
1
Arif Ahammed
P73 Blockchain Technology and
2
Amirus Salat
Bitcoin Currency:
The Features and Potentiality P122 Role of CFOs in Technological Transformation
M S Siddiqui Dewan Nurul Islam FCA
P77 Prospects and Challenges of P126 Bangladesh as Neo-MIC:

Financing through Capital Market Opportunities and Challenges
M. Shaifur Rahman Mazumdar FCA Shahidul Islam ACA
P84 Yoon Model and Modified Jones P130 Some Thoughts on

Model in Detecting Earnings Performing Dynamics in SoCBs
Management: An Empirical Study Masih Malik Chowdhury FCA
on Cement Industry of Bangladesh
1
Mohammad Saif Uddin Bhuiyah
2
Mohammad Alam Shikdar
3
Sabina Yesmine

Editorial
“January-
This
threshold US $1,026 per capita income
for trashing the line of least developed
countries.
However, Bangladesh has to maintain

March issue its ongoing development trend until
2024 to get the developing status
contains permanently. At present it has been
articles depict ranked 99th as the most competitive
economy in the world, up seven
the current notches from the last year’s ranking
economic which is encouraging for us. We hope

government would initiate pragmatic
scenario, policies to expedite development
wheels of the country as our land has
problems and enormous opportunities to grow up.
prospect. ICAB is maintaining strong liaison with

the Ministries and other regulatory
Readers would bodies to help the government in
formulating policies including
find profound proposed Companies Act, Trade
information on Dear valued readers, this is the

Organization Act, etc.
the direction consecutive two years I have been Government has envisaged a plan to
attain status of developed country by
of economy heading the Editorial Board under
which the ICAB quarterly journal ‘The
2041. To achieve this long-expected
going through
dream, development of infrastructure,
Bangladesh Accountant’ is being
power, energy, technology,
published. I hope we shall bring the
towards publication in more innovative
knowledge and skilled manpower are
ardent necessary. Regrettably still our
getting manner in coming days. This issue of
the journal would come out when
education system requires to match
permanent Bangladesh has attained the status of

with the need of our industry which is
sine qua non. Coalition between the
developing country. UN committee
status of for development policy declared
education, profession and skills are
highly needed for ensuring sustainable
developing Bangladesh as Developing Country in
March 2018.
development.
country.” The Bangladesh Accountant specially
Our economy is gradually expanding focuses on the macro and micro
and it will be 30th largest economy of economy, trade and commerce, capital
the world in terms of purchasing Market, investment, international
power parity (PPP) and Gross economy, etc. This January-March
Domestic Products(GDP) in next few issue contains articles depict the
years. To assess this eligibility, current economic scenario, problems
Bangladesh has already achieved the and prospect. Readers would find
benchmark of three specially profound information on the direction
designed indices; income, human of economy going through towards
assets and economic vulnerability getting permanent status of
Dr. Jamshed Sanyiath that means Gross National Income developing country.
Ahmed Choudhury FCA (GNI) per capita. It has already
Chairman – Editorial Board
Council Member - ICAB crossed the income criterion My warmest greetings to you all.

President’s Desk
“confident
I am
that
the readers of
The
Bangladesh
Accountant
must have
observed that
over the years,
the journal has
progressed and
maintained its
standard as
authority on Needless to say, it is a mammoth The current issue contains a number
of articles written by some of our
task to bring a new issue of a
finance and Journal on Accounting, especially
learned external accounting
professionals, academics and other
accounting for when that Journal aims to publish
intelligentsia. We are proud to bring
high quality manuscripts. This
the responsibility has been shouldered
this issue for our esteemed readers.
academicians by a very efficient editorial board Dear members, as you read through
and led by its Chairman. Papers that the January-March 2018 Issue, I
have been contributed by would like to recap that the success
professionals intellectuals deserve special of our Quarterly Journal largely
acceptable to appreciation. depends on your active involvement
society and I would like to take this opportunity
and those of the contribution of your
colleagues and friends. We hope you
other economic to extend my heartfelt gratitude to will keep supporting our endeavour
field.” all the members of the editorial
board, reviewers and contributors
tirelessly.
for their talented work. I believe Finally, I appreciate support from

that this issue will be a giant leap our members as we strive to make
towards a more insightful look at our Journal an authoritative journal on
our professional milieu. finance and accountancy profession.
Dewan Nurul Islam FCA

President-ICAB

A Ringing Bell
Alarm for the Audit Professionals
Md. Rokonuzzaman FCA
P
reamble following the standards and
methodologies adopted by the
Over last couple of ICAB (Institute of Chartered
decades, few incidences Accountants of Bangladesh). As
including dissolution of Arthur the general shareholders cannot
Andersen (the then one of the involve themselves in the day to
big 5 global accounting firms) day operations of the company,
from the globe in 2001 and they believe that auditors would
recently declared two years ban examine the accounts and
on audits of listed entities by related other financial
Price water house Coopers information and give them a
(popularly known as PwC) with credible report for their
substantial amount of financial knowledge and information.
penalty in India have given Like all other professions it has
intensive jolt over the so many challenges too. Despite
profession of audit. In all challenges, people tend to
The Author is a Bangladesh, we have also see auditors as a critical filter
Chartered Accountant and examples of failure of different sitting in between working
a Fellow Member of the magnitude! In the wake of such management and the investors.
Institute of Chartered Accountants great shocks, we, the audit Audit is an organized profession
of Bangladesh-ICAB professionals, must critically run by professional accountants
look into our own practice governed by the rules and
models and methodologies with guidelines of IFAC (International
clear objectives to reposition Federation of Accountants) and
ourselves, wherever needed, so various laws within the country
that potential disaster can be a firm operates in.
avoided!
International Standards on
Audit, by its nature, is a noble Auditing (ISA) promulgated by
profession across the globe for the IFAC/IAASB delineate
the sensitivity and value of the numerous guidelines for the
services it delivers to society audit professionals to apply in
but in particular, trade and their audit and similar other
commerce communities! engagements. Apart from it,
Functional part of the individual country within its own
management is responsible for jurisdiction makes various laws
reporting of financial and regulations to regulate the
information under the professionals and their
respective legal jurisdiction the activities. In addition, one of the
company operates in. On the units of IFAC known as
other hand, as required by law, International Ethics Standard
auditors (Chartered Board for Accountants (IESBA)
Accountants who are licensed has documented Code of Ethics
to carry on the profession of applicable for the professional
audits), an independent party accountants.
being appointed by the
shareholders in the Annual The core of all these is to make
General Meeting (AGM), sure that accountants, while
perform audit functions discharging their duties and

ARTICLE
responsibilities, would act and deliver with utmost entities, and poor financial reporting –
diligence applying their competence and were able to hide billions of dollars in
appropriate skills. Despite having all these debt from failed deals and projects. Chief
regulations in force, we often come across Financial Officer Andrew Fastow and
information on the failure of the auditors to other executives not only misled Enron's
conduct their duties as diligently as they are board of directors and audit committee
expected to. on high-risk accounting practices, but
also pressured Arthur Andersen (the
Enron Incidence and Consequences auditor of Enron) to ignore the issues.
The Enron scandal, publicized in October 2001, By the unusual effect of the engineered
eventually led to the bankruptcy of the Enron financial information the market price of
Enron soared up to $90.75 in mid-2000
which again dropped to less than $1 by
We all know that we have many end of November 2001. The US Securities
and Exchange Commission started
limitations while auditing the probing into the fact and the Houston
financial statements of a company. based Dynegy wished to purchase Enron
at that extreme low price, but the deal
The methodologies that are naturally failed. Many executives at Enron
prescribed as standards for the audit were indicted for a variety of charges and
some were later sentenced to prison.
professionals hardly allow detecting Enron's auditor, Arthur Andersen, was
intentional frauds and forgery that found guilty in a United States District
Court of illegally destroying documents
might be built into the financial relevant to the SEC investigation which
statement under review. In fact, the voided its license to audit public
companies, effectively closing the
respective legislation does not business.
necessarily wish auditors to unveil all
these intentional fraudulent treatments We as audit professionals would pay
focus on what termed as auditor’s failure
in the financial information! with respect to such unprecedented
corporate damage. Big picture-wise
auditors were blamed for their failure to
identify fake and inflated financial
Corporation, an American energy company based information which eventually resulted in
in Houston, Texas, and the de facto dissolution of millions of dollars loss in the hands of
Arthur Andersen (AA), which was one of the Big 5 shareholders. On the other hand, while
audit and accountancy firms in the world. In SEC approached to investigate into the
addition, being the largest bankruptcy matters, the respective partner of Arthur
reorganization in American history at that time, Anderson was found to have instructed
Enron was cited as the biggest audit failure. his office to shred all documents related
to Enron audit! So, whatever else the
Enron was formed in 1985 by Kenneth Lay after audit firm wished to say supporting their
merging Houston Natural Gas and Inter North. logic, methodologies etc. really did not
Several years later, when Jeffrey Skilling was work saving them. The ruling against
hired, he developed a staff of executives who – by Arthur Anderson was however
the use of accounting loopholes, special purpose

A Ringing Bell
developments until the world

recession hit them putting them
awestruck. In 2009 a scam
came out where it was
mentioned that Mr. Ramalinga
Raju, the Chairman had
manipulated the accounts in
several ways leading to a
disaster which he admitted
later. This incident brought
about a cyclone of concern and
confusion across corporate
world in India in particular and
the rest of the globe at large. As
instant consequences legal
actions followed including
arresting of Raju brothers, CFO
of Satyam and so on.
overturned at the US Supreme • Evolving a new law
Court later, but by that time codifying corporate But as audit professionals our
Arthur Anderson had lost governance rules and many attention got locked elsewhere
majority of their customers and related regulations in the US seeing that PwC, the respective
had ceased operating. The (one of the fastest enacted audit firm who were their
Arthur Anderson had to die a laws in the history of US); auditors over the years failed to
sad death in 2002 putting detect the fraudulent
thousands of white collar • Almost concremation of treatments in the financial
people workless across the Enron and their auditor statements they audited!
globe! Unfortunately, except for Arthur Andersen (the then Sometime in 2015 the special
few directly guilty of offence, one of the Big 5s); CBI court held Raju and nine
thousands of professionals other officials guilty of cheating.
faced the consequence which Satyam Incident and Among those held guilty were
was not due to their fault! Consequences two former partners at PwC
who were engaged dealing with
This unprecedented disaster Satyam Computer Services Ltd. audits of Satyam financials.
brought about some was incorporated in 1987 as a
discernable changes in the private limited company in India Satyam being a listed company,
market which were thought to for providing software the case naturally came into the
be inevitable consequences and development and consultancy attention of the Security and
were visible in terms of: services to large corporations. Exchange Board of India (SEBI).
The company was promoted by They took several actions
• Bankruptcy of one of the B Rama Raju and B Ramalinga including barring Raju brothers
largest companies in the US; Raju. from Capital markets. After
having due process of
• Elimination of an The company over the years investigation and related other
accounting firm Arthur became one of the largest actions, SEBI had recently
Anderson with working technology industries in India declared their verdict against
people of about 100 and thereafter there was no PwC, the audit firm recording
thousand across the globe; looking back on its way to next five charges as follows:
level expansions and

ARTICLE
Sl. What went court, but by the time they get a

Observation by SEBI Quantiﬁcation favorable order, if at all, a
no. wrong
substantial damage would take
1. Non-existent The auditors ignored first set Rs. 5,040
cash/bank of confirmations received crore place in the image of the audit
balances directly from the banks and profession. Moreover, PwC
relied conclusively only on being one of the big 4s in audit
those received from the firm network in the globe, the
company, showing deposit expected sense of disgrace
balances, which were tallying
with what was shown in the would go even more on the face
books. of the audit profession.
2. Inflated sales The auditors failed to do the 7,588 fake Ringing Bell Awakening
revenues walk-through tests in respect invoices
of the invoices; feigned Audit Professionals
ignorance of the internal
control mechanism including We all know that we have many
XL porting in IMS and OF limitations while auditing the
stages; chose to ignore financial statements of a
internal audit reports; relied
on the ledger entries prepared company. The methodologies
by the company and did not that are prescribed as standards
conduct the audit as for the audit professionals
mandated by the AS or the hardly allow detecting
guidance note with bonafide intentional frauds and forgery
intention of doing an actual
that might be built into the
audit.
financial statement under
3. Overstated PwC failed to perform the basic Several 100 review. In fact, the respective
debtors’ audit function of ensuring crores legislation does not necessarily
positions adequate external
confirmations of debtor wish auditors to unveil all these
balances from the debtors in intentional fraudulent
question, which in turn treatments in the financial
resulted in it failing to notice information! However, a
the inflated and false figures sensible audit may act as critical
concerning SCSL.
deterrent factor for the
4. TDS benefits Not fraudulent practices/intentions
claimed at quantified of the functional managements.
variance with
TDS shown in From the cases we discussed so
books
far, to me it was not just a case
5. Failed to Rs. 1,425 of deficiency in knowledge and
detect crore methodologies. These were
receipts more of ethical issues on the
part of the functional
management of the company
The SEBI on charges of the they generated from this and Engagement partners of
points stated in the table above engagement and a penal the audit firms. It is natural that
has barred PwC from audits for interest. functional management would
two years across India. It has try to take the advantage of
also asked two partners and the The PwC is naturally their tricky/engineered
firm to disgorge about Rs. 13 disappointed and may prefer a accounting practices. So, it may
crore that includes the revenue stay order from the higher not be of any value if we point

A Ringing Bell
our finger towards the 4. Create an environment 9. Engagement partner/

unscrupulous management, it where adequate scope is manager should remain a
may be worth repositioning our prevalent to offer regular bit more careful building
mindsets while staying the audit training on fast changing relationship with the client
profession. We may consider a information technology that management. Close
few things, which are not very are extremely useful in friendship/relationship with
difficult practicing, would in turn accomplishing a credible functional management has
save us from severe disaster! audit; noteworthy influence on the
independent behavior of an
Recommendations 5. To ensure regular auditor;
monitoring on the quality of
As an active professional in the the work, there should be 10. Dissemination of concurrent
current market, I may offer few one independent quality success and failure stories
points which I feel very assurance team functional to the staff members should
pertinent with respect to setting at all times; be a regular practice with a
precaution on the part of view to helping them
sensitive audit professionals. 6. To ensure a culture that repositioning their
Request to the readers, not to proper documentation of mindsets;
consider my suggestions as work papers,
conclusive ones nor would correspondences and 11. Creating a culture that
consider me as an authoritative related evidential matters encourages respective
writer on the subject matter. becomes an embedded audit team members
Suggestions are: habit into the professional building innovative minds in
1. Recruitment and staff members; terms of skepticism/finding
deployment of the audit new ways to think while
professionals should be 7. There should be performing an audit
very objective and sensible demonstrated culture engagement;
keeping in mind that their prevalent in the firm with
performance would have respect to ethical practice 12. Introducing reward and
substantial impact on image across all activities in the punishment against
of the firm and the firm. To have ready appropriate successes and
profession at large; reference on ethical codes, failures respectively;
firms may consult with the
2. Regular training program handbook on IESBA Code 13. Last but not the least,
on topical matters for the of Ethics which ICAB has building a good governance
audit professionals and circulated to its members. structure where issues and
related staff members Examples may be picked up uncertainties can be
should be part and parcel of from our daily lives to help professionally escalated,
the regular activities in an staff members understand discussed and resolved.
audit firm; how to implement those in
their work life; Sources
3. Introducing a culture that
encourages staff members
8. Deliveries should be cross Some information in the write
to study the relevant
checked by the partners, up are picked up verbatim from
professional matters from
where firm is proprietorship, various sources including
published books and
a senior manager having internet-based reports while
booklets, journals,
adequate knowledge may some are crafted as the writer
legislative circulars/
be entrusted to deal with thought fit for the context.
directives, internets, etc;
the objective of this point;

ARTICLE
Cyber Security in Banks and Financial Institutions

A Highbrow Exegesis
M Jalal Hussain FCA
I
ntroduction accounts, frauds, cyber-crimes
and cyber-terrorism. Cyber
The industrial attacks are really big threats to
transmogrification in the economic and financial security,
present globalized world has better way of life and the whole
moved the modern civilization national security. The recent
to a wonderful digital compass cyber-crimes that are
where digital rhythms wake up happening every day in
people from sleep at the early high-income. middle-income
hours of the day. Peoples’ and low-income economies,
personal, professional and other make the stakeholders,
lives have gone digital; they policy-makers and state leaders
work, live, and move in the appallingly worried. The news
cyberspace. They use media, newspapers, TV, Radio-
computers, internets, online, all media are always covered up
mobile phones with eclectic with news of cyber-crimes,
The Author is a devices every day and night, hacking of bank accounts and
Chartered Accountant and morning and evening; to talk, creating innumerable problems
a Fellow Member of the email, text, chat and twitter with in the computer systems,
Institute of Chartered Accountants friends, office colleagues, computer networks. The
of Bangladesh-ICAB bosses and with family technology and systems for
members. People do businesses combating cyber-attacks have
online, on cell phones and other been precocious. The notorious
digital niceties; from banking to but talented cyber-criminals
shopping, from government have also upgraded their
services to private services, knowledge, techniques and
from manufacturing to devices. These criminals are
distribution. Cyber world and imperceptible; we don’t see
digital infrastructure make all them, we don’t hear them and
these happenings smoothly, we can’t latch them but they
moving at the fastest speed can fusillade the computer
than the non-digital world. systems, networks of any bank
Cyber technologies are widely or any FI to draw and illegally
and comprehensively used in transfer money beyond borders
banks and financial institutions globally.
(FIs) in high-income,
middle-income and low-income What’s Cyber Security?
economies.
Cyber security is the form of
The increasing reliance on cyber technologies and progression
technologies like, internet, which practices safety and
online payments from banks protection of network,
and Financial Institutions (FIs), computers, data and programs
computerized software, from illegal access, cyber
e-commerce, mobile banking, threats, attacks or damages. It
banking through ATM booths deals with monitoring physical
and many more, make the entrée to hardware alongside
people frangible to protecting smudge coming via
cyber-attacks, hacking of network access and code

A Highbrow Exegesis
injection. The sole purpose of cyber security is to committed and red the least. (Source:
defend, prevent, protect or alleviate infliction to ITU). The International
or destruction of the integrity of computing Telecommunications Union (ITU) is the
assets belonging to or connecting to an United Nations’ specialized agency for
organization’s network, applications, devices and information and communication
data. Components of cyber security include: technologies.
• Application security
Targets of Cyber Attackers
• Data security
• System security Cyber-attackers, cyber-thieves,
fraudsters and hacktivists always go
• Fiasco recuperation/business coherence where money flows, where financial
arranging transactions take place. Banks and
• Operational security financial institutions’ main business is to
deal with money-received from their
• End-client training stakeholders and deposit-holders. These
sectors of industries have become the
archetypal target of all the hacktivists. In
In the year 2017, cyber-attacks on the year 2017, cyber-attacks on banks
banks and FIs covered 31% of the and FIs covered 31% of the cyber-attacks
that took place globally and ranked as
cyber-attacks that took place number one vulnerable sector. The banks
globally and ranked as number one and FIs rank third in the number of data
breaches, behind the leader, public
vulnerable sector. The banks and organizations, and the information
FIs rank third in the number of data industry, according to Verizon’s Data
Breach Investigations Report. The banks
breaches, behind the leader, public and FIs have been adopting most
organizations, and the information sophisticated and latest
equipment and software to combat
designed
industry, according to Verizon’s cyber-attacks in every year. But the

Data Breach Investigations Report. cyber-fraudsters are found to be adroit
and smarter enough to come with more
advanced and sophisticated technologies
to interrupt, intercept, whittle and hack
To make the cyber security strategy successful, the banks’ and FIs’ networks for personal
banks and FIs must continually develop to keep gains.
stride with the fluctuating strategies and
technologies used by hackers. More importantly it The 2016-17 cyber-attacks to banks and
requires a multi-pronged effort that includes FIs were different and forward-thinking
security management for better monitoring and than that of year 2015-16. A Ponemon
visibility; cloud shields for all environments; Institute survey release found that 43% of
mobile security that follows wherever the US companies had experienced a
business leads; threat deterrence and security breach in the past year. Big
anti-ransomware technology; and security names were impacted, including eBay,
appliances that grow with business needs to American Express, JPMorgan Chase, and
current and future cyber security requirements. the Home Depot. And with the big names
came big headlines. The rhythm of
The Heat Map of National Cybersecurity fissures, headlines, and feedbacks was
Commitments with dark green being the most

ARTICLE
institutions were targeted by a

new malware attack aimed at
stealing passwords. This
followed the discovery in
January of attack aimed at the
Bank of Montreal (BMO), Royal
Bank of Canada (RBC) and
National Bank of Canada and a
number of other institutions
around the world that included
ensnaring customers to fake
bank Web sites.
Financial institutions have

always been in the sights of
hackers for palpable reasons.
inexorable and unabated. It’s heist is an age-old crime, the Recently the world’s greatest
hard to imagine that how many methods deployed were wholly ever heist took place in
organizations in this sector will from the 21st century. Bangladesh in which the
be able to reinforce, gird and Bangladesh, an emerging cyber-criminals figured out how
inspissate their defense tools economy, recently faced to cheat $101 million from the
and technologies over the cyber-attacks on ATM and record of Central Bank of
upcoming years and future many consumers lost huge Bangladesh (Bangladesh Bank)
years to minimize and curtail amount of money from many with the Federal Reserve Bank
the cyber-attacks. Banks and ATM booths because of of New York. The hacktivists/
FIs need to implement new enfeebled and etiolated digital-offenders supposedly
security measures, tactics and protection systems. broke the PC frameworks of
technologies keeping in mind Bangladesh Bank, stole its
that fraudsters and hacktivists With the revolution in computer installments exchange secret
would surely respond by technologies, the evolution of word and accreditations.
changing their operational methods to deliver banking
techniques and methods. services to various customers at How to Protect Banks
national and international levels and FIs from Cyber
Cyber-criminals are constantly has been changed. The banking Attacks?
developing new methods and industry has gone from wide
technologies to attack spread use of Automated Teller Aegis is better than healing is
traditional channels used by Machine (ATM) in the 1980s, to the oldest and universally
banks and FIs like ATM, Mobile modern points of sale (PoS) accepted adage, all-time-fit to
Banking. In a highly coordinated terminals in 1990s, to internet shield banks and FIs from the
attack involving people across and on-line banking in 2000s looming cyber-attacks. The five
some 50 countries, and mobile banking in 2015. the core cybersecurity functions of
cybercriminals worked with new and evolving ways of the National Institute of
local groups to finagle and meeting consumers’ demand, Standards and Technology
knead the financial systems and however, come with new (NIST)’s Cybersecurity
magnetic strips on debit and cyber-fraud patterns and Framework are well known
credit cards to shear millions of evolving risks of cyber-attacks preventive measures that the
dollars from thousands of ATMs from 360 degree angles. banking industry and FIs may
around the world during two implement. These five functions
separate attacks. While an ATM In 2015-16, 15 Canadian financial provide organization and

A Highbrow Exegesis
that today's approach for cyber

security must be based on
detection of attacks and
preventing the criminals from
leaving with key assets. They
need to be well-equipped with
knowledge and professional
training to deal with the
imminent cyber-threats.
National Australia Bank chief
executive Andrew Thorburn
says “cyber-crime, hacking into
systems and misuse of data is a
huge and growing risk that we
need to a do lot more to
understand”.
Evidence based analysis in

banks and FIs helps prioritize
security investment plans. The
Privacy Rights Clearinghouse
maintains a public database of
structure to help the bank attacks, Corporate Account breaches across industries. The
navigate its way to better Take Over (CATO) attacks, total number of records
protection against cyber Automated Teller Machine breached is 907,453,926 since
threats. The five core functions (ATM cash-out) attacks and they started record keeping in
of cybersecurity include: Crypto Locker attacks. 2005. The financial industry’s
identify internal and external Leadership teams at financial result for two-time periods,
cyber risk; protect organization services organizations 2010 and 2016-2017 are shown
systems, assets and data; detect (banks/FIs) need to understand in the chart:
systems in intrusions, data
breaches and unauthorized
access; response to potential
cybersecurity events and
recover from cyber security
events by restoring normal
operations and services.
The National Institute of

Standards and Technology
(NIST), an agency of the U.S.
Department of Commerce
recommended that the
MD/CEO of banks and FIs need
to know and understand clearly
the four basics about
cyber-attacks on banking
industries are: Distributed
Denials of Services (DDoS)
Source: CARSONinc Consulting

ARTICLE
It’s pretty clear that hacking by banking industry. In order to In his research report titled
attacks have been increasing understand their adversaries, “Review of IT Operations of
and that banks and FIs’ banks must anticipate new, Banks in Bangladesh 2016,”
defenses in this area need to sophisticated forms of attack, or Shihab Uddin Khan, associate
improve by introducing latest new versions of old tricks. At professor at BIBM, said: “Some
technologies to counter the same time, they must also 16% banks mentioned that the
cyber-attacks, a strong and work to ensure that their current situation of cyber
comprehensive security partners and stakeholders are security is not enough to
program and providing secure, as part of strengthening prevent any virtual or physical
adequate training to the the entire supply chain of damage to information
concerned staff. information to minimize attacks management system,
against the weakest links. They perceiving the highest risk.” He
Mobile banking is the latest must do all this while said: “around 36% of the
technology that is also simultaneously rolling out surveyed banks believe that
vulnerable to cyber-attacks. The services across emerging they are at high risk of
IT experts suggest that mobile channels, such as mobile. It is a information loss at any moment.
banking through internet should challenging task, but it’s a vital 32% banks reported that they
employ secure transmission task to maintain customer trust. are under moderate risks,
protocols, such as Hypertext whereas 12% and 4% banks are
Transfer Protocol Secure Cyber Security of Banks low and very low risks
(HTTPS) that is more difficult to and FIs in Bangladesh respectively.”
hack; customer data exchanged
with third-party vendors should A total of 52% banks in In many countries in South-East
be encrypted; PINs required in Bangladesh are at high risk of Asia and Africa, corruption is
the mobile application should cyber security, said Bangladesh pandemic and the donors and
not be less than 6 characters; Institute of Bank Management the economists term the
there should be dual (BIBM) in its study. Of the position as catastrophic and
authentication for log-in banks, 16% are at a very high risk vacillating. Corruption is a
credentials; applications should and 36% at high risk. Cyber serious threat that stunts
time out after at most 15 security has become the economic development, make
minutes of inactivity; jail-break country’s most-talked-about the cyber security system
device should not be allowed on issue in the recent time, ineffective, demoralizes the
the network and heightened especially after Bangladesh political system, the public and
diligence should be taken to Bank lost $81 million from its private officials, and the general
ensure the security and reserves to international
compliance of vendors. Small hackers. Over the week end of
and mid-size banks and credit 5th February 2016, a group of
unions, in particular, are behind hackers attempted to steal $ 951
on installing defenses and aegis, million from Bangladesh Bank
implementing best security (Central Bank of Bangladesh) in
practice policies. So as they Dhaka. Much of this was
push more aggressively into protected but the hackers
mobile banking services, they managed to get away with $ 81
are becoming more vulnerable million. Strong cyber security
to data abysses. system, better internal control,
vigilance, fore-sightedness of
The 21st-century ATM heist the concerned IT personnel
illustrates the growing could have failed the cyber
complexity of the threats faced heist.

A Highbrow Exegesis
emerging countries face the

malaise of corruption,
lawlessness and lack of justice.
The inside-criminals remain
untouched and unpunished due
to the blessings of the
high-class and most powerful
tycoons of the society. The
developed economies are
better off in this respect as they
have strong law, justice and
accountability of the
people of any organization. violations that arise. It’s worth government, top-management
Reduction of corruption, investing a million dollar to save of banks and all officials.
increasing transparency and a billion-dollar cyber-theft.
enforcement of accountability Only organizations free of
are increasingly necessary to Financial colossuses around the corruption can best weather
make the cyber security system world are spending millions of this moment of transformation,
workable in banks and FIs in dollars into a cyber security guarding against internal and
Bangladesh. startup that aims to hogtie, external hacker threats, while
cripple and hamstring phishing also empowering
Investing more Money to attacks, in which hackers try to whistle-blowers to protect
Encounter Cyber Attacks bamboozle people into either against internal misdeeds.
revealing their login credentials, Cyber networks can, like
All these cyber-attacks on downloading viruses, or visiting gunpowder, prove an explosive
banking industries and FIs sites laden with malicious material – a powerful tool in the
reiterates the extreme need for software. Big banks such as right hands, but prone to
investing more money in HSBC, JPMorgan Chase and detonate spectacularly in the
modern devices, strategies and American Express, are among wrong hands. If banking
system to combat, encounter the investors in a new $40 industry and FIs’ leaders are not
the known, unknown and million round of funding for upbeat in dealing with insider
up-coming cyber-threats. Smart Menlo Security. Other renowned ethical issues, corruption might
and farsighted IT managers of investors include General just provide the fateful spark
banks and FIs, need to inveigle Catalyst, Ericsson Ventures, that might destroy the
management, the stakeholders Osage University Partners, foundation of banking industry
that investments in cyber Engineering Capital and Sutter and FIs especially in the
security will renitence many, if Hill Ventures. middle-income and low-income
not all, of those countries. It’s agreed by all
concerns—reducing risk, Conclusion concerned that
protecting against fissures, corruption-whether incidental,
providing swift response Cyber-crimes are committed by systematic or systemic, whether
capabilities, reducing costs and the inside criminals as well as by endemic or planned, anomic or
demonstrating compliance. outside fraudsters. Outside extrovert, has often been found
Organizations need tools and cyber-attacks can be detected, in the corruption-riddled
resources that reduce the time controlled, contained but it’s countries profoundly damaging
and effort to achieve these difficult to safeguard the banks all preventive and protective
goals, while providing ongoing and FIs from the cyber-attacks cyber security systems in banks
monitoring and remediation for from the inside criminals. The and FIs.
new risks and compliance third world and some so called

ARTICLE
Arbitrary and Unlawful Attachment of Bank Accounts of

Assessees Not in Default by Tax Authorities
K. M. Hasan FCA
O
ur tax laws give tax may, by notice in writing,
authorities the power to require any person from whom
attach a bank account of [any money or goods] is due or
an assessee as an ultimate may become due to the
measure for recovery of assessee, or who holds, or
undisputed arrear tax. But this controls the receipt or disposal
power of the tax authorities is of, or may subsequently hold, or
certainly not unfettered. Any control the receipt or disposal
power given to a public of, [any money or goods]
authority must be exercised belonging to, or on account of,
judiciously and for the ultimate the assessee, to pay to the
purpose of public benefit. But in Deputy Commissioner of Taxes
case of bank attachment by tax the sum specified in the notice
authorities, it is found that this on or before the date specified
power is often exercised in an therein for such payment.
unjust and arbitrary manner
The Author is a causing great harassment and Law in this regard is clear and
Chartered Accountant and hardship to the taxpayer. Such above referred sections of law
a Fellow Member of the injudicious application of bank are not questionable. Rather,
Institute of Chartered Accountants attachment by tax authorities injudicious application of those
of Bangladesh-ICAB only increases mistrust and sections are questionable.
misgivings between taxpayers Actions of the Taxes Authorities
and tax authorities. This is not are full of faults. Legal position,
desirable at all, and it goes injudicious application, some of
directly against the concept of the instances and court cases
public benefit. In the present are discussed in the succeeding
article an attempt has been paragraphs.
made to throw some light an
various aspects of this issue. Before Attachment of
Bank Accounts Under
Section 143(2) of the Income Section 143
Tax Ordinance provides for
attachment of an assessee’s 1. Issuance of Demand Notice
bank account as a last resort for under section 135 is not
recovery of arrear tax, if the ensured.
assessee is in default regarding
payment of tax. 2. Whether the demanded
amount are correct or not,
Before we proceed, to discuss that is not ensured
the issue in details, relevant (According to the language
provisions under section 143 of of notice under section 143
the Income Tax Ordinance, can be issued only to the
1984 are required to be defaulters, but in practice it
revisited. is not followed.)
Section 143(2) (a) provides that 3. Appeal of the Assessee for

for purpose of recovery of any deferment of tax realization
tax payable by an assesee, the is not considered from
Deputy Commissioner of Taxes judicial point of view.

4. Instead of issuing the copy of bank belief of confidence. If there is any dearth
attachment notice to the Assessee, sending of of confidence, the depositors will search
Tax Inspector to the bank to create pressure for alternative place, which is not good
on the Bank Manager for realization of the for a flourishing economy. Here are the
demanded tax is contrary to the basic questions:
principle of Aritcle-42 (Rights to Property) of
the Constitution. 1. Of course the subject of bank
attachment is justified. But does the
5. Attempts are made to encash the Fixed tax authority seek any consent from
deposit of the Assessee maintained with the the Assessee before remitting the
bank through notice under section 143, deposited money of the Assessee to
instrument of which are held by the Assessee. the Govt. account? If that is not done,
crisis in confidence of the Assessee is
apparent.
Law in this regard is clear and above 2. Basic ingredient of all laws is `Natural
referred sections of law are not Justice’, legal explanation of which is
questionable. Rather, injudicious ‘Natural Justice demands that the
person is fully aware of the nature of
application of those sections are the allegation against him or her so as
questionable. Actions of the Taxes to have a proper opportunity to
present his or her case.’
Authorities are full of faults. Legal
position, injudicious application, This subject is not taken into
consideration in this case. Bank
some of the instances and court Authorities can inform their client
cases are discussed in the about this notice issued under
section 143 giving them 7 days time
succeeding paragraphs. and can try to solve the issue through
discussion with the Taxes
Department. Otherwise, the client
6. There is a tendency to issue attachment may be informed that necessary
notice well before the expiry of the time limit
for submission of Appeal in the case of a
disputed demand.
7. Good intention of the Assessee to pay the tax

is not generally taken into consideration.
A guideline in this respect can be available from

analysis of the Judgment of the Higher Court of
India as being quoted below:
Questions Regarding the Actions of

Bank Authorities
A Bank is the custodian of the money deposited

by its clients and they keep their money on a

ARTICLE
“Where the income

determined on assessment
was substantially higher
than the returned income,
say twice the latter amount
or more, the collection of
the tax in dispute should be
held in abeyance.”
4. KEC International Limited

Vs. B. R. Balakrishnan &
ORS. (2001) 251 ITR 158
(Bom) (High Court)
Parameters
While considering the stay

application, the authority
concerned will at least
briefly set out the case of
action will be taken by the 1. There is no unfettered the Assessee.
Bank in accordance with the discretion in public laws, a
notice. public authority possesses 4.1 In cases where the assessed
powers only to use them for income under the impugned
3. Bank Authorities usually public good. order far exceeds returned
hurriedly transfer the income, the authority will
money of their client to the 2. CBDT (India) Circular No. consider whether the
Govt. Account being afraid 530 dated 16 March 1989 assessee has made out a
of the consequence of the case for unconditional stay.
provision of section 143(5). “The Assessing Officer,
The reason is that they are while considering the 4.2 In cases where the assessee
not actually aware of the situation for treating the relies upon financial
correct implementation of Assessee to be not in difficulties, the authority
section 143 in processing default, would consider all concerned can briefly
the realization of demanded relevant factors having a indicate whether the
tax. If required, they should bearing on the demand assessee is financially sound
fight on legal points to raised and communicate his and viable to deposit the
protect the interest of their decision to the Assessee in amount if the authority
depositor. the form of a speaking wants the assessee to so
order”. deposit.
Some Judgments of the
Higher Courts are 3. Valvoline Cummins Ltd. Vs. 4.3 The authority concerned
Produced Below DCIT (2008 171 Taxman 241 will also examine whether
(Delhi), held that in case of a the time to prefer an appeal
Hon’ble Supreme Court of India high pitched assessment has expired. Generally,
in Food Corporation of India Vs. the recovery needs to be coercive measures may not
M/S Kamdhenu Cattle Feed absolutely stayed in view of be adopted during the
Industries JT 1992(6) SC 259 CBDT instruction No. 96 dt. period provided by the
has held that : 21.8.1969. statute to go in appeal.

However, if the authority be made pending previous years without there

concerned comes to the being a material change in
conclusion that the 5.1 Expiry of the time limit for facts or law, that is a
assessee is likely to defeat filing an appeal; relevant consideration in
the demand, it may take deciding the application for
recourse to coercive action 5.2 Disposal of a stay stay.
for which brief reasons may application, if any, moved
be indicated in the order. by the assessee and for a 5.5 When a bank account has
reasonable period been attached, before
We clarify that if the thereafter to enable the withdrawing the amount
authority concerned assessee to move a higher reasonable prior notice
complies with the above forum, if so advised. should be furnished to the
parameters while passing Coercive steps may, assessee to enable the
orders on the stay however, be adopted where assessee to make a
application, then the the authority has reason to representation or seek
authorities on the believe that the assessee recourse to a remedy in law.
administrative side of the may defeat the demand, in
department like respondent which case brief reasons 5.6 In exercising the powers of
No.2 herein need not once maybe indicated. stay, the AO should not act
again give reasoned order. as a mere tax gatherer but
5.3 The stay application, if any, as a quasi-judicial authority
The above parameters are moved by the assessee vested with the public duty
not exhaustive. They are should be disposed of after of protecting the interest of
only recommendatory in hearing the assessee and the Revenue while at the
nature. keeping in mind the same time balancing the
guidelines in KEC need to mitigate hardship
5. Principles/guidelines International Ltd. vs. B.R. to the assessee. Though the
prescribed by Bombay Balakrishnan (2001) 251 ITR AO has made an
High Court in case of UTI 158 (Bom). assessment, he must
Mutual Fund 19 objectively decide the
Taxman.com 250 5.4 If the AO has taken a view application for stay
contrary to what has been considering that an appeal
No recovery of tax should held in the preceding lies against his order; the
matter must be considered
from all its facets, balancing
the interests of the assessee
alongwith the protection of
the interest of Revenue.
• Any deviation from the

aforesaid guidelines should
be specifically brought to
the notice of the higher
authorities, Tribunal and the
High Courts.
7. In Mahindra and Mahindra

Ltd. v. Assessing Officer
(2007) 295 ITR 43 (Bom)

ARTICLE
within the guidelines framed

in the CBDT’s instruction
No. 1914 issued by the
CBDT.The CITalso rejected
stay application,Assessee
filed Writ Petition where
court observed that the
proviso to s. 220(1) which
empowers the AO to
demand payment within a
period lesser than 30 days
with the prior approval of
the JCIT cannot be
exercised casually and
(High Court), the court held worsens. Above all, Assessees without due application of
that, no coercive action lose their confidence in the mind. The AO & JCIT must
should be taken till the taxes department. This has to apply their mind on how it
expiry of the appeal period be absolutely avoided for the would be detrimental to the
against the said order is sake of smooth and blossoming interests of the Revenue to
over. Therefore the economy. Nevertheless, taxes allow the full period of 30
Assessing Officer is duty department is the lawful days and record reasons.
bound to wait for the expiry authority to impose the legal The reasons & approval
of time period of appeal sections in realizing their must be made available to
before proceeding to rightful dues, but at the same the assessee if he seeks
recover the tax due. time, they have the them. Merely because the
Contempt of court constitutional responsibilities to end of the financial year is
proceedings initiated ensure that in discharging their approaching that cannot
against AO and Jt. CIT. aforesaid duties, the right of the constitute a detriment to
Assessee are not hampered or the Revenue. The detriment
Further, let us more elaborately mutilated. to the Revenue must be
discuss about this issue. akin to a situation where the
8. Firoz Tin Factory v. ACIT demand of the Revenue is
Sections 135 to 143 are aimed at (2012) 71 DTR 185/209 liable to be defeated by an
realisation of the correct dues of Taxman 458 (Bom. High abuse of process by the
the Govt. And section 143 is the Court) assessee. There is
last section. But the Taxes
absolutely no justification
Department at random use it in The assessing Officer has
for the AO to demand
the cases of realizing taxes, passed an order under
payment in 7 days and his
guideline or parameter of which section 143(3) on 9/3/2012
action is high handed and
has not been fixed by the NBR. raising huge demand and
contrary to law.
As a result, Assessees are directed the assessee to
unnecessarily harassed. Their pay the entire demand
9. In Sultan Leather Finishers
trade and business sustains within 7 days even though
Pvt. Ltd. v. CIT (1991) 191 ITR
losses. Particularly, the the period specified in
179 (All) (High Court), the
respected aged Assessees lose 220(1) is 30 days. The
court held that when
their mental balance. Bank assessee filed a stay
rectification application is
officials unnecessarily face a p p l i c a t i o n
pending the Assessing
mental pressure in discharging u/s220(3)on12/3/2012
Officer cannot proceed with
their official responsibilities and which was rejected on the
recovery proceedings.
their relation with the clients ground that it did not fall

10. Maheswari Agro Industries targets for the collection of

v. UOI (2012) 346 ITR 375 revenue should not be at
(Raj.) (High Court) the cost of fore closing
remedies available to
Income assessed by the assessees for challenging
Assessing Officer was 47 correctness of demand.
times of income declared by Applications for stay
assessee. Therefore require judicial
instruction No.95 dated 21st consideration. Rejecting
August, 1969 holds the field. such applications without Bangladeshi
Therefore assessee cannot hearing the assessee and
be treated as assessee in submissions made and nationals
default. without indicating reasons working abroad
for rejection of stay are
11. The Madras High Court in impermissible. The court
sent US$1.15
R.P. David v. Ag. ITO (1972) also laid down model billion in
86 ITR 699 (Mad) held that, guidelines for recovery. February 18
the fact that the assessee is
financially sound and in a 13. P r i n c i p l e s / g u i d e l i n e s
which is 17 per
position to pay is not in prescribed by Bombay cent lower than
itself a ground for refusing High Court in case of UTI January 18.
to exercise the discretion in Mutual Fund 19
granting the stay. Taxman.com 250 However, it was
US$940.75
12. UTI Mutual Fund 19 We do expect that in the light of million in
Taxman.com 250 (Bombay) all above discussions and
opinion, the NBR will very soon February 2017.
Facts compose one clear Guideline for
implementation in respect of
AO issued a garnishee order realizing undisputed due taxes
to the banker of assessee by way of bank attachment, so
even before communication that non-defaulter Assessees SOURCE
The Financial Express
of the order passed on its are not in harassment. 2 March 2018
nd
stay application. Assessee

also challenged Lastly, we must appreciate that
communication of CBDT our NBR is now quite business
Chairman dated 7-12-2012 friendly. Dishonest businessmen
officers of department avoid tax in so many ways by
linking their promotion to false declaration. Let there be
the revenue collection. strong action against them as
well. Now NBR is ‘Punish the
Decision culprits and Nourish the honest’.
Let the officers and staff of NBR
Administrative directions be recognized and up lifted for
for fulfilling recovery their good performance.

ARTICLE
Human Resources (HR) Disclosure Practices

Evidence from Commercial Banks of Bangladesh
Imtiaz Alam FCA | 2Fahmida Akhter | 3Mohammad Rokibul Hossain

1
A
bstract stakeholders, Corporations
The Authors are: should focus more on HR
The purpose of this paper Disclosures.
is to examine the extent of
Human Resources (HR) Keywords
disclosure in the annual reports
of commercial banks in Human Resources, Disclosures,
Bangladesh. Content Analysis is Commercial banks of
used in analyzing the study. Bangladesh, Employees,
Annual reports of 30 Stakeholders.
commercial banks are examined
to explore the trends and nature Paper Type: Research paper.
of HR disclosure using Space
Incidence Method for a period Introduction
of 3 years. Subsequently, a set
Chartered Accountant and
1
of HR theme is investigated A firm’s value depends to a
a Fellow Member of the
using disclosure index and find large extent on its human
Institute of Chartered Accountants
of Bangladesh-ICAB out five most disclosed and five resource. Strong management,
least disclosed HR item. The motivation of employees and a
analysis reveals that there is an sound organizational and social
increasing trend of HR infrastructure can enable a firm
disclosure practices by to gain cherished success
commercial banks in (Abhayawansa and Abeysekera,
Bangladesh. It may be the result 2008). Without proper internal
of the increased intervention of control system and a sound
regulatory bodies on such organization structure, a skilled
issues. In-house training employee may not be able to
programs for employees is the contribute as he/she supposed
most disclosed HR item to be. Kansal and Joshi (2015)
followed by a statement on opined that “Human capital
number of employees, includes knowledge, skills and
2
Lecturer
School of Business Administration compliance with health and technical ability, and personal
East Delta University, Chittagong safety standards and disclosure qualities such as aptitude,
on recreational and cultural attitude, energy, intelligence,
facilities for employees but bank commitment, the ability to learn,
have ignored significant HR aptitude, creativity, imagination,
issues like staff accommodation, collaboration, team
ex-servicemen benefits and participation and a focus on
providing financial assistance achieving the objectives of the
for employee education. Among employer company”. It is
the sample banks, only three termed as value creators for
banks disclose employee companies (Huang et al, 2013).
turnover information and per Therefore, employers intend to
employee statistics. The invest a huge amount on their
disclosure pattern suggests that employees in order to get a
banks are now concerned about competitive advantage. (Kansal
3
Lecturer
Department of Marketing HR practices as the percentage and Joshi, 2015; Huang et al,
Faculty of Business Studies is increasing day by day. To 2013; Khan and Khan, 2010);
Premier University, Chittagong boost its image towards Research on human resources

disclosure has received considerable attention also attempts to examine HC theme

during past decade and a half (Abeysekera and formulated by Kansal and Singh (2012)
Guthrie, 2004; Stewart, 1994) Human capital using HC index and find out the most
disclosures serve its stakeholders in a number of disclosed and least disclosed HC items.
ways such as ensure organizational goal by
exploring opportunities and reducing threats Therefore, the study is mainly oriented to
(Collins, 1988); improves communication channels answer the following Research Questions
with employees on crucial issues (Craig and (RQ): RQ1: what is the trend and nature
Hussey, 1980) and meet the informational needs (narrative, quantitative and monetary) of
of all its present and potential stakeholders HR disclosures made by Commercial
(Worland and Anderson, 1991) Thus ensure a banks in Bangladesh from 2014-2016?
greater level of transparency across the RQ2: what are the contents of HR
disclosures made by commercial banks
for 2015-2016? RQ3: what are the most
To conduct the study 2013 -2014; disclosed and least disclosed HC
disclosures?
2014-2015 and 2015-2016;
Theoretical Framework
3 years are taken as a sample to
analyze the trends of HR disclosures Choi and Mueller (1992) argued that
and to evaluate the contents of Corporation discloses HR information
because employees, creditors,
HR disclosures made by sample customers, investors, government, and
banks and to identify most disclosed society might demand such information.
Several theories such as Agency theory,
and least disclosed HR items stakeholder, legitimacy, and resource
year 2015- 2016 is taken into dependence theory discuss on why
corporation should voluntarily disclose
consideration. HR information (Kansal and Joshi, 2015).
A large number of researchers argued
that mechanisms of HR disclosures can
organizations. Transparency, relevance, and
reliability of accounting information are some of
the basic needs of stakeholders. They want to
invest in companies who possess sound financial
and non-financial disclosures (Kansal and Joshi,
2015) and tend to avoid companies who don’t
have such disclosure policies (Azim et al, 2009).
Human Capital disclosures are one of such
disclosures that play a vital role to improve
corporate image and obtain a competitive
advantage.
Considering the needs and importance of Human

Capital Disclosures, this study aims at
investigating the nature and trends of Human
Capital Disclosures made by commercial banks in
Bangladesh for the year 2014 – 2016. The study

ARTICLE
enable corporation to attract

and retain employees
(Mouritsen et al., 2004), meet
shareholders expectation by
revealing HR capabilities
(Meer-Kooistra and Zijlstra,
2001), creates value (Wright
and Snell, 2005) and maximizes
shareholder value (Murthy and
Abeysekera, 2007). Guthrie
(2001) showed that HC
disclosures ensure effective
allocation of resources and may
create a bridge between skills
and abilities. Petty and Guthrie
(2000) concluded that “HC
reporting guides some firms to
mimic the “best practice” of
other firms”. Some researchers
argue that practices of HR
disclosures offer better forecast
better be explained by the social image and social of earnings as its value have
stakeholder theory. The theory endeavor of corporation some influence over
illustrates that an organization (Greening and Turban, 2000; professional accountants
will operate activities as per the Backhaus et al., 2002) and (Flamholtz, 1976; Schwan, 1976).
expectations of its relevant investors intend to have
stakeholders such as investors, information so that they can Although a large number of
employees, customers, distinguish between good and research had been conducted
government, society, and report poor firms (Samudhram et al., on developed and developing
on these activities consequently 2010). countries (Khan and Khan, 2010;
to the stakeholders. This theory Huang et al., 2009; Ax and
also suggests that organization Literature Review Marton, 2008; Abeysekera and
should be managed for the Guthrie, 2004) there is a dearth
betterment of its stakeholders. In a corporation, one of the of research study conducted on
Stakeholder and legitimacy most crucial strategic resources HR disclosure practices in the
theory explains that is human resource (Bart, 2001; context of Bangladesh. Bala and
corporations should voluntarily Ballou et al., 2003; Fulmer et al., Habib (1988) showed that
disclose HR information with a 2003; Murthy and Abeysekera, organizations reveal only
view to meet the expectation of 2007). It is regarded as a key mandatory employee related
present and potential source of competitive disclosures such employee
stakeholders (Huang et al., 2013; advantage and sometimes salaries, gratuity fund, festival
Brown et al., 2005). For termed as a value creator. bonuses and similar information
instance, present employees (Huang, 2013). Firms as required by Bangladesh
want to know how a performance are closely linked Accounting Standard (BSA). In
corporation will protect them to organizational capabilities near future, financial reporting
from risk and any sort of (Harrison, 1992; Low, 2000; practices will be greatly
uncertainty (Subbarao and Seetharaman et al., 2002; controlled by Securities &
Zeghal, 1997). Potential Skoog, 2003). A soundly Exchange Commission (BSEC)
employees eager to know about developed HR disclosure will in Bangladesh and it will compel

all the public listed companies disclosed HR issues are Bangladesh. The Annual report
to disclose necessary employee training, number of is taken to extract the data
information towards the employees, career development because Annual report is the
shareholders. Mazumder and opportunities that firms most accepted and reliable
(2005) found that Bangladeshi provide, and employee means of communication to all
firms started disclosing recruitment policies. They its stakeholders. (Adams, 2004;
voluntary information such as ended up with a conclusion that Gray et al., 1995a, b; Guthrie &
social and environmental increased intervention of Parker, 1990; Raman, 2006;
information. Absar et al. (2014) regulatory bodies causes the Singh &Ahuja, 1983)
stated that Bangladesh upward trend of HR disclosure
Securities and Exchange practices. Absar et al., (2014) Selection of Period
Commission had taken some concluded, “Bangladeshi banks
initiatives in order to ensure are practicing modern HC To conduct the study 2013
transparency and sound practices such as Talent -2014; 2014-2015 and 2015-2016;
corporate governance. Management, employer 3 years are taken as a sample to
Moreover, Bangladesh Bank branding, and human resource analyze the trends of HR
instructed all the scheduled information system”. Therefore, disclosures and to evaluate the
banks in 2007 to include CSR to boost public image, contents of HR disclosures
disclosures including HR. HR corporations should embrace made by sample banks and to
disclosure has a significant sound HR Disclosures practices. identify most disclosed and
positive impact on business least disclosed HR items year
performance (Absar et al., 2012; Research Methodology 2015- 2016 is taken into
Singh, 2004). consideration.
Sample Selection
Sobhani et al. (2009) found that Data Analysis
out of 100 sample firms all of The study is conducted on the
them disclose at least one HR commercial banks in To achieve the objectives of the
issue. Khan and Khan (2010) Bangladesh. The study took 30 study, content analysis is
showed that HC disclosure commercial banks enlisted in performed on the Annual report
practices in Bangladesh is not Dhaka Stock Exchange (DSE) as as it was popularly used in
low as it is projected. They also the sample that represents total earlier disclosure based studies.
revealed that most frequently commercial banks in (Murthy, 2008; Murthy and
Abeysekera, 2008; Joshi et al.,
2010; Singh and Kansal, 2012).
According to Guthrie et al.
(2003) content analysis is a
standardized measurement
technique applied to metrically
defined units. Content analysis
of annual reports is a worldwide
accepted method for CSR and
IC research (Gray et al., 1995;
Guthrie and Parker, 1990).
Previous HR research mainly
used two methods of
measurement: the space
incidence method or the HR
disclosure index (Kansal and
Joshi, 2015). Space Incidence is

ARTICLE
2016 it becomes 55.5. This

analysis reveals that there is an
increasing trend of HR narrative
disclosure in Bangladesh.
Quantitative HR disclosure also
shows an increasing trend. In
2014, which is 22.97 and in
subsequent years it becomes
26.53 and 31 respectively. The
trend remains unchanged even
in the monetary category. In
2014, an average number of
disclosed sentences in the
monetary category is 9.83. It
shows a steep upward trend as
in 2015 and in 2016, the average
number is 11.77 and 13.57. So, In
this analysis, it is pertinent to
note that over the three years
examined, banking industry
a method where a single item in the HR Disclosure index demonstrated a significant
sentence is taken as a unit of for the year 2015-2016, where increase in the categories of HR
analysis. To meet the first Rp is a percentage of Disclosures. This finding is
objective, Space Incidence companies reporting specific consistent with Khan and Khan
method is used to obtain items of HR. (2010), where a content analysis
disclosed sentences related to is conducted on leading
HR. These sentences further Number of companies
manufacturing and
categorized into the narrative, disclosing ith item service-oriented companies in
quantitative and monetary Rp=
Total number of companies
X 100 Bangladesh and witnessed an
depending on the nature of the in the sample (n), ie:30 increasing trend in HR
disclosure. Then, the average disclosure in Year the
number of disclosed sentences 2009-2010. At the end of 2007,
for each category is calculated After having value of Rp, the Government of Bangladesh
for the sample years to evaluate third research objective can be took some initiatives to enhance
the trends of HR disclosure and met by showing five most social disclosures in annual
to ascertain whether there is an disclosed and five least reports. For instance,
upward or downward trend of disclosed HR items. Bangladesh Bank encourages
disclosing HR issues among the commercial banks to disclose
banks. For the second research Analysis & Findings social information as a part of
objective, the study examines a management efficiency. To
list of items under HR theme Longitudinal Analysis (2014– encourage social disclosure,
formulated by Kansal and Singh 2016) of HR Disclosures National Board of Revenue
(2012) and used in (Kansal and offers tax incentives and the
Joshi, 2015) using HR Index Table 1 depicts an average result is evident. Banks are now
method. number of disclosed sentences more concerned to disclose
related to HR for a period of 3 more and more on their human
The disclosure index will be years. In 2014, the average resource practices (Khan et al.,
measured in terms of how many number of narrative sentences 2009; Khan, 2010).
companies reported a particular is 37.66, in 2015 it is 45.3 and in

Table: I: Trend of HR Disclosure

Year Narrative Quantitative Monetary
2014 37.67 22.97 9.83
2015 45.30 26.53 11.77
2016 55.53 31.00 13.57
Item-wise (content) analysis of HR disclosures, 2015-2016

The item-wise disclosures of HR are calculated and summarized in table II and III
Table II : Contents of HR Disclosures for the Year 2015-2016
Rp Rp
Items in HR index (No) %
Employee health and safety
1. 1.Statements regarding the reduction of pollutants, irritants, hazards, injuries 7 23%
2. 2.Promoting employee safety and physical or mental health 22 73%
3. 3.Compliance with health and safety standards and regulations 23 77%
4. 4.Receiving a safety award 10 33%
5. 5.Establishing a safety department/committee/safety policy 8 27%
6. 6.Providing low-cost health care for employees 18 60%
Employment of minorities or women
7. 7.Disclosing percentage or number of minority and/or in the various managerial levels the 11 37%
workforce
8. 8.Employment of differently abled ex-servicemen 0 0
Employee training
9. 9.Training employees through the in-house program 27 90%
10. 10.Giving financial assistance to employees in educational institutes or continuing education 0 0
courses
11. 11.Establishment of training centers 3 10%
Employee assistance/benefits
12. 12.Staff accommodation 0 0
13. 13.Providing recreational, cultural activities/facilities 23 77%
14. 14.Improvements to the general working conditions – both in the factories and for the office staff 13 43%
15. 15.Awards are given for motivation of employees 13 43%
16. 16.Stock option plans for the employees or employee share purchase schemes 5 17%
17. 17.Retirement benefits 17 57%
18. 18.Subsidised canteen 18 60%
19. 19.Subsidised transport 4 13%
20. 20.Feedback from employees 5 17%
21. 21.Employee loan facilities 24 80%
22. 22.Employee welfare fund 8 27%
23. 23.Information about support for daycare, maternity and paternity leave 21 70%
24. 24.Holiday benefits 12 40%
Employee others
25. 25.Disclosing percentage or number of women employees in the workforce and/or in the various 15 50%
managerial levels
26. 26.Providing the number of employees in the company and/or at each branch/ subsidiary 24 80%
27. 27.Providing information on the company/management’s relationships with the employees in an 12 40%
effort to improve job satisfaction and employee motivation, e.g. Strikes/statements regard
cordial relations
28. 28.Providing per employee statistics, e.g. assets per employee and sales per employee 2 7%
29. 29.Information and statistics on employee turnover 3 10%
30. 30.Winning an award for being a good employer 19 63%

ARTICLE
The results depict that the

disclosure practices made by
Bangladeshi commercial banks
in relation to HR items are
satisfactory. Taking into
accounts all items, In-house
training programs is the most
disclosed HR information (90%
of companies disclosed this
information. Therefore, it
becomes evident that
commercial banks of
Bangladesh a significant
amount of human resources
trained through the in-house
program to be familiar with
work-related skills. This finding
is consistent with Khan and
Khan (2010). Kansal and Joshi
(2015) also found that In-house
training is the most favored way
of disclosing HR information. and cultural activities that they information and per employee
80% of companies disclose facilitate these kinds of statistics e.g. assets per
information regarding number engagement activities and also employee and sales per
of employees allocated to their they are compliant with health employee. Out of 30 sample
own companies, and/or its and safety standards. Although commercial banks only 4 banks
branches or subsidiaries and they did not extensively (13%) disclose information
also provide loan facility for disclose information on regarding subsidized transport
their employees. 77% of banks transport facilities for facilities for employees, 3 banks
stated regarding recreational employees, employee turnover (10%) disclose information
regarding employee turnover
and per employee statistics, e.g.
Table III: Most disclosed and least disclosed HR contents assets per employee and sales
Five most disclosed contents Rp% per employee, is disclosed only
Training employees through the in-house program 90% by 2 banks (7%). All of the 30
sample banks ignored the
Allocating the number of employees in the company 80%
significance of HR issues like
Employee loan facilities 80% financial assistance for
Compliance with health and safety standards and regulations 77% employee education and staff
Providing recreational, cultural and activities/facilities 77% accommodation. None of the 30
sample banks have made these
Five least disclosed contents Rp% disclosures. Commercial banks
Providing per employee statistics, e.g. assets per 7% of Bangladesh should practice
employee and sales per employee HR properly to strengthen
Staff accommodation 0% exposures, which will promote
Retirement benefits 0% their image and accountability
Giving financial assistance to employees in educational 0% towards stakeholders.
institutes or Continuing Education courses
Employment of abled difference 0%

Conclusion and per employee statistics, e.g. limit their intervention to the
Managerial Implication assets per employee and sales increased number of HR
per employee, and three banks disclosures. This study also
The study used quantitative disclose Information and identifies some crucial concepts
analysis to examine the trends statistics on employee turnover. where managers should focus
and nature of HR Disclosure None of the sample banks more on HR disclosures such as
practices of 30 commercial disclose information like staff employee statistics, retirement
banks in Bangladesh over a accommodation, retirement benefits, etc. Also, HR
period of three years benefits and giving financial disclosures may encourage
(2014-2016) and the study assistance for continuing employees to enhance
encompasses on a detailed education course. Kansal and productivity, where HR
analysis of HR disclosures for Joshi (2015) in context of India managers should play a pivotal
the year 2015-2016. The analysis found that In-house training role to disclose more on this
shows positive trends of HR program is the most disclosed crucial issue.
disclosure practices in HR content. In the research
Bangladesh. It is encouraging work, other highly disclosed HR Scope for Further
that the trend of HR disclosure issues are receiving safety Research
practices is increasing at a awards, statements regarding
decent rate. This finding is congenial atmosphere of firm, Although this study has given
consistent with Khan and Khan alongside Indian firms are highly some useful insight, it is not free
(2010) who revealed that trend reluctant to disclose significant from limitations. These
of HR disclosure practices is not HR issues like employee welfare limitations, however, could
low as it is forecasted. Kansal fund. The present study also provide a forward move for
and Joshi (2015) witnessed low supports the findings of Khan future research. First, this
HR disclosure practices in India and Khan (2010) who stated the analysis is based on annual
and compared to quantitative most disclosed HR information reports of thirty commercial
and monetary disclosures, there are In-house training for banks in Bangladesh over three
is an increasing trend of employees, employee numbers, consecutive years. The findings
narrative disclosures in India. career opportunities provided could be more accurately
Thus it is concluded comparing by the employer and generalized if a longitudinal
with neighboring Country India, recruitment policies. But the HR analysis of ten to fifteen years
Bangladesh Banking Industry Disclosures are not sufficient in could be taken as a
maintains a sound Human respect to per employee consideration. Such analysis
Resource Disclosures in Annual statistics, e.g. assets per across the different industry
Reports. The study also aims at employee and sales per may also be taken into
evaluating a list of HR items employee, employee skill and consideration. Multinational
formulated by Kansal and Joshi competence profiles, etc. Khan Banks such as HSBC
(2015) using HR Disclosure and Khan (2010) also added Bangladesh, Standard
Index method. The analysis that none of the sample banks Chartered Bank might practice
shows that employees in-house disclose information on sound HR disclosures, but these
training program is the most employee incentive programs, banks are not listed in DSE;
favored HR disclosure item, HC statistics, employee values, therefore, multinational banks
followed by allocating number etc. are excluded from the study.
of employees in a company, Further research may be
along with provision of loan to In light of the findings, the study conducted including the
employees and compliance with has a potential number of multinational banks for
health and safety standards and implications. To attract and generalizability of the findings.
regulations. Out of sample retain employees in the banking Transnational analysis can be a
banks, only two banks disclose industry, the government may new scope for research in this

ARTICLE
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Factors Determining Glass Ceiling
That Influences Women Career Development
A Study On Selected Private Commercial Banks in Dhaka City
1
Sheikh Emran Shirage | 2Md. Shawfiqul Islam | 3K.A.M. Rifat Hasan
A
bstract Introduction
The Authors are:
The participation of The economic condition of a
women in different job fields in country is measured by the
our country is inevitable for the living standard of the people of
economic development that country. In recent year, the
because half of the population Per Capita Income of the people
of our country is women and of our country has increased to
most of them are young and 1610 USD (BBS, 2016 - 2017).
educated. Moreover, in recent The participation of both male
years, private banking sector and female has helped us to
has become successful to grab achieve this success. Like other
the attention of the graduates. sectors, banking sector is also
Although a good number of vital for the development of a
1
Lecturer women are working in different country where a huge number
Department of Management Studies private banks, it has been seen of female employees are
Jagannath University that a few of them can reach engaged with active
their expected level of career. participation
And there are lots of factors
working behind this. This study The participation of women in
has been conducted aiming at different levels of the
measuring the impact of various organization is not up to the
factors of glass ceiling which expectation. As per the
impede women career editorial, the New Age (2015),
development. Anderson (1996) percentage of female staff in
formula has been used to the banking sector decreased
determine the sample size of significantly in 2014 compared
the respondents from five with that of 2013 as most of the
purposively selected private banks are reluctant to recruit
commercial banks in Dhaka City. them, said officials of
2
Lecturer A structured questionnaire Bangladesh Bank. According to
Department of Management Studies (Reliability test: Cronbach's latest Bangladesh Bank data,
Jagannath University Alpha .801) was sent to the the entry-level female staff
respondents and the study decreased to 13.70% of the total
found that long working hours, newly-recruited staff in 2014
concern for children, coworkers’ from 16.88% in 2013. The
appreciation in workplace, mid-level female staff in the
negativity in competitiveness of banking sector decreased to
women, years of experience, 14.18% in 2014 from 16.66% in
work-related competencies 2013 while the female
have impact on women career participation in the senior
development. The study ended management of the banks
with some recommendations, declined to 7.46% from 10.91%.
which will help the decision The number of female staff,
makers for further progress. aged between 30 years and 50
3
Lecturer years, decreased to 12.98% in
Department of Management Studies Keywords: Glass Ceiling (GC), 2014 from 15.64% in 2013 while
Jagannath University Women Career Development, the woman staff aged over 50
Private Commercial Banks years declined to 6.91% from

ARTICLE
9.61%. The female participation in the board of Civil Service). These perceptions were:
directors of the banks also decreased in the (a) negative attitudes toward women by
period as the ratio stood at 11.27% against 13.73% male colleagues, (b) hesitation of
in 2013. That’s why here comes to our mind the superiors about the capabilities of
concept of ‘Glass Ceiling’. women officers, (c) superiority
complexes of male colleagues, (d)
In general, glass ceiling (GC) refers to the invisible intention of men to treat women in a
barriers that restraint female employees from gender-biased fashion, (e) belief in
getting promoted into the upper positions in an traditional thought that men are more
organization though they are capable enough to efficient than women, and (f)
handle the position. Cotter et al. (2001) have non-cooperation of male colleagues.
identified four criteria creating GC scenario inside These perceptions induce working
an organization. According to their statement, a women to prefer their families to career
GC inequality stands for grender or racial advancement.
Career development is the lifelong

The economic condition of a country process of managing, learning, work,
is measured by the living standard of leisure, and transitions in order to move
toward a personally determined and
the people of that country. In recent evolving preferred future. As Mathis and
year, the Per Capita Income of the Jackson (2000) state
development helps organizations to
career
people of our country has increased magnetize and hold effective and
to 1610 USD (BBS, 2016-2017). efficient employees. Similarly,
facilitates the employees to attain their
this
The participation of both male and individual career goals and objectives. A
female has helped us to achieve combined effort of the organizations,
employees, their families and wider
this success. society is crucial for successful career
development. Due to the absence of any
of these efforts, both men and women
differences not described by other job-relevant
characteristics of the employees. They also
mentioned that the gender or racial difference is
greater at higher levels of an outcome than at
lower levels of an outcome. Here, GC inequality
symbolizes the disparity that tends to increase
over courses of career. Generally, women are
assumed to have larger responsibilities than men
do. Consequently, women are avoided by their
employers to promote for the higher positions
because women as a group are assumed to be
absent from work more often than men due to
childbearing and childcare responsibilities
(Rosenfeld et al., 1998).
A survey conducted by UNDP in 1993 identified

six perceptions of unequal treatment to women in
the administrative cadre of the BCS (Bangladesh

Factors Determining Glass Ceiling That Influences Women Career Development
3. Whether organizational
factors (such as
–opportunities for career
advancement, attitude of
management towards
having female superiors and
having competencies in
women, management’s
reluctance in assigning
females in challenging
tasks) are influencing the
career development of
women employees. and
4. Whether cultural factors

(such as–ethnicity and
religious issues)
representing GC are
influencing the career
development of women
employees.
Objectives of the Study

may confront many challenges Dhaka city confronting
as they advance through obstacles in case of advancing It is commonly believed that
careers. Reasons for difficulties their career due to GC. For the women employees get less
in career opportunities for attainment of the purpose chance for career advancement
women have been identified by following things are required to than men employees. The study
various researchers over time, be analyzed: is conducted to find out the
since the existence of GC in the following objectives:
organizations has obtained 1. Whether individual factors
considerable attention in recent (such as - years of 1. To find out the factors
years. experience, academic determining GC influencing
excellence, work related the career development of
Statement of the c o m p e t e n c i e s ) women working in private
Problem representing GC are commercial banks of Dhaka
influencing the career city;
Although various studies have development of women
been conducted on GC in employees working in 2. To measure the impact of
different sectors, but a very little private commercial banks in GC on career development
attention has been paid by Dhaka city. of female employees of
researchers on banking private commercial banks
industry, especially on women 2. Whether family factors of Dhaka city; and
employees working in different (such as – life partner’s
private commercial banks in support, concern about 3. To recommend solutions for
Dhaka city. The purpose of the children, family size) are overcoming the barriers
study is to realize whether the influencing the career standing in the way of
women employees working in development of women women career development.
private commercial banks in employees.

ARTICLE
Limitations of the Study American workforce. Before the the workplace are responsible
identification by Carol for the scarcity of female
In spite of sincere efforts, the Hymowitz and Timothy leaders. This situation explains
study has gone through the Schellhardt, the term ‘Glass that in spite of being capable of
following limitations: Ceiling’ was coined by two moving to upper levels at some
women at Hewlett Packard in points the female employees
1. The sample of employees 1979, Katherine Lawrence and are halted by invisible barriers
do not represent the total Marianne Schreiber. They used and this happens to them as a
work force; this term to illustrate a situation group, who are kept from
that described though there advancing higher, because they
2. The study is based on seemed to be a clear path of are women.
employees’ perception promotion, but practically
which may change over women seemed unable to The term ‘glass ceiling’ also
time; and progress beyond. implies that gender disparities
are more prevalent at the top of
3. There was limitation of time The metaphor ‘Glass Ceiling’ has hierarchies than at lower levels,
and money to conduct the been described as the barriers and that the disadvantages
study. restraining women from become more challenging as a
ascending to senior person’s career advances
Review of Literature management positions in large (Cotter et al., 1999). However, a
organizations, but here the study conducted by US
As Afza and Newaz (2008) barriers are assumed to be Department of Labor in 1991
state, Carol Hymowitz and transparent in nature as they are stated that substantial GC
Timothy Schellhardt identified not easily identifiable. Basically, barriers were encountered by
the term ‘Glass Ceiling (GC)’ for these barriers are confronted women and minorities in their
the first time in an article that and realized by women careers. They experienced these
was published on the March employees as they try to move barriers in their professions
24th edition of the Wall Street up the corporate ladder more than previously thought.
Journal in 1986. The article (Morrison et. al., 1987). They Researchers have found a lot of
reveals the imperceptible thought that the ongoing factors contributing to the GC
barriers impeding the career prejudice and discrimination barriers. According to
advancement of women in the against women employees in Bombuwela and Chamaru
(2013), factors contributing to
GC barriers include sexual,
ethnic, racial, religious
discrimination or harassment in
the workplace, existing culture
of the business organizations,
lack of family-friendly
workplace policies etc.
Cotter et al. (2001) concluded

like that, though evidence of GC
was found by them, racial
inequalities among men did not
follow the similar pattern.
Kanter (1997) mentioned that
men in managerial positions
generally prefer and tend to

not only about employment and

vocational choices but also
about personal management
and work skills (Greenhaus et al.,
2010). Women have reported
that, in comparison with men,
greater barriers have been
confronted by themselves in
getting career development
opportunities (Armstrong,
2003). These barriers, termed
as GC, may be faced by the
women due to individual, family,
social and organizational
factors while developing
through their careers (Afza and
Newaz, 2008). The impact of
GC may differ in different
appoint people with cultural Zafarullah (2000) and UNDP countries and in different
preferences similar to their own (1999) on GC is to identify the sectors. This research is aimed
or people similar in the respect factors creating GC effects in to analyze the impacts of GC on
to others already employed in different organizations and women career development in
the organization. This kind of service sectors in Bangladesh. A private banking sector of
homo sociality basically makes study conducted by Afza and Bangladesh.
men prefer other men for Newaz (2008) focused on
self-reflection, relaxation and factors determining the Methodology of The
social support. Men may act like presence of GC and influencing Study
that to confirm their own women career advancement in
identity and cultural norms Bangladesh. From the study Sampling and Sample Size
(Lipman-Blumen, 1976; Maume, they have found that,
1999). Another reason behind management’s perception and The present study was
difficulties in career work environment are most conducted on a sample of
opportunities for women may significant factors in case of ninety (90) employees from
be the attitude of management creating glass ceiling in an five, purposively selected,
toward having female leaders in organization. In addition to private commercial banksin
top positions of the organizational policy and work Dhaka City having total 1225
organization. In that case, life conflict have been identified female employees (72 of NRB
management perceives that as second most significant Commercial Bank Ltd., 176 of
men are better suited to factor contributing to the GC Dutch-Bangla Bank Ltd., 342 of
leadership positions than are effect in the organization. Southeast Bank Ltd., 285 of
women (Kanter,1997; Reskin
United Commercial Bank Ltd.,
and Hartmann, (eds) 1986). Career development refers to a 350 of Bank Asia Ltd.). The
lifelong process of becoming sample percentage is normally
Men in strategies could use such conscious of, exploring and distributed. For calculating
attitude to secure power, experiencing factors that sample size following formula
authority and other privileges influence a variety of aspects of has been used:
(Acker, 1990). Research on GC a person’s life. Knowledge, skills
in Bangladesh is very limited and attitudes evolved through 𝑁𝑃𝑄
Sample Size, 𝑛 = ( 𝑁 - 1)𝑒
and unexplored. Previous this path of discovery enable +𝑃 𝑄
𝑧
research works done by planning and decision making

ARTICLE
Where, and email. The questionnaire Frequency distribution, mean,

used a 5-point Likert scale and standard deviation are used
N = population size; ranging from 1 (strongly to analyze the data.
disagree) to 5 (strongly agree)
z = the selected critical value of to measure respondents’ Results and Discussions
desired confidence level; responses. Secondary data
were collected from various Nowadays participation of
P = the estimated proportion of articles, national and women employees in different
an attribute that is present in international journals, doctoral work field has increased.
the population; theses, periodicals, and different Banking sector is one of them
online sources. where females are highly
Q = 1- p; and encouraged to work in. As we
Data Analysis Techniques are trying to evaluate the
e = the desired level of precision impact of GC on women career
(margin of error). The data were analyzed using development, we collected
SPSS 20.0. ‘Strongly disagree’, responses from 90 respondents
(Weirs, 2005; Newbold, et.al., ‘Disagree’, ‘Neutral’, ‘Agree’, and to fulfill our objectives. Their
2003; Davis, et.al., 2002; ‘Strongly agree’ were coded as demographic information is
Anderson, et.al., 1996; 1, 2, 3, 4, and 5 respectively. shown as under:
Mendenhall &Reinmuth, 1982)
Assuming the maximum Table 1: Reliability Statistics

variability, which is equal to 50% Cronbach's Cronbach's Alpha Based No of
(P = 0.5), (Q = 1-P), with ±10% Alpha on Standardized Items Items
precision (margin of error) and .800 .801 14
taking 95% confidence level the
standard score (z = 1.96) arises. Table 2: Demographic Information of the Respondents (N=90)
Frequency (f)
1225 × 0.5 × 0.5 Respondents’ Age Level 25–35 28 31.11%
n=
(1225− 1). 102 Between 35-45 41 45.56%
+ 0.5 × 0.5
1.962 More than 45 21 23.33%
𝑛 = 89.1253 𝑜 𝑟90 Respondents’ Educational level Graduation 10 11.11%
Post-Graduation 71 78.89%
Other Degrees 09 10.00%
Questionnaire Development Respondents’ Designations Lower level officer 31 34.45%
and Data Collection Mid-level officer 47 52.22%
Top level officer 12 13.33%
A specially designed, 14-item Respondents’ Years of Less than 7years 33 36.67%
questionnaire was constructed experiences 8-15 years 47 52.22%
based on literature review, More than 15 years 10 11.11%
taking opinion from experts and Respondents’ Monthly Income 25-50 24 26.67%
from prospective respondents. Status (BDT 000’s) 50-75 32 35.56%
Before finalizing the 75-100 20 22.23%
questionnaire, a pilot survey More than 100 14 15.56%
was also conducted, and Respondents’ Marital Status Married 72 80.00%
necessary adjustments were Unmarried 18 20.00%
made in the questionnaire. A Respondents’ Children Status Yes 43 59.73%
total 130 questionnaires were No 29 40.27%
delivered through personal visit, Source: Field Survey and from Human Resource Department of respective banks

As the Cronbach's Alpha

coefficient (Table 1) for the 14 Table 3: Descriptive Statistics
items is 0.801, which is greater N Mean Std. Deviation
than .70, it means that the items Age 90 39.22 .835
have relatively higher internal Education 90 2.17 .375
consistency. Experience 90 1.90 .835
Income 90 69.17 1.126
From the Table 2 it is clear that Marital status 90 .80 .402
most of the respondents are No. of Children 90 .48 .502
between the age of 35 to 45 and
Valid N (list wise) 90
holds post-graduation degree.
Again, the majority of the
respondents worked at Table 4: Independent Variables
mid-level having experience of Std. Analysis
8 to 15 years with monthly Mean
Deviation N
income ranging from 50 to 75 Years of experience are fairly considered 2.26 .955 90
thousand Taka. Our study Academic excellence, specialized training and 2.26 .955 90
shows that 80% employees are courses contribute in case of promotion
married where 59.73% have Work related competencies play a vital role in 3.70 1.106 90
children. terms of career development
Long working hours in job is appreciated by 3.61 .817 90
The mean and standard family members
deviation of the demographic Life-partner provides both family and job-related 2.80 .997 90
information of the respondents support
are shown in Table 3. Here the Concern about children hampers job 3.49 .503 90
mean age of the respondents is performance
39.22 years which means most Sufficient opportunities exist for women to 2.56 .973 90
of the respondents are working advance into senior management position
at mid-level having experience Having female superior create discomfort for 2.22 1.139 90
of more than 9 years (9.34 male employees
years) and their average income Management shows reluctance in assigning 2.22 .921 90
is 69.17 thousand BDT. female employees for challenging projects
Male employees tend to grip on the powerful 2.89 1.203 90
The Table 4 shows the mean positions of the organization
and standard deviation and Competitiveness in women is considered 2.67 .948 90
number of respondents. From negatively at work
the results we can conclude that Participation in decision-making is appreciated 3.33 .948 90
factors like work related by superiors and coworkers
competencies, long working Women confront deprivation in case of getting 1.86 .572 90
hours in job, concern about financial benefits
children, participation in Ethnicity and religious issues are considered in 1.63 .626 90
decision-making is appreciated promoting into higher position
by superiors and coworkers,
male employees tend to grip on
the powerful positions of the
organization are important
variables liable for affecting
women career development.

ARTICLE
The output from communalities

Table 5: Communalities
show the variance in the
variables accounted by the Initial Extraction
extracted factors (Table 5). Fair Years of experience are fairly considered in time of 1.000 .982
consideration of years of promotion
experience (98.2%); academic Academic excellence, specialized training and courses 1.000 .982
contribute in case of promotion
excellence, specialized training
and courses contribute in case Work related competencies play a vital role in terms of 1.000 .805
career development
of promotion (98.2%);
negativity in competitiveness of Long working hours in job is appreciated by family 1.000 .576
members
women at work (86.6%), and
participation in decision-making Life-partner provides both family and job-related 1.000 .601
support
by superiors and coworkers
Concern about children hampers job performance 1.000 .805
(86.6%) show high variability
while consideration of ethnicity Sufficient opportunities exist for women to advance into 1.000 .760
senior management position
and religious issues, and long
working hours in job is Having female superior create discomfort for male 1.000 .864
employees
appreciated by family members
Management shows reluctance in assigning female 1.000 .847
show less variability.
employees for challenging projects
Male employees tend to grip on the powerful positions of 1.000 .854
Major Findings the organization
Competitiveness in women is considered negatively at 1.000 .866
The study found that women work
career development is highly
Participation in decision-making is appreciated by 1.000 .866
influenced by factors like superiors and coworkers
concern about children,
Women confront deprivation in case of getting financial 1.000 .677
coworkers’ appreciation in benefits
workplace, long working hours Ethnicity and religious issues are considered in 1.000 .484
in job, mentality of male promoting into higher position
employees to grip the higher Extraction Method: Principal Component Analysis
and powerful positions,
negativity in competitiveness of
women at work. The result also that the dropped out female children or shifting to new
shows that respondents believe staff was also substantial as the places due to their husbands’
that factors like work related banks were usually reluctant to profession, and consequently
competencies, years of promote women due to often fail to reach senior
experience, academic male-dominated attitude. Along management level.
excellence, specialized training with this male-dominated
and courses could help them in attitude, competitiveness of Conclusion and
career development. Activists, women at work is seen Recommendations
working for women, also negatively which is like the
criticize that the banks are study conducted by UNDP in This study has endeavored to
reluctant to recruit female staff 1993. Again, the study and examine the impact of GC on
due to the provision of observation of experienced women career development in
six-month maternity leave bankers and scholars found that private commercial banking
which is not profitable to banks. many female employees sector of Dhaka City. The study
As per the observation of the generally left the job due to found some factors that have
high officials of the regulatory social and family related both positive and negative
body for banks, it is also clear bindings like taking care of their impact on career development

of women. Factors like work Career Advancement in York: South- Western College
related competencies, years of Bangladesh. BRAC University Publishing.
experience, and academic Journal, 5(1), 85-92.
Morrison, A. M.; White, R. P.; Velsor,
excellence etc. need to be Armstrong, M. (2003). A Handbook E. & The Center for Creative
focused while factors like of Human Resource Management Leadership (1987). Breaking the GC:
negativity in competitiveness of Practice. London: Kogan Page. Can Women Reach the Top of
women at work, mentality of America’s Largest Corporations?
male employees to grip the Bombuwela P. M. & De Alwis A., Reading, MA: Addison- Wesley.
higher and powerful positions Chamaru (2013). Effects of Glass
Ceiling on Women Career Reskin, B.F. & Hartmann, H.I. (eds).
need to be minimized. The
Development in Private Sector (1986). Women’s Work, Men’s Work:
following recommendations Organizations: Case of Sri Lanka. Sex Segregation on the Job.
might be beneficial for both the Journal of Competitiveness, 5(2), Washington, DC: National Academy
organizations and women 3-19. Press.
employees.
Cotter, D. A.; Hermsen J. M.; Ovadia, Rosenfeld, R.A.; Van Buren, M.E. &
S. &Vanneman, R. (2001). The Glass Kalleberg, A.L. (1998). Gender
Since women having children at
Ceiling Effect. Social Forces, 80(2), Differences in Supervisory
home need to pay extra 655-681. Authority: Variation among
concern that may hamper their Advanced Industrialized
performance at work, Cotter, D. A.; Hermsen, J. M. Democracies .Social Science
organization can arrange day &Vanneman, R. (1999). Systems of Research, 27, 23–49.
care program. In addition, Gender, Race and Class Inequality:
organization should encourage Multilevel Analyses. Social Forces, The New Age (2015). Female staff
78, 433-460. percentage drops alarmingly in
women participation in decision
banking sector. Retrieved from
making to prove their Dhaka Tribune (2017). Per capita http://archive.newagebd.net/15596
capabilities. If women can prove income rises to $1,610. Retrieved 9/female-staff-percentage-drops-al
their capabilities once, it will from http://www.dhakatribune. armingly-in-banking-sector/
help male employees get out of com/business/economy/2017/11/14
the mentality to grip the /per-capita-income-rises/ U.S. Department of Labor (1991). A
Report on the GC Initiative.
powerful positions and grow
Greenhaus, J.H.; Callanan, G.A. Washington, DC: Government
positive mentality regarding the &Godshalk, V.M. (2010). Career Printing Office.
competitiveness of women. We Management. London: SAGE
believe that this study will help Publications Inc. UNDP (United Nations
the stakeholders especially the Development Programme) (1993).
policy makers. Kanter, R.M. (1997). Men and Report on Public Administration
Women of the Corporation. New Sector Study in Bangladesh. Dhaka:
York: Basic Books. UNDP.
References
Lipman-Blumen, J. (1976). Towards Zafarullah, H. (2000). Through the
Acker, J. (1990). Hierarchies, Jobs, a Homosocial Theory of Sex Roles: Brick Wall, and the Glass Ceiling;
Bodies: A Theory of Gendered An Explanation of the Sex Women in the Civil Service in
Organizations. Gender and Society, Segregation of Social Institutions. Bangladesh. Gender, Work and
4(2), 139–158. Signs, 3, 15–31. Organization, 7(3), 197-209.
Afza, S. & Newaz, M. (2008). Factors Mathis, R.L. & Jackson, J.H. (2000).
Determining the Presence of Glass Human Resource Management. New
Ceiling and Influencing Women

ARTICLE
Pitfalls of Existing Rules

on Investment Abroad by Bangladeshis
M Idris Ali FCA
C
urrent Status of with an investment of 2.5 crore
Investment Abroad US dollars. Henceforth it had
been exporting medicine to
In a recent symposium Kenya. Now due to local
Bangladesh International production, cost will be reduced
Business Forum (BIBF) by 40% and about 1500
expressed its opinion that now Kenyans will get employment in
it is an opportune moment for the factory. (Prothom Alo 10
Bangladeshi entrepreneurs to January, 2018)
invest abroad. Either following
its recommendation or under Let’s now preview the salient
pressure from the features of the rules framed by
entrepreneurs/ industrialists, a BB pursuing Bangladeshis’
committee constituted in the investment abroad.
Prime Minister’s office for this
task has recommended that a) Those exporting entities
The Author is a only capable and financially which do not bring in the
Chartered Accountant and solvent and proven export proceeds to home in
a Fellow Member of the entrepreneurs may be time, those which do not
Institute of Chartered Accountants permitted to invest abroad. repay the import debts,
of Bangladesh-ICAB Accordingly, Bangladesh Bank those which are loan
(BB) has framed rules and defaulters and tax
regulations which will govern defaulters will not be
issuing such permissions and permitted to invest abroad.
monitoring the investments
b) The applicant will have to
abroad. But before framing the
do the same or associated
rules BB has already permitted
or supplementary business
8 groups of companies from
abroad and will have to
2013 to date to invest abroad
prove by a feasibility study
from their export retaining
report that the business will
quota (ERQ) in foreign
be profitable.
currencies abroad. The groups
are DBL, ACI Health Care, c) The investment will have to
Square Pharma, Mobil Jamuna, increase income, export of
Incepta Pharma, BSRM Steel, the country and
Spectrum Engineering. In employment possibilities of
November 2016, Akij Group has Bangladeshi personnel.
been permitted to invest 2 crore
US Dollars in Malaysia. Moreover d) The applicant organization
Hamim Group, Nitol- Niloy will have to employ persons
Group, Summit Group, Meghna having expertise of
Group and Pran RFL Group business, financial and
have submitted applications for investment matters.
permission to invest
respectively in Haiti, Gambia, e) Those who are loan
Singapore, Cambodia and India. defaulters and have
(Prothom Alo 5 January ,2018). rescheduled loans will not
Square Pharma has established be considered until those
its factory in Nairobi at Kenya loans are settled.

f) Investment will not be allowed in those

If located at home If located abroad
countries which do not permit repatriation of
Government may Government may
profit, capital and commission etc., those
earn: earn:
which have no dual taxation waiver contract
with Bangladesh and those which will not
Custom duty, I. tax on Dividend
permit employment of Bangladeshi
supplementary duty, @ 10% Tk 8 crore
personnel.
VAT etc. on only, remittances
imported goods @ of dividend Tk 80
If we analyse the rules we find that country’s
average 15%, Tk 90 crore and
interest has been preserved while allowing capital
crore, utility bills, say remittance of
flights abroad, but practical accomplishment may
Tk 10 crore excise salaries of
not be as easy as stipulated in theory.
duty, sales tax, I. tax Bangladeshi
on salaries/ wages, employees.
say Tk 100 crore,
Corporate tax
Economic benefit of the country is
the first and foremost consideration. @35% Tk 35 crore,
I.tax on Dividend
@ 10% Tk 8 crore
By now we may conclude that surplus

capacity of the Bangladeshi Total Tk 243 crore
entrepreneurs is more needed at From the above comparative analysis

home and it is more beneficial for the even a layman can calculate and opine
country. Our economy is much that investment abroad by entrepreneurs
smaller than those of China, Malaysia, is not beneficial to the Government and
people of Bangladesh.
India and so on.
It may not Increase Income and
Export
Manipulation of accounts leading to Investment abroad may not necessarily

understatement of profits, reversely increase income and export of the
overstatement of costs and expenses cannot be country as envisaged in the rules. Then
prevented from home. Consequently, laundering the question arises how some economists
or smuggling out profits may not be controlled. recommend that this is a suitable time for
Secondly the objective of growth of income, entrepreneurs to invest abroad? Those
export and employment possibilities of economists probably never analyze
Bangladeshi personnel may not be thriving in financial performance data and probably
lockstep with expectation. nourish misapprehension about
objectives of world’s top economies viz.
Let’s examine a comparative study of USA, China, Malaysia, India, UK etc. and
hypothetical return from an investment placing it those of Bangladesh in placing
abroad and at home. An entity has an investment investment abroad. The giant economies
of capital Tk 200 crore, annual import of raw of the world manufacture sophisticated
materials Tk 600 crore, cost of goods sold, industrial machinery, technical knowhow
expenses and taxes Tk 500 crore, turn and raw materials which require a wide
over/export Tk 1200 crore, net profit after tax Tk market abroad. Those countries have a
100 crore, dividend @40% Tk 80 crore. high ambition of marketing their hi-tech

ARTICLE
aggravation. This will

exacerbate the social coalition,
giving rise to crimes and other
unsocial activities.
Private Investment
Situation in the Country
Bangladesh is crying for both
FDI and local private
investment. Currently private
investment in the country
amounts to 22 to 23% of GDP
which is not enough to enable
the country achieve SDG goals
and become a developed
and hi-price products abroad, manpower abroad, but it may country. The Government is
that’s why they invest their own not be realized too if the trumpeting to attract FDI. For
capital in order to import those Government of the beneficiary this purpose, it is building
products as a condition of country does not guarantee in economic zones, allowing tax
investment. Bangladesh’s writing. Square Group in Nairobi holidays and offering other
objective is quite different. It has is going to employ 1500 incentives. On the contrary it is
no capital machinery or raw Kenyans in its factory and office. permitting private
materials (except jute, hides, By doing this it will deprive entrepreneurs to invest abroad,
skins etc.) to export to the double the number i.e 3000 this seems to be contradictory.
beneficiary country. Bangladeshi workers who could It is not to be called ancient or
Bangladeshi entrepreneurs be employed with the same backdated approach, the
nurture ambition of making remuneration on long term matter has to be considered
same or more profit than at basis had Square Group based on practical result, i.e
home and retain or transfer part obtained prior written economic benefit of the
of these profits outside since permission from the Kenyan country. If local private
foreign currencies are not Government. In this case investors do not like to invest in
allowed to be transferred country’s benefit has been the country then foreign
abroad without permission. neglected. Unemployment investors may also hesitate to
Some of them may be inclined situation in Bangladesh is still invest in Bangladesh, making a
to buy 2nd home in Malaysia or acute. Three crore educated mockery of the government’s
a luxury house in Begum villa, men and women are languishing sincere efforts to shore up
Canada, or open an account in in search of jobs. Government investment in the country.
Swiss Bank. Human being are has no vacancies and funds to
prone to capitalize accommodate even a small Capital Flight
opportunities looming over portion of them. Only private
their nose. sector industries, NGOs and Some economists opine that if
entrepreneurs can provide them financially capable
Employment jobs in new avenues. If private entrepreneurs are not permitted
Opportunities sector is encouraged and like in China, Malaysia, India etc.
allowed to go abroad to invest to invest abroad, then the
For Bangladesh the only in novel factories, businesses capital flights may take place.
objective that may be achieved then the unemployed mass Hasn’t the Government
is employment of Bangladeshi within the country will be left in permitted so many industrial

groups to invest abroad since So far no mega solar projects This will increase the volume of
2013? Then why capital worth like in India, China, EU countries private investment at home,
thousands of crores Taka has has been established to shift to enable the country to enhance
already flown to Malaysia, renewable green energy. Many GDP growth, build capacity to
Canada, Switzerland etc.? Those countries in the world have earn UN prescribed SDG’s and
who are not patriotic, those who advanced very far in this area. become a developed country.
are prone to smuggle out Bangladeshi capable
capital, nothing except entrepreneurs may be References
humiliating punishment can motivated to come up in local
stop their financial crimes. ventures with their resources Daily Prothom Alo 05-01-2018
instead of going abroad.
Incentives and Daily Prothom Alo 10-01-2018
Investment Fields Change in Rules
www.bb.org.bd
Bangladesh Government is Economic benefit of the country
seeking foreign direct is the first and foremost
investment (FDI) in industries consideration. By now we may
for which spaces and other conclude that surplus capacity
facilities in Economic zones are of the Bangladeshi
allotted at cheap rates, tax entrepreneurs is more needed
holidays, repatriation of at home and it is more beneficial
dividend and capital facilities for the country. Our economy is
etc. are lowed randomly. It is much smaller than those of
also looking for FDI in national China, Malaysia, India and so on.
infrastructural projects like Hence we cannot afford to
power generation, gas invest abroad merely to raise In gross terms,
exploration, roads, bridges, our image sacrificing country’s Foreign Direct
highways, flyovers construction, benefit. The rules may,
metro rails, MRT, airport, deep therefore, be changed as below Investment (FDI)
sea port, offshore oil and gas in order to discourage such increased to
terminals construction and so investment abroad:
on. These are all profitable
$1.75 billion in
ventures and can be 1. All manpower (100%) in the July-December
participated by Bangladeshi beneficiary country must be period of 2017
capable entrepreneurs employed from Bangladesh.
independently or in partnership This will help solve domestic
from $1.03
with foreign investors or unemployment problem. billion in the
Government directly or include same period of
PPP. All types of incentives as 2. 100% of the tax paid profits
allowed to foreign investors must be brought back 2016, latest
may be granted to the home as dividend without central bank
Bangladeshi entrepreneurs so leaving any portion abroad. statistics show.
that they are attracted to local
investment instead of going 3. The annual financial
abroad. For this purpose, statements and books must
one-stop service desk, be audited by SOURCE
investment-friendly internationally reputed The Financial Express
15th February 2018
environment, political stability is Chartered Accountants
also sine qua non to be ensured. firms.

ARTICLE
Proposed CGG, Criticism and Recommendations
Muhammed Omar Faruk Ripon FCA
P
reface Commission will review from
time to time the percentage of
With a view to enhance shareholding required by each
corporate governance in the director separately and by all
interest of investors and the the sponsor directors together
capital market, Bangladesh in the paid-up capital of the
Securities and Exchange company. It also focuses on
Commission, as regulator of which work would be
Capital market, issued guideline performed by whom like the
on Corporate Governance first CEO and the CFO in the
time on February 20, 2006, company. It also defines that
second time on August 07, 2012 the position of the CS, CFO,
and recently at the end of 2017, HIAAC and HACT shall be filled
new Corporate Governance up by separate person. As per
Guidelines (CGG) as proposed the guidelines, the responsibility
soliciting public opinion. The of reporting and certifying to
The Author is a proposed CGG encompasses the board, the financial
Chartered Accountant and conditions or codes to be positions and those of
a Fellow Member of the complied by the companies authentication of transactions
Institute of Chartered Accountants listed with the Stock Exchanges of the company shall be vested
of Bangladesh-ICAB in Bangladesh, within December with the CEO and CFO and
31, 2018 and encourages to certification shall have to be
‘comply or explain’ the disclosed in the annual report of
conditions or codes set under the company. It also provides
Chapter D (Environment and for the mechanism for
Social Responsibilities - ESR) by constitution and composition of
December 31, 2020. The newly various committees in the
issued guidelines basically is an company and also of the
extract of guidelines issued by functions to be performed by
the similar Regulatory Bodies in the Committees. With regard to
India, USA and UK, with some earnings of the company and
modifications. distribution of the same, the
proposed guidelines make
Scope Improved than things clearer than they were
Existing Guidelines before. It says, if a company
wants to offer stock dividend to
The proposed guidelines are the shareholders, it must explain
vastly improved over the why it wants it instead of cash
previous one. It contains payment and what it will do
detailed outlines about the with the retained earnings in
composition of the boards of case of such offering. It says if a
the listed companies, although, company distributes less than
allowing some differences for the earning per share as cash
different types of the dividend, it shall have to explain
companies, like- Banks, NBFIs, why it is distributing less and
Insurance and Statutory Bodies what it will do with the retained
for which there are separate or undistributed income. It
primary regulators like BB, discourages declaration of
IDRA, etc. It states that the bonus/stock as interim

dividend. In case of dividend payment default, the Independent Director(s) [1/5th to 2/3rd
Exchange shall notify the facts and the name of of the board, but for Bank Company it will
defaulting company by notice or through online be at least 03 where the BOD consists 20,
news of the Exchange. Inclusion of codes on if less than 20, then at least 02] and/or
annual declaration on independence by statutory maximum 02 Executive Director(s)
auditor and making pool of prospective having at least bachelor degree without
independent directors are really appreciable allowing any remuneration for attending
issues. in the board or sub-committee meetings.
At least 1/10th of the BOD shall be of age
A Snapshot Comparing Between the between 25 to 40 years and board shall
Existing and Proposed CGG not consist with all of foreign nationals.
Nominating shareholder has to hold at
Ways of improvements in many areas with adding least 5% shares to nominate director in
new spaces are focused, like- BOD Composition, the board of the company.
negative prescription on Independent
Directors(ID), report to the shareholders by the Independent Directors as per
Guidelines
The proposed guidelines are vastly To include core competencies in the

company, representation of independent
improved over the previous one. directors on Board is given substantial
It contains detailed outlines about priority and negative eligibility
prescription is notably improved than
the composition of the boards of the existing CGG, for example-
listed companies, although, allowing
• Set maximum numbers of ID in the
some differences for different types Board [2/3rd of the Board]
of the companies, like- Banks, NBFIs,
Insurance and Statutory Bodies for • Shareholdings in the company not
compulsory
which there are separate primary
regulators like BB, IDRA, etc.
Directors, sr. management composition,

subcommittees constitution and roles, financial
disclosures, self- declaration and compliance test
through checklists, etc.
Board of Directors and its Composition
Directors in the board should be 5 to 20 and

consist of Promoters or Sponsors with holding of
shares and General Shareholders including
Institutional Shareholders and Independent
Directors. General Shareholder’s shall include at
least 01 General Shareholder; 01 Female
Director(s) as Shareholder Director or ED or ID;

ARTICLE
Points of discussion Existing Guideline Proposed Guideline

No. of Chapters N/A 06
Heading of N/A Chapter A: Board of Directors and its Composition
Chapters Chapter B: Composition of Senior Management
Chapter C: Board and other Committees
Chapter D: Environment and Social
Responsibilities Committee
Chapter E: Financial Reporting and Disclosures
Chapter F: Miscellaneous
No. of Major 07 14
Conditions
Subject Matter of 1) Board's Size, ID and Qualification, 1) BOD, its composition and ID.
Conditions Role of Chairman and CEO, 2) Governance of BOD of Subsidiary Company.
Contents of Directors’ Report to 3) Composition of Senior Management.
the Shareholders 4) Board Committee.
2) Appointment and Requirement to 5) Audit Committee.
attend the Board Meetings by 6) Nomination and Remuneration Committee.
CFO, HIA and CS 7) Risk Management Committee.
3) Constitution, Chairman and Role 8) Executive Committee.
of Audit Committee and 9) Environment and Social Responsibilities
Reporting to the Board, Committee.
Authorities, Shareholders and 10) Financial Reporting and Disclosures.
General Investors 11) External/Statutory Auditors shall not engage
4) External/Statutory Auditor shall in certain services.
not engage in certain services 12) Exchange’s Roles on compliance of Corporate
5) Directors of Holding Company in Governance codes by the company.
the Board of Subsidiary Company 13) Reporting and Compliance of Corporate
6) Duties of the CEO and CFO Governance.
7) Reporting and Compliance of 14) Compliance of Other Laws.
Corporate Governance
No. of Annexures 01 07
Headings of Status of Compliance with Conditions A: Check list for Appointment of ID
Annexures B: Declaration by ID annually on his independence
to the Board
C: Ratio Analysis
D: Declaration by the CEO& CFO on Financial
Statements
E: Certificate by Auditor on Compliance with
Corporate Governance Issues
F: Status of Compliance with Conditions imposed
by the SEC, certified by Auditor other than
Statutory Auditor
G: Policies and Procedures Assessment Check
List
No. of Committees 01 05
Types of Audit Committee consisting 03 1) Audit Committee (AC).
Committees and members 2) Nomination and Remuneration Committee
their Constitution (NRC).
3) Risk Management Committee (RMC).
4) Executive Committee(EC).
5) Environment and Social Responsibility
Committee (ESRC) Optional.
All committees consist 03 members, but 05 for EC

• Set the clause of extended 2) Not a holder of shares significant contribution/

family members donations from the
3) Not a nominated director company and its concerns
• Number of companies for and vice versa
directorship is increased to 4) Not an executive of the
5 from 3 company in immediately 9) Not a member/ TREC
preceding 2 (two) FYs holder, director or officer of
• Requirement of taking any stock exchange
clearance from the SEC for 5) No family connection with
appointment of ID promoters/sponsors/direct 10) Not a shareholder, director
ors/persons or Board or or officer of any
• Inclusion of provision of Management level member/TREC holder of
reappointment based on personnel or related stock exchange or an
cooling period concerns or shareholder intermediary of the capital
holding 1% or more shares or securities market
• At least 01 ID on the BOD of of the company
the holding company shall 11) Not a partner/executive
be a director on the BOD of 6) No material relationship during 03 preceding years
the subsidiary company with supplier, service of the statutory audit firm
provider, customer, lessor or audit firm engaged in
• Making pool of prospective or lessee internal audit services or
independent directors conducting special audit or
7) No pecuniary or other professional certifying
In Brief Negative relationship apart from compliance of corporate
Prescription/Criteria to receiving the director’s governance codes and legal
be an ID remuneration firm and consulting firm(s)
that have a material
1) Not a promoter or sponsor 8) Non association with any association with the
or director entity that received company
12) Not defaulted bank loan,

utility bills
13) Not convicted for any

criminal offence including
moral turpitude, forgery,
monetary offence, capital
market manipulation and
noncompliance of securities
laws
14) Not hold the office of ID in

more than 05 listed
companies
Appointment and Tenure

of Office of an ID
1) ID shall be appointed by the

Board.

ARTICLE
• ID shall have at least 12

years of experiences, and
requisite qualifications may
be relaxed subject to prior
approval of the
Commission.
Board and other

Committees as per the
proposed CGG
Usually 04 committees most

often are appointed as standing
committee by the listed public
companies in most countries are
- the audit committee, the
remuneration committee, the
nominations committee and the
risk committee, made up of
independent non-executive
2) Prior clearance from the Leader [Top Level directors, with at least one
Commission has to be Executive] of an unlisted individual having expertise in
taken. company having minimum financial management. In line
paid-up capital of Tk. 200 with this basic practice, the
3) Approval of the million or any listed proposed guidelines make the
shareholders in the AGM company or a member of following provisions on Board
has to be taken. any national or international and its’ sub-committees.
chamber of commerce or
Vacant and Tenure of business association, or For ensuring good governance
Office in the listed companies, the
• Bureaucrat or Government board of directors shall have at
The post of ID cannot remain Official [Employee, not least following sub-committees:
vacant for more than 90 below grade-5 of the
(ninety) days. Tenure of office national pay scale, of 1) Audit Committee (AC);
of an ID shall be for a term of 3 government or statutory or
years, which may be extended autonomous or regulatory 2) Nomination and
for another 01 term only. A body] having at least Remuneration Committee
former ID may be reappointed bachelor educational (NRC);
for another 01 term after a time degree in economics or
gap (cooling period) of 01 term commerce or business or 3) Risk Management
from his completion of law, or Committee (RMC);
consecutive 2 (two) terms.
• University Teacher, or 4) Environment and Social
Qualifications of ID Responsibility Committee
• Professional [Practicing (ESRC-Optional); and
Shall be a - advocate at least in the
HCD of Bangladesh SC or a 5) Executive Committee (EC)
• Business Leader [Promoter CA or CMA or CS] as a standing Committee.
or Director] or Corporate

Constitution, Proceeding, etc. of Different Committees are Tabulated Below:
Point of
Discussion AC NRC RMC EC ESRC
At least Members 03 03 03 05 03
Composition Chairperson (ID) and Chairperson Chairperson MD/CEO, COO, Chairperson (ID)
02 Members (ID) and 02 (NED) and 02 CS, CFO, HIAC, and 02
Members Members HICT (Top Members
Executives)
Criteria of All are financially All members All members The MD/CEO of All members are
Members literate, NED from the are NED are NED, the company NED, including
board. At least one where including shall represent at least 01 ID
member shall have majority are MD/CEO, 01 the chair.
accounting or financial ID. AC member. Sr.
management Executives are
background. allowed in this
Chairperson and ED of Committee
the board are not
allowed to Audit
Committee.
Number of At least 04, additional At least 01, At least 03, At least once in At least 02
Meetings in a are allowed. additional are additional are a month
Year allowed. allowed.
Time gap Not more than 04 N/A N/A N/A N/A
between 02 months
Meetings
Quorum Presence of 02 Presence of Presence of 02 Presence of 03 Presence of 02
members or 2/3rd, 02 or 2/3rd, members or members or members or
whichever is higher, whichever is 2/3rd, 2/3rd, whichever 2/3rd, whichever
Presence of an ID is higher, whichever is is higher. is higher.
must. Presence of higher.
an ID is must.
Notice of At least 07 days Not discussed
Meeting before scheduled date
of meeting
Report to whom The BOD, the The BOD and The BOD and The BOD and Recommendatio
Commission, the the the AC Sub- n to the BOD
shareholders and the shareholders Committees
General Investors
Remuneration of Not discussed No Not discussed No Not discussed
Members remuneration remuneration
in addition as for attending EC
director’s fees meeting
Loopholes in the 2. Maximum number of 5. Dis-qualification of

Guidelines sponsor or directors from Independent Director due
close family relation not to trivial issue like utility bill
There are some loopholes in the mantioned. default included, but not tax
guidelines, for example - default.
3. Maximum age limit for
directorship not specified. 6. Does not say anything on
1. No indication on minimum
educational qualification for 4. ED in the board to be criteria and range of
sponsor directors. selected from which remuneration for ID.
department/s in not started.

ARTICLE
7. Special cases, on which contemporary and cover recent commission by a company

qualifications and issues, following which had occurred with his
experiences of ID may be recommendations may be knowledge, attributable
relaxed, are not clearly considered to eliminate the through Board processes,
detailed. scope of shortcomings and and with his consent or
ensuring core compliances. connivance or where he had
8. Silent on remuneration, not acted diligently.”
perks, qualification and 1) Number of sponsor
grounds of removal of top directors in the board may 5) ID should not be a Tax
personnel. be fixed with high-low limit. defaulter.
9. Requirement Interim 6) The salaries and other perks

2) Maximum number of
dividend for to be paid on of CEOs, CFOs and HIACs
sponsors or directors in the
the basis of related should be shown separately
board from the close family
periodical audited financial in the annual reports.
relations may be fixed.
statements, will increase
cost of compliance! 7) In case of noncompliance of
3) Room for ED in the Board in
our country’s respect, may audited accounts with
10. Less time is allowed (only relevant standards, the
90 days) for being audit of not add any value to
corporate governance, as in statutory auditor may be
annual financial statements made answerable to the
from the year end, except most cases their opinions
get no value over what is Exchanges due to
for Life Insurance Company, non-disclosure in the audit
allowing time extension by desired by business owners.
Therefore, may be reports.
the Commission on
application, but not withdrawn.
8) There should be an
indicated specific time limit indicative guidelines on
to be allowed. 4) Liability clause of
independent director may audit fees of Statutory
Recommendations be introduced and it may be Auditor and Corporate
as follows, “an ID shall be Governance Compliance
Though the proposed held liable only in respect of Assurance provider.
guidelines are very much such acts of omission or
9) Allow more time, at least 02
years, for ensuring
compliance.
10) To concise the length of

compliance requirements
specifically under Chapter-E
(Financial Reporting and
Disclosures), some
conditions may be
eliminated from the CGG, if
those are covered by the
Companies Act and the
Stock Exchange Rules.

Board in Other Countries directive of the majority. Thus

and Under Different the spirit of the provision that
Laws directors will be appointed by
the shareholders is mostly
In UK, ED is a member of the defeated. It is the majority
board, elected by employees shareholders or in other words,
and shareholders and might be the sponsors who actually
an employee, officer or select the directors. Individual
stakeholder in the company; directors often serve in more
usually don’t receive than one board. This practice
results in an interlocking
The journey that
remuneration for their role on
the board. An ED of one board directorate, where a relatively Bangladesh has
can be a NED on another small number of individuals struggled since
company’s board. have significant influence over a
large number of important independence in
In the USA, Board is also made entities. Amendment regarding less than 50
up of ED and NED. As per Indian constitution of Board and ID are years is
Companies Act, Board of a no doubt, a giant step to be
public company consists of taken to improve corporate remarkable.
individuals as directors and governance standards. That’s
However, to meet the objectives
have 03 to 15 directors including something the
at least 01 Woman Director, at of corporate governance,
least 01 Resident Director, at independence of ID should be country can be
least 1/3rd of board as ID. focused. In real world, the proud of. The
However, company may independence of independent
director is highly jeopardized, as
country should
appoint more than 15 directors
on passing a special resolution. their selection basically lies in take inspiration
As per the Bangladesh the hands of the owners of the from that to
Companies Act, 1994, board company or they are directly
consists of maximum 20 handpicked by the promoters. move forward in
directors including 3 or 2 There is no separate law under terms of its
independent directors. Contrary which an independent director development
to this, the board of Insurance operates. In other words, he has
Companies consists of no legal protection from the agenda” said by
maximum 20 directors including management so that he can the UN Resident
raise his voice fearlessly.
12 as promoters, 6 as Coordinator in
policyholders (of public shares)
and 2 as independent directors. Sources Dhaka Mia
Seppo in an
Conclusion Corporate Governance
Guidelines issued by the BSEC, interview.
It is not always true that Bangladesh
directors actually represent the The Companies Act, 1994
various groups of shareholders.
Sometimes vested quarters The Bank Companies Act, SOURCE
group together and keep 1991(Revised-2013) The Financial Express
lobbying which hampers the 2 March 2018
nd
interests of minority The Insurance Act, 2010

shareholders at large at the
Internet

ARTICLE
Wellsprings of Government's Revenue and

Propositions for Improving Revenue Accumulation
- S M Ashfaqur Rahman ACA
E
xecutive Summary Introduction
Bangladesh has achieved the

Lower-Middle Income Country
Bangladesh has already fulfilled status in 2015 and now in the
eligibility criteria set by the path of becoming a Middle
United Nations for becoming a Income Country by the year
developing country which 2021. Furthermore, Bangladesh
would allow the Government to has recently achieved the right
apply for recognition in 2024 to apply for the Title of
after successful assessment by “Developing Country” in the
the United Nations Economic year 2024 after completing all
and Social Council (ECOSOC) the required eligibility criteria.
(Dhaka Tribune, 2018). However, for achieving the new
Furthermore, Bangladesh is status, Bangladesh Government
destined to be a middle income is required maintain compliance
The Author is a country by the year 2021 for of all required criteria till 2021
Chartered Accountant and which it requires colossal and upon receiving
an Associate Member of the revenue for the development confirmation in 2024,
Institute of Chartered Accountants projects. Now, as Foreign Aid or Bangladesh Government would
of Bangladesh-ICAB Assistance would not be require to maintain
provided to Bangladesh which it development for the next 15
enjoyed under “Low Income years to achieve the next status.
Country” and “Least Developed All of these expectations were
Country” Title, Government of reflected in the budget passed
Bangladesh is required to on July 2017 where the total
increase its revenue from the expenditure has been estimated
major source of revenue such as to be Tk. 400,266 Crore. In
Income Tax, Value Added Tax, order to meet these expenses,
Customs Duty and others. This the Government has also
article tries to educate its reader provided estimated revenue
about the sources of revenue of collection (Finance Division,
Government and what steps Ministry of Finance) of Tk.
can be taken to increase the 492,541 Crore for the fiscal year
inflow of such revenue. 2017-18, where 50% of the

revenue will be collected by NBR, 29% will be From the above data, it is again evident
collected through Domestic Loan Receipts and that NBR receives more than 2/3rd of its
11% through Foreign Loan Receipts. A snapshot of revenue from Taxes on Income and Profit
the government’s revenue sources for the Fiscal & Value Added Tax (VAT) where
years 2017-18 (Projected), 2016-17, 2015-16, collection from VAT ranks first. Now,
2014-15 & 2013-14 is given below: according to provisional data released by
National Board of Revenue (The New
From the above, it is evident that the Government Age, 2018), in the first half of Financial
of Bangladesh receives 50% of its revenue Year 2017-18, Tk. 92,532 Crore has been
through Taxes and Duties imposed by the NBR. collected where Tk. 34,808 Crore, & Tk.
Again, NBR’s revenue sources for the Fiscal years 28,022 Crore represents the figure
2017-18 (Projected), 2016-17, 2015-16, 2014-15 & collected as VAT and Taxes on Income
2013-14 is given below: and profit respectively. Therefore, for
maximizing revenue collection by
Government, we are required to focus on
Bangladesh has achieved the challenges in collecting Tax more
importantly Value Added Tax and find
Lower-Middle Income Country status ways to eradicate such challenges.
in 2015 and now in the path of Value Added Tax
becoming a Middle Income Country
by the year 2021. Furthermore, A value-added tax (VAT) is a type of
consumption tax that is placed on a
Bangladesh has recently achieved product whenever value is added at a
the right to apply for the Title of stage of production and at the point of
retail sale. The amount of VAT that the
“Developing Country” in the user pays is on the cost of the product,
year 2024 after completing all the less any of the costs of materials used in
the product that have already been
required eligibility criteria. taxed.
250,000
Bangladesh Government's Revenue Sources
National Board of
200,000 Revenue (NBR) Tax
Non-NBR Tax
Amount in Crore
Non-Tax Revenue
150,000
Foreign Grants
100,000 Recovery of Loans
and Advances
Domestic Loan
50,000 Receipts
Foreign Loan
Receipt
- Transaction with IMF
2017-18 (Projected) 2016-17 2015-16 2014-15 2013-14

ARTICLE
(Amount in BDT Crore)

Particulars 2017-18 (Projected) 2016-17 2015-16 2014-15 2013-14
Taxes on Income and Profit 85,176 62,754 51,796 48,614 44,370
Value Added Tax (VAT) 91,254 68,675 53,913 49,573 45,877
Import Duty 30,024 21,572 17,119 15,103 13,433
Export Duty 44 34 34 31 41
Excise Duty 1,599 1,200 1,034 935 1,203
Supplementary Duty 38,402 29,520 25,064 19,852 19,157
Other Taxes and Duties 1,691 1,246 1,040 920 919
Example of VAT Taka 172.5 and pays the • Indirect taxes on

government (Taka 22.5 minus necessaries yield large
Without any Taxation during Taka 18) = Taka 4.5, leaving the revenue, because people
Sales, a meat-shop owner, for same gross margin of (Taka must buy these things.
example, spends Taka 100.00 172.5 – Taka 138– Taka 4.5) =
on raw materials and uses them Taka 30. In total, the consumer • It is equitable when
to make a patty. The patty is has paid Tk. 22.5 more but the imposed on luxury or goods
then sold to a restaurant owner whole amount has been consumed by the rich.
for Taka 120, leaving a gross received by the Government
margin of Taka 20. The which they will use for the • When imposed on harmful
Restaurant Owner then betterment of the country and items, it can serve as a
prepares a burger from the its citizen. barrier for consumption of
Patty and sells the burger to a such goods and thus
consumer for Taka 150, leaving Advantages of VAT providing benefit to the
a gross margin of Taka 30. Here, economy.
the government does not • Due to reporting of
receive any money from the documentation of VAT, it Disadvantages of VAT
different purchases made by minimizes avoidance.
meat-shop owner, restaurant • As the VAT is based on full
owner and final consumer. • Huge amount of revenue is billing system, VAT
generated on a low tax rate implementation is
With a 15% VAT, the Meat-shop through VAT as poor are expensive.
owner spends (Taka 100 x 1.15) = also getting the opportunity
Taka 115 for the raw materials to contribute. • VAT is regressive in nature.
and the seller of the raw Thus it will affect the poor
materials pays the government • As the VAT is collected in people more than the rich
Taka 15. The manufacturer small installments so the because they spend more
charges the retailer (Taka 120 x consumers has minimum proportion of their income.
1.15) = Taka 138 and pays the burden.
government (Taka 18 minus • All purchase and sales
Taka 15) = Taka 03, leaving the • VAT can be applied to many records should be
same gross margin of (Taka 138 items and hence gets rid of maintained which will cause
– Taka 115 – Taka 03) = Taka 20. harmful effects of focusing increased in compliance
The retailer charges the on one single point such as cost.
consumer (Taka 150 x 1.15) = Income.

• The consumers need to be services to fit all their needs. As citizens of Bangladesh to
cognizant for successful discussed in above, the direct ascertain the impact of Value
implementation of VAT taxation is applied in advance in Added Tax on purchases made
otherwise tax negligence respect of individual’s income by the citizens. Now, as per an
will be extensive through and hence Direct Taxation empirical study on Politics,
fake invoices. doesn’t depend on daily Governance and Middle Income
consumptions. However, VAT is Aspirations: Realities and
Consumption Pattern of applied only when a citizen Challenges performed by Power
Citizen of Bangladesh purchases goods and services and Participation Research
and hence, a citizen has the Centre with support from UNDP
Consumption pattern is defined power to decide the timing of (2016), the expenditure pattern
as the process by which VAT payment. Therefore, it is of Citizen of Bangladesh are
individuals identify, purchase essential to identify shown below:
and consume products and consumption patterns of the
Consumption Pattern of Citizen of Bangladesh

Food
Fuel
3%
2% Utilities
7% Transporation
20%
Rent
2% 2%
Education
1%
Medicine
2% Medical Treatment
2% 2% Telephonic
Toiletries
5%
4% Salaries for Sub-ordinate
Garbage Disposal
0% 4% Money remitted to kin
Clothing
10% Furniture
Electronics
12% Recreation
Festival
2%
2% House Repair
7% 8% Legal
2%
Other
Salaries
Medical
Food Fuel Utilities Transportation Rent Education Medicine Telephonic Toiletries for Sub-
Treatment
ordinate
20.10% 1.90% 3.80% 4.40% 11.70% 8.10% 2.20% 6.90% 2.30% 1.50% 9.80%
Money
Garbage House
remitted Clothing Furniture Electronics Recreation Festival Legal Others Total
Disposal Repair
to kin
0.20% 5.30% 2.00% 2.10% 1.20% 1.80% 2.10% 7.20% 2.40% 3.00% 100%

ARTICLE
Effect of VAT on Consumption Registered Institutions. applicable VAT rate would be

Pattern 4%. Similarly, for utilities,
i. Considering Average Income Medicine, Telephonic
As already discussed above, the of the Population Conversation, Toiletries,
consumers/citizens pay Tax on Clothing, Furniture, Recreation,
Income and VAT when they As per the empirical study Festival, House Repair and
procure/purchase goods/ performed by Power and Legal services, the applicable
services. As a result, Participation Research Centre VAT Rates are 15%, 4%, 15%, 4%,
consumptions are broadly with support from UNDP, the 4%, 15%, 15%, 15% & 15%
effected by VAT. Below are two average income of population respectively. For calculation
consumption scenarios, one for of Bangladesh is Tk. 31,833. As purpose, let us assume that
Citizen’s who have Average per the above consumption remaining expenditures are
Income of the population of pattern, on average a citizen purchased either locally where
Bangladesh and other for would bear the following payment of VAT is not possible
Citizen’s who have Average expenses: or VAT rate is 0% (Zero). As a
Income of the population of result the yearly VAT paid for
Dhaka, showing how much VAT Now, if we consider, that all the different expenses by a citizen
is being paid by the Citizen’s in food items are purchased from amount to Tk. 13,865 which is
case they purchase from VAT grocery stores, then the shown below:

Taka 230,000 Approx., House ii. Considering Average Income section the yearly VAT paid for
Rent (25% of Gross Salary) Taka of the Population of Dhaka City different expenses by a citizen
95,000 (Tax Exempted), living in Dhaka amount to Tk.
Medical Expenses (5% of Gross As per the empirical study 23,993 which is shown below:
Salary) Tk. 19,000 (Tax performed by Power and
Exempted) and Conveyance Participation Research Centre His/her taxable income tax
(5% of Gross Salary) Taka with support from UNDP, the calculation would be: Basic
19,000 (Tax Exempted) and average income of population Salary (60% of Gross Salary)
others Tk. 20,000. Net Taxable of Dhaka is Tk. 55,086. As per Taka 396,000 Approx., House
Income is Tk. 250,000. If the the above consumption pattern, Rent (25% of Gross Salary) Taka
citizen is a female/elder citizen on average a citizen would bear 165,000 (Tax Exempted),
his/her there will not be any tax the following expenses: Medical Expenses (5% of Gross
as his/her Taxable Income Salary) Tk. 33,000 (Tax
would fall below the minimum Now, considering the same VAT Exempted) and Conveyance
income required for Taxation. Rate mentioned in the above (5% of Gross Salary) Taka

ARTICLE
20,552.57 crore for import and

export tax. However, while the
actual collections were
17,030.25Crore, 22,911.90 Crore
and 18,925.91 Crore respectively.
Overall, in the period of
July-October 2017, revenue
target has fallen short by 11%. In
order to increase revenue
collection by government, it is
very important to understand
why the citizens Tax Morale is
low and hence, they are not
willing to pay Income Tax and
VAT properly.
Tax morale is defined as

Citizen’s motivation for paying
33,000 (Tax Exempted) and Return as of 28 November 2017
taxes. This process starts from
others Tk. 34,000. Net Taxable out of 3.1 Million people (1.90%
the deduction of salary tax and
Income is Tk. 430,000 (Here, of total population) who had
ends with filling return. Between
Investment Allowance which Taxpayer’s Identification
this, the citizen’s expectation for
would have been Tk. 16,125 (Tk. Number (The Daily Star, 2017).
regular rights from the
430,000*25*15%) is not Whereas only Grameenphone
government offices as they are
considered for simplification). Company has 65 Million
paying taxes (in form of Income
Hence, the maximum Tax for ( B a n g l a d e s h
Tax or VAT paid during
such income is Tk. 18,000. Telecommunication Regulatory
purchase). Therefore, if any
Again, his/her income tax would Commission, 2017) Subscribers
citizen is not happy with any
be 25% lower than the VAT who pays regular VAT at the
step of this process, s/he may
Amount paid by him/her during rate of 15% on the talk-time used
not be willing to pay tax. S/he
the year. by them which is 40% of the
might be looking for steps to
total population of Bangladesh.
avoid taxes such as not
From the above two scenarios, Therefore, if steps can be taken
registering as Taxpayer, taking
it is evident that a citizen of to motivate citizens in ensuring
salary in cash form, purchasing
Bangladesh contributes more to VAT payment while
goods and services from stores
national treasury in form of VAT procurement of services and
that are not registered for VAT
in comparison to the Income Goods, then the revenue
and others.
Tax and thus, if steps can be collection of the government
taken to ensure the payment of can be maximized.
As per survey “The Unheard
VAT, then the Government of
Voices: Citizen’s Perceptions on
Bangladesh would have access Challenges Faced by the State of Governance and
to more funds for national Government in Service Delivery in
developments. Collection of Taxes from Municipalities (Pourashavas)
Individuals and City Corporations in
Another reason for emphasizing
Bangladesh” performed by CPD
on collection of VAT by the For the period of July–October
(2013), major governmental
Government would be at 2017, revenue target was set at
services received by citizen of
present only 1.12 Million people Tk. 19,575 crore for income and
selected Pourashava and City
(0.67% of total population) of travel tax, Tk. 25,331.01 crore for
Corporations are:
Bangladesh Submitted Tax value added tax (VAT), and Tk.

The result of the survey is that in form of unplanned and action of causing an activity or
out of the Pourashava continuous load shedding, event to become political in
respondents only 40% of the unavailability of clean water for character) of Municipality and
citizens were satisfied with the performing daily chores of City Corporation affairs which
services received whereas only households, poor quality and resulted in services being
35% of the citizen of City never ending repair works for of offered to influential citizens
Corporation expressed their road structures, clogged and others were left in the dark.
satisfaction. drainage system, poor waste Finally, the attitudes of service
management, Insufficient providers were also responsible
Among the reasons behind such Anti-Mosquito Spraying, Higher for the dissatisfaction of the
dissatisfaction included poor Tax rates and others. citizens. The citizens are paying
services received by the citizens Furthermore, politicization (The direct and indirect taxes against

ARTICLE
citizens may change or in other

words, tax morale may get
diminished as the feeling of
unjust tax system may grow in
them.
Proposition for
improvement of
collection by
Government
Collection of revenue can be

increased either by increasing
rates of Value Added Taxes
applicable for purchasing of
goods and services or through
improvement in services and
opportunities provided by
Government to the individual
citizen. Increasing rates would
put more burden on individuals
for which the tendency of
which they are expecting exemption. However, for the list avoiding taxes and VAT may
certain services to be received. of expenditure the Citizens increase significantly. However,
Meanwhile, the Governmental don’t enjoy any benefit for improving services and
employees have overcome long which it seems as irrelevant opportunities is more likely
obstacles to reach present information in return increase Tax Morale of
position. As a result, there are submission. The longer the list individual citizens. Below are
certain expectation gap from of irrelevant requirements, the few suggestions on how to
each sides (Such as one part burdensome the return fill-up improve collection by
believing they are superior than process becomes. Government:
the other part) which is creating
a wall among the two for which Finally, when a business submits Social awareness program
interactions sometimes go out tax assessment, its tax burden is
of hand for which citizens have calculated basis on the The citizen of Bangladesh is
become dissatisfied. revenues it generated and very cautious about their rights
eligible expenses it made in an and obligations. This has been a
Furthermore, in addition to income year. As a result, the proven fact after the
reporting different sources of businesses are not paying taxes establishment of Consumer
income in the Return of Income on their expenses. However, for Right Protection Act, 2009. For
Tax, citizens of Bangladesh are an individual, even though a list example, only in the year
also required to prepare a of expenses made during the 2016-17, 6,140 cases have been
wealth statement and an income year has been made a filed in the Consumer Right
expenditure list. Now, from the necessity during the Protect Authority out of which
wealth statement, new assessment process, they are 5,804 cases have been solved
investments made during the not getting any benefit for the and Tk. 1,563,588 has been paid
year is calculated under certain expenses they have made to consumer against those
rules and regulations on which during the income year. Hence, complaints. The complaints
the investors enjoy 10%-15% tax the mindsets of the individual included higher price paid than

MRP, Issuance of Invoice services and thus the burden of 3.a.i, when a citizen is given 50%
without VAT, Fake VAT this taxation falls fully on their exemption for the amount of
Registration No. used and many shoulders. Since, the citizens are VAT Paid during purchases,
others which have helped not getting any benefit against his/her net benefit would be Tk.
Government officials in tracking this additional payment made to 7,000. However, in net Tk.
down illegal ways for Tax government employees, they 175,000 will be reported to
avoidance and penalize the may be interested in avoiding Government sources for these
offenders so that others don’t purchases from VAT registered transactions against which the
follow the steps. Similarly, if stores/shops/other facilities. In government is already getting
citizens can be motivated to order to create more awareness Tk. 13,865 against each citizen’s
ensure payment of VAT among the consumers/citizens, expenditure. Thus, even if the
(applicable) from each payment the National Board of Revenue profit margin is 20%, then
they make through social of Bangladesh may introduce additional Income of Tk. 35,000
awareness program, the fund tax exemption for VAT Paid by will be reported and additional
flow to Government’s Treasury Citizens during purchase. In this payment of Tk. 13,125 as Income
can be increased. way, purchases from VAT Tax from different sources (at
registered Shops/Retailers/ the rate of 37.5%). If the number
Provide Exemption for VAT other facilities would increase of citizens who complies with
Paid significantly. Even though the the new regulation goes up-to
citizens would get Tax 5,000,000 then Tk. 65,625
At present, individual citizens Exemptions, but as the Million additional revenue would
are getting tax exemption for purchases increases, the be generated. For example,
investing in share markets, retailers/shops/other facilities shown in Section 3.a.ii, when a
Deposit Pension Scheme and will have less opportunity to citizen is given 50% exemption
others for which they are very avoid giving VAT and tax on for the amount of VAT Paid
much interested for such their income since paper trail of during purchases, his/her net
investments. As already such purchases can be seen and benefit would be Tk. 12,000.
discussed, Value Added Tax is verified by government officials. However, in net Tk. 312,000 will
an additional tax which citizens be reported to Government
pay while purchasing goods and For example, shown in Section sources for these transactions

ARTICLE
able to identify errors and

mistakes in your bank
accounts which were
previously overlooked due
to non-tracking of
transactions. As a result, it
would be very difficult for
financial institutions to
deduct a charge twice or
temporarily withdraw funds
from someone’s account.
Conclusion
against which the government meeting our necessary Bangladesh is on the way to
is already getting Tk. 23,993 requirements. Now, the becoming a Middle Income
against each citizen’s proposed system would Country by the year 2021 &
expenditure. Thus, even if the provide the citizen to Developing Country by the year
profit margin is 20%, then identify the major primary 2024 for which the Government
additional Income of Tk. 62,400 expenses and would allow of Bangladesh is required to
will be reported and additional them to plan their budgets perform enormous expenditure
payment of Tk. 23,400 as accordingly. This way, in the upcoming days. However,
Income Tax from different excess expenditure in form as the revenue sources are
sources (at the rate of 37.5%). If of unnecessary shopping limited, the Government can
the number of citizens who may be avoided. either impose more taxation on
complies with the new individuals or increase tax
regulation goes up-to • Again, when someone has morale of the citizens for
5,000,000 then Tk. 117,000 identified his/her core betterment of the collection of
Million additional revenue would requirements, s/he will have Revenue. Increasing tax rates
be generated. the opportunity to save the may result in negative impact as
remaining funds in a savings Citizens would have less
Furthermore, similar to account or in any other after-tax income to spend
production of glycerin as form of savings instrument. which will also impact the
byproducts while producing For example, if someone businesses overall. Now, in
soaps, providing Tax Exemption has set a goal to save Tk. order to increase tax morale of
for VAT paid will provide the 5,000 per month then at the citizens the Government of
following benefits to the the end of the year he Bangladesh can provide
citizens: would have Tk. 60,000 different facilities to individuals
which he can invest in & improve performances of its
• In present modern years, Savings Account and earn employees. One of facilities
thanks to the availability of additional interest incomes. being proposed is allowing Tax
goods and services Exemption for the VAT paid by
marketing in all aspects of • Furthermore, it would allow individuals during purchases
our life, it has become very citizens to get rid of bad made in an income year. This
easy to get lured to buy expenditure habits. would create VAT-awareness
something which we don’t among the citizens and in turn
need at all. As a result, we • Finally, when you are reporting of income of retailers
may require taking keeping record of your and suppliers will increase
additional debts for expenditures, you will be significantly. If properly

monitored, then the benefit 3. Finance Division, Ministry of

from taxes applied to the Finance, Annual Financial
additional incomes from Statement (Achieve),
http://mof.portal.gov.bd/
retailers and suppliers would
site/page/bf32942f-9090-49b
surplus the benefit provided to 7-b4e3-7eb0e3f5c7b2
the citizens in form of Tax
Exemption. This policy along 4. The Daily Star (2017), Deadline
with other mechanism would for tax return submission ends
result in achieving the targeted t o d a y ,
http://www.thedailystar.net/
revenue of the Government of Net foreign
business/deadline-tax-return-s
Bangladesh which would help
us become a Middle Income
ubmission-ends-today-149845
0
investment in
Country by the year 2021. the Dhaka Stock
5. The New Age (2018), NBR’s
Reference revenue collections fall Tk Exchange
12,622cr short of target in H1, plummeted to
1. Centre for Policy Dialogue http://www.newagebd.net/arti
(2013), The Unheard Voices: cle/32667/nbrs-revenue-collec Tk. 940 million
Citizen’s Perceptions on the tions-fall-tk-12622cr-short-of-ta in the negative
State of Governance and rget-in-h1
Service Delivery in last month as
Municipalities (Pourashavas) 6. UNDP
Politics,
Bangladesh
Governance
(2016),
and
the unease
and City Corporations in
B a n g l a d e s h , middle Income Aspirations: among general
Reality and
http://cpd.org.bd/wp-content/
uploads/2013/10/Bhattacharya Challenges,http://www.bd.und investors over
-CPD-CMI.pdf p.org/content/bangladesh/en/ the politics and
home/library/democratic_gov
2. Dhaka Tribune (2018), ernance/politics--governance- liquidity crisis
Developing Bangladesh: A new and-middle-income-aspirations appear to have
i d e n t i t y , --reality-and-.html
https://www.dhakatribune.com caught on with
/bangladesh/2018/03/18/ their foreign
developing-bangladesh-new-id
entity-2/ counterparts as
well.
SOURCE
The Daily Star
4 March 2018
th

ARTICLE
Corporate Environmental Reporting

An Immanent Critique
Dewan Mahboob Hossain | 2Amirus Salat

1
A
bstract symbiotic relationship. On one
hand, business supplies the
The Authors are:
Accounting as a products and services that the
discipline is often criticised for society needs. Thus business
serving the capitalism and helps in improving the living
upholding the capitalistic spirit. standard of the people in the
Even in cases where social society. On the other hand, in
issues should be given more order to operate and survive,
importance than the capitalistic business organisations have to
spirit of maximising profit, depend on the resources of the
accounting serves for the society. Business collects its raw
capitalists. The issue of social materials and human resources
and environmental reporting is from the society. Business also
one of these cases. The critical sells its products and services to
perspective researchers believe the society and thus ensures its
that in case of social and survival. As it is the society that
environmental reporting, the gives the business the
1
Associate Professor
Department of Accounting & capitalists just try to manage permission to operate, business
Information Systems their impression by using some has to conduct its activities in a
University of Dhaka socially desirable words that do socially responsible manner. It is
not represent the actual facts. expected that the business will
The famous German sociologist contribute to the welfare of the
Karl Marx introduced a method society and do not harm the
called immanent critique that society in any manner. That is
attempts to analyse whether why, over the last few decades
the presented ideology of the the social and environmental
capitalists or any other impact of business activities has
dominant group differ from the remained a major concern for
reality. This article by analysing both the professionals and the
several prior research results researchers.
identifies that in case of
corporate environmental The issues like environmental
reporting there is a gap pollution and environment
between the presented conservation have become
ideology of the management burning questions these days. It
2
Associate Professor and the underlying reality. was found that our mother
Department of Accounting & earth is getting polluted
Information Systems
University of Dhaka
Keywords because of various human
activities. In search of
Socialism, Corporate development and prosperity,
environmental reporting, Karl human beings, in many ways,
Marx, Immanent Critique, are polluting the environment.
Capitalism. As a result, natural endowments
like air, water and land are
Introduction getting contaminated. One of
the major reasons of pollution is
Business organisations deal in a the massive industrialisation all
social setting. It is said that over the world. It is said that
business and society have a industries, during the time of the

production, are producing many wastages that companies are also preparing a separate
are harmful for the environment. They are sustainability report to highlight their
emitting gas in the air and throwing wastages in social and environmental performances.
the land and water. Thus industrial activities are In this way they try to exert their
creating harmful impact on the environment. accountability towards the society. These
reports are mostly narrative in nature
These days because of the several problems (that describing the environmentally and
are becoming clearly visible) arising from socially responsible activities of the
environmental pollution, several stakeholders (like companies.
shareholders, customers, governmental agencies,
labour unions and several environmental groups) Even after all these attempts from the
are becoming aware of the environmental issues. part of the companies, corporate social
and environmental reporting faced
enough criticism. Many researchers and
The conflict situation between social activists mention that these reports
are mere tools of impression
the dominating and the dominated management. Companies just want to
groups can be further explained maintain and safeguard their legitimacy
in the eyes of the stakeholders. Critics
by a recent phenomenon related to who comment from a critical perspective
climate change issues. Over the highlight that social and environmental
reporting is mainly done from a business
years because of the massive perspective and not from a normative
industrialisation in the capitalistic perspective. Thus these reports are
serving the purpose of the capitalists and
Western countries the temperature not of the stakeholders in general.
of the world has increased. Management tries to create an
impression in the stakeholders’ mind that
the company is serious about the
environmental issues. In reality the
In many cases, they are raising their voices also. In situation may be different. This can be
some cases, the activities of the business are considered as a social contradiction. It
getting criticised vehemently. As businesses gain creates a false unity between the
their legitimacy from the society, they are also presented ideology in the environmental
becoming concerned about this public awareness. report and the hidden reality.
That is why these days ‘Corporate Social and
Environmental Responsibility’ has become a This contradiction can be analysed
common catchphrase in the business world. through a method called immanent
Corporations around the world are performing critique that has its root in the work of the
various activities that represent their social and famous German philosopher, economist
environmental consciousness. and sociologist Karl Marx. This article is
based on this particular issue. In the next
In order to let the stakeholders, know about their section, the article introduces the theory
responsible environmental practices, companies of Karl Marx and the concept of
started to report on their activities in the various immanent critique. Then the article
corporate reports. Annual reports and web sites describes the Marxist perspective of
have become the most common media where environmental conservation. At the end,
companies disclose their environmentally the article, with the help of Marx’s
responsible activities. Recently many big immanent critique method attempts to

ARTICLE
they deal with symbols,

interactions, communication,
meanings and definitions
(Henslin, 2011: 28). The third
dominant theory is the conflict
theory and it highlights that in
the society there exists a
continuous conflict among the
groups over scarce resources
and the dominant group makes
the social arrangements to
exploit the dominated group.
The dominant group use
authority and power (Henslin,
2011).
The famous philosopher

Friedrich Hegel and Karl Marx
made an attempt to explain this
kind of situation where the
find out whether there exists a enough importance. presented ideology differs from
contradiction between the the underlying reality. This
words of corporate In general, there are three explanation method is called
environmental report and the dominant theories in sociology. immanent critique. Kamla and
underlying reality. The first one is the functional Rammal (2013) explained this
theory that shows how the method. According to them,
Marxism and Immanent different components/parts of ‘immanent critique method
Critique: An Introduction the society are expected to illuminates the contradiction
work in a coordinated manner in between ideology and reality by
Karl Marx (1818-1883) was a order to maintain the stability of highlighting inequalities and
German philosopher. He the society. Functional theorists injustices that result from the
produced most of his writings highlight that the society power of capital’ (Kamla and
jointly with his companion consists of several institutions. Rammal, 2013:913).
Friedrich Engels (1820-1895). In order to maintain the stability
They introduced a in the society, all these This method takes an attempt
socio-economic theory that is institutions should perform their to uncover the masked interest
now popularly known as tasks by maintaining proper of a group that provides with
Marxism (though in their coordination with each other. self-interest oriented (in a
writings they used the term Stability ensures the proper disguised manner) justification
‘communism’) (Barry, 1995). The operation of the society. The of their activities and words.
main goal of Marxism is to second one is the symbolic Immanent critique method tries
create a classless society based interactionism theory that to find out the hidden interest
on common ownership (Barry, explains the social interactions behind a particular view.
1995). Marxism is one of the in a micro level. The basic of this
most debatable as well as theory lies on the idea that Society, Nature and
popular philosophies that the society is mainly consisted of Marxism
world has ever seen. Even after interactions. The symbolic
hundred years from the death of interactionists focus on people’s People in this world, in many
Karl Marx, it is still studied with ‘pattern of behaviour’ and thus ways, are dependent on the

endowments of nature. Though highlighted the relationship of give rise to so many social
environmental pollution is not a human beings with nature. But problems. Especially
new phenomenon for Marx did not address the issue capitalism’s continuous urge for
humankind (as it existed even in of environmental degradation money making became
the ancient times), the issue got directly in his writings. Marx did detrimental for the
immense importance mainly not identify the ‘significance of environment. As a very
during last few decades. The ecological issues that have powerful group of the society,
major environment-polluting come to play such an important capitalists can even try to
human activities mainly started part of late twentieth century manipulate the activities of the
after the industrial revolution political and ethical discourse’ government and it may go
when heavy machineries and (Barry, 2007: 155). But Marx was against the natural environment.
equipment came into the a supporter of organic Thus general public can get
production process by agricultural techniques. Marx harmed. So, there is no doubt
replacing a good portion of wrote ‘at length about the that the capitalistic spirit of
manual labour. The changing benefits of spreading manure profit making can damage the
nature of economic activities on crop lands, even suggesting natural environment in many
was harming the natural that human waste from the city ways.
environment a lot. Though at be recycled as fertiliser rather
first the society mainly than polluting the rivers and That is why, the recent theorists
concentrated on the economic oceans’ (Hannigan, 1995: 9). are trying to interpret the
advantages of industrial Both Marx and Engels believed environmental crisis from the
revolution, later the issue of in the interrelationship of Marxist point of view that is
nature and its conservation humankind with nature. against capitalism. As a result,
started to get attention. new terms like ‘left biocentrism’
But the later theorists by using and ‘eco-feminism’ came into
But industrial revolution created the basic ideas of Marxian views the literature. The left
new problems for the society. on capitalism explained the bio-centrists find industrialism
The lifestyle of the people was recent environmental problems. as one of the main causes of
changing. Because of the mass In many ways, they highlighted environmental degradation.
production of different that capitalism and the role of This theory is a little bit different
products at a lower cost, the the states are jointly liable for from traditional Marxism
handmade products were losing the massive environmental because Marx was not against
the market. As a result, many degradation all over the world industrialism. That is why, the
people in the rural area had to (Hannigan, 1995). Hannigan new Marxist theorists are
close the business and migrate (1995: 9) comments that: demanding for a new
to the cities to work in the interpretation of Marxism:
industries. So, a labour class was “Both elected politicians and
created. Other than the bureaucratic administrators are “Marxism needs, therefore, to
changed lifestyle, because of depicted as being centrally become more fully ecological in
massive industrialisation and committed to propping up the realising its potential to speak
use of heavy machinery and interests of capitalist investors for nature as well as humanity.
fuel, the environment was and employers”. In practice, this means replacing
getting polluted. Huge capitalists with ecologically
migration to the cities made the Though Marx did not address sound/socialist production.”
cities overpopulated. This also the issue of environmentalism (Kovel, 2002: 10).
became a major reason for directly in his writing (for some,
environmental pollution. Marx failed to address this issue The conflict situation between
totally), he highlighted the issue the dominating and the
It was Karl Marx who first that capitalism will ultimately dominated groups can be

ARTICLE
directly address the issue of

environmental degradation and
environmental conservation, the
basic theory of Karl Marx (i.e.,
the issue of conflict and
exploitation) can be employed
in theorising the present
condition of environmental
degradation. Environment was
massively polluted because of
imprudent and greedy attitudes
of the human beings – more
specifically the capitalists.
An Immanent Critique of
Corporate
Environmental Reporting
further explained by a recent whole world will be suffering.
phenomenon related to climate That is why, in the year of 1997, This section attempts to
change issues. Over the years in Japan, the world leaders met conduct an immanent critique
because of the massive and proposed the Kyoto of the present situation of
industrialisation in the Protocol. This protocol aimed to corporate environmental
capitalistic Western countries reduce the greenhouse gas reporting on the basis of several
the temperature of the world emission to a certain level within prior research.
has increased. It happened a timeframe. The world leader
because of the extensive use of also proposed for the It can be seen from the previous
fuels. Burning of fuels creates compensation to the suffering discussion that one of the major
greenhouse gases that are countries as they are not causes of environmental
harmful for the humankind. responsible for this degradation is the industrial
When these greenhouse gases environmental degradation. The pollution. The capitalistic spirit
are emitted in the air, the world suffering nations are just the of high concentration on profit
temperature increases. As a victims of the activities of the makes the whole situation
result, the ice in the polar areas industrialised developed worse. It needs to be mentioned
gets melted and thus the sea countries. Though many of the here that performing
level rises. Because of this rise in countries ratified this protocol, environmental responsibility
the sea level, there is a chance industrially developed countries can be costly for the
that many low lands in the world the USA and Australia did not organisations. It may need a
will be submerged under water ratify the protocol. Later in good amount of investment in
in next few decades. Saline 2008, Australia ratified it. So, it the research and development
water will get mixed with can be said that the developed to introduce an environment-
drinking water and as a result countries are dominating and in friendly manufacturing process.
there will be a crisis of drinking order to uphold their interest Producing environment friendly
water. Moreover, the land will they might do something that product may also demand
also suffer from salinity and thus goes against the less powerful higher cost. The waste
the crop production will be developing and under management and treatment
hampered. It will lead to developed nations. plants are also expensive.
extreme food crisis. Because of Naturally, if the cost becomes
the massive industrialisation in In summary, it can be said that high, the profit will be less. In
the developed countries the though Marxism does not some cases, companies may

have to raise price of the companies generally captured and mobilized by

product in order to cope with communicate their corporations’ managers (as
the increased cost. Thus the environmental performances in society’s elite) to portray “false
competitive advantage of the several corporate reports like unity” between social
company might get reduced. annual reports and expectations and their negative
This may also result in less sustainability reports. In many social and environmental
profit. This is against the cases, researchers working from consequences”.
capitalistic spirit of profit the critical perspective have
making. mentioned that these reports Kamla and Rammal (2013)
are mainly serving the interests analysed the annual reports and
This situation creates a dilemma of the capitalists and thus these web sites of nineteen Islamic
for the capitalists. On one hand, reports are mainly prepared banks around the world and
they have this greed of profit form a business perspective found that rather than reporting
making and less concentration (Joseph, 2012; Kamla and on the issues highlighted in
of environmental responsibility Rammal, 2013). As accountants Shariah (Islamic laws), the social
may result in higher profit. On remain highly involved in the reports of Islamic banks are
the other hand, in this era of preparation of these reports, depicting the prevailing
high environmental awareness the discipline of accounting has capitalistic ideals. The similar
among the various also been criticised by the research results can be seen in
stakeholders, organisations critical perspective researchers. Maali, Casson and Napier
have to maintain their (2006). In this research it was
legitimacy by behaving in an Sikka (2013), by presenting found that in the corporate
environmentally responsible several historical evidences, social reporting practices of
manner. So, there is a chance showed how accounting and Islamic banks ‘social issues are
that managers will try to go for accountants play an important displaced by financial concerns,
a trade-off between profit role to uphold the interests of thereby replicating Western
motive and environmental the capitalists and thus the hegemonic practices’ (Rania
performance. society in general gets harmed. and Kamla, 2013: 932).
By giving emphasis on the
From a Marxian perspective it discourses like cost reduction Episten (2007) identified that
can be said that the managers and tax reduction, the though there is a growing
and the other stakeholders are accountants are contributing in awareness about the corporate
two different groups. Both of the inequitable distribution of social responsibility all over the
them have their own interests income and wealth. From this world, the factors like massive
related to the organisation. In a research evidence it can be competition, shareholders’
sense the management can be inferred that as performing wealth maximisation and short
considered as a more powerful social and environmental term accounting performance
group as they possess more reporting also involve costs, the measures are pressurising the
information about the capitalists may intend to management to emphasise the
organisation. In order to serve perform these activities to at a business perspective rather
their best interest, management lower extent and apply than social and environmental
can manipulate information and manipulation in reporting for perspectives. Again, the issue of
the less powerful group, i.e., the the sake of safeguarding capitalistic spirit of profit
other stakeholders may get legitimacy. Kamla and Rammal maximisation is highlighted
deprived of getting authentic (2013: 913) state that: here.
information.
“In critical accounting research, A similar comment was made
It is mentioned earlier that in corporate social reporting is by Ocler (2009). While
order to maintain legitimacy, often perceived as being

ARTICLE
guidelines like EMAS, ISO 14000

series, SA8000, AA1000, GRI
and the Copenhagen Charter
were compared with the criteria
of communicative validity
mentioned in the theory of
communicative actions
proposed by famous
contemporary philosopher
Hebermas (another critical
perspective thinker). The four
criteria of communicative
validity are: truth, sincerity,
understand ability and
appropriateness. The
researchers found that none of
these standards/guidelines
analysing the discourses on helps them to portray mentioned here covers all four
corporate social responsibility themselves as the ‘friends of the of these criteria. The
of the French companies, the environment’. researchers concluded that
author found that the reports on (Reynolds and Yuthas, 2008:
corporate social responsibility In general, while reporting on 62):
mainly subordinates the corporate social and
financial reports. When the issue environmental reporting, “...the models do not quite move
of the performance of the companies follow some to the level of ethical discourse
company is highlighted, guidelines given by some through which social progress
economic performance gets organisations. For example, might be achieved”.
more importance than the social Global Reporting Initiative (GRI)
performance. Ocler (2009: 181) is one of the non-profit So, it can be said that the
mentions that: “…economic organisations that has given several guidelines proposed by
factors were a prerequisite to guidelines for corporate social various organisations are also in
any interest in social and environmental reporting. a way focusing less on the
responsibility”. Joseph (2012) analysed these ethical perspectives that is
guidelines to find out whether important for the society. One
That is why there exists a these guidelines represents the reason for this can be that as
difference between the rhetoric disclosure of moral values or these organisations are
used in the corporate not. He commented that though dependent on the business
environmental reports and the the reporting guidelines organisations for the
reality. In most of the cases provided by GRI are good but acceptance of these guidelines,
scholars analysing from critical these guidelines also are they have to prepare these
perspective highlight that focusing more on the business guidelines in favour of these
corporate environmental perspectives rather than organisations. It has to be
reporting is mainly a tool for normative perspectives. remembered here that these
impression management. guidelines are only meant for
(Everett, 2004: 1066). The A similar finding was found in voluntary disclosure and these
languages used in the corporate the research of Reynolds and are not laws. So, organisations
social and environmental Yuthas (2008). In this research are not bound to follow these. If
reporting give the companies a different social and these disclosure requirements
social advantage. The language environmental reporting are not suitable for the

organisations, they will not voluntary in nature, Hannigan, J. (1995). Environmental

follow it. That is why these corporations are using these Sociology (2nd edition). London:
guideline setting organisations reports as tools of impression Routledge.
cannot include many things that management. These reports
Henslin, J. M. (2011). Social Problems
will not be accepted by the create a different idea and A Down to Earth Approach (10th
organisations. So, again, in a impression in the mind of the edition). Boston: Allyn & Bacon.
way, the intention of the readers that is far from reality.
capitalists survives. Moreover, the guidelines Joseph, G. (2012). Ambiguous but
prepared by several tethered: an accounting basis of
In summary it can be said that organisations for the voluntary sustainability reporting. Critical
Perspectives on Accounting, 23,
the research results and the social and environmental
93-106.
comments of the researchers disclosure are also not serving
presented in this section of the the real purpose. As a result, the Kamla, R. and Rammal, H. G. (2013).
article highlight that there is a various stakeholder groups are Social reporting by Islamic banks:
gap between the depiction of getting exploited by the does social justice matter?
reality in the annual reports and management. As these social Accounting, Auditing &
the facts. The presented words and environmental disclosures Accountability Journal, 26(6),
911-945.
differ from the reality. In fact, are not mandatory, different
these presentations fulfil the companies are reporting in
Kovel, J. (2002). The Enemy of
hidden interests of the different ways by safeguarding Nature: The End of Capitalism or the
capitalists. their interests. In order to get End of the World? Nova Scotia:
the authentic information from Fernwood Publishing Limited.
Conclusion the companies, laws should be
set and environmental audit Maali, B., Casson, P. and Napier, C.
This paper, by applying Karl should be made mandatory. (2006). Social Reporting by Islamic
Banks. ABACUS, 42(2), 266-289.
Marx’s immanent critique
method on the findings of References Ocler, R. (2009). Discourse analysis
several researches conclude that and corporate social responsibility:
management’s representation Barry, P. (1995). Beginning Theory
a qualitative approach. Society and
An Introduction to Literary and
of companies’ environmental Business Review, 4(3), 175-186.
Cultural Theory. Manchester:
performance do not efficiently Manchester University Press.
reflect the reality. Sikka, P. (2013). The hand of
accounting and accountancy firms
Environmental degradation has Barry, J. (2007). Environment and
in deepening income and wealth
become a major social problem Social Theory (2nd edition). New
inequalities and the economic crisis:
in last few decades. Massive York: Routledge.
some evidence. Critical
industrialisation and greedy Perspectives on Accounting, in
Episten, E. M. (2007). The ‘good
attitudes of the capitalists are company’, rhetoric or reality? http://dx.doi.org/10.106/j.cpa.2013.
responsible for this degradation. Corporate social responsibility and 02.003.
That is why the business business ethics REDUX. American
Tyson, L. (2006). Critical Theory
organisations should be forced Business Law Journal, 44(2),
207-222. Today A User Friendly Guide (2nd
to behave in an environmentally edition). New York: Routledge.
responsible manner. They must
Everett, J. (2004). Exploring (false)
also report on their dualism for environmental Vago, S. (2004). Social Change (5th
environmental performances in accounting praxis. Critical edition). New Jersey: Pearson
the corporate reports. But as Perspectives on Accounting, 15, Prentice Hall.
the corporate social and 1061-1084.
environmental reporting is

ARTICLE
Blockchain Technology and Bitcoin Currency

The Features and Potentiality
M S Siddiqui
T
he present advancement Bitcoin’s Blockchain.
of technology has
changed the financial United Commercial Bank Ltd in
sector rapidly and the century Bangladesh introduced Upay, a
old paper money is under digital payment system. Upay
challenge due to introduction of has been implemented to
digital money. The electronic promote cashless and universal
transfer of money through i.e. anytime-anywhere
credit / debit cards and some payments using mobile phones
other transaction platform like in Bangladesh. Customers can
PayPal are replacing the paper use Upay to make payments for
currency transactions. The goods/Services from
latest invasion of virtual physical/online merchants. S/he
currency (VC) is another step of can also make consumer,
replacing paper currency in corporate and government
local and overseas transactions. payments e.g. electric bill, gas
The Author is a The technology base of this soft bill, mobile recharge, money
Legal Economist money and with rapid spread of transfer, ticketing, loan
Internet-based commerce and repayment, inward remittance,
mobile technology facilitate the insurance premium, payment of
use of VC. salaries, social benefits etc.
The overseas media reported Bangladesh is under UN

that Bangladesh has decided to financed program. UN has
go for advanced technology announced the first five
and plans to work with a start-ups to receive investment
Zurich-based company to through its $9 million innovation
develop a system based on fund. Unicef, the UN’s children’s
Blockchain Technology (BCT) charity, will be giving seed
for public services. Blockchain funding to companies working
technology holds the potential to create affordable mobile
to reduce the time and cost connectivity, blockchain in
required to access public childhood development, data
services online, including collection in maternal care, and
financial services and digital technology to help improve
identification. A BCT focused literacy skills to some countries
on Fintech start-up in Australia including Bangladesh.
recently demonstrated their
remittance platform to a leading Blockchain is a safe and open
Bank in Bahrain. They have method to store data for
converted Bahrain Dinar to facilitates transaction of VC
Bangladesh Taka (BDT) and through maintaining records
transferred to a digital like a ledger. The process allows
cryptographic DTD wallet storing data in consecutive
account. The money has been blocks, like a chain, and the data
withdrawn as cash from Taka ownership is secured.
wallet. The platform called Blockchain, or distributed
PaySHATM digital commerce ledger technology, underpins
platform is integrated with many virtual currencies, but can

also be used within private, permissioned ledger When paper money was introduced
systems. The Harvard Business Review describes several centuries back, it took a long time
it as "an open, distributed ledger that can record to accept the true power of money and
transactions between two parties efficiently and how this can be utilized as a tool to help
in a verifiable and permanent way". people in sharing and trading their
resources among themselves. One of the
Blockchains are potentially suitable for the disadvantages of paper money is
recording of events, medical records, and other verifying the basis of its value. The way
records management activities, such as identity we know someone has money is
management, transaction processing, generally through a statement kept in a
documenting provenance, food traceability or bank ledger. But by now we know that
voting. There are opportunities for blockchain in information can be manipulated in those
land record management in our country. ledgers, making private transactions with
money or titles on an asset vulnerable to
frauds. As BCT is built on the concept of
The overseas media reported that sharing information across parties and
consensus during transactions, it saves
Bangladesh has decided to go on reconciliation cost between banks and
for advanced technology and plans prevents losses because of documentary
to work with a Zurich-based frauds.
company to develop a system based Blockchain technology can fulfil some of

on Blockchain Technology (BCT) the conditions are essential for a digital
payment platform for the poor. Such
for public services. Blockchain systems would be more inclusive and
technology holds the potential to useful than the mobile money platforms
that currently exist in emerging markets,
reduce the time and cost required to such as Kenya’s M-Pesa and Bangladesh’s
access public services online, bKash. M-Pesa is hugely popular in its
home market and has successfully linked
including financial services and many unbanked people to the formal
digital identification. economy, but it restricts users to sending
money to other M-Pesa users.
BCT is a highly secured distributed system and an

incorruptible digital ledger of economic
transactions that can be programmed to record
not just financial transactions but virtually
everything of value and Internet of things (IoT).
IoT is a system of interrelated computing devices,
mechanical and digital machines, objects, animals
or people that are provided with unique identifiers
and the ability to transfer data over a network
without requiring human-to-human or
human-to-computer interaction. Blockchain can
help to alleviate security concerns, enable third
party verification and avoid multiple inputs of the
same information across devices.

ARTICLE
The Bill & Melinda Gates Melinda Gates Foundation knowledge and technology of
Foundation only wants to foster thinks so, and it is modifying BCT. In a recent seminar
the creation of these systems, blockchain, which is essentially attended by Minister of ICT on
not operate or manage them. a secure, reliable digital the context a local company
These platforms must be record-keeping system, to bring developing software of
regulated so they will be the poor into the formal Blockchain for an overseas
accepted by governments and economy. A project from the Bill company. It has started
banks and can be monitored to & Melinda Gates Foundation developing artificial intelligence
prevent things like money aims to use distributed ledger and blockchain-based digital
laundering and terrorism technology to help the two investment platform for the
financing. At present two billion billion people worldwide who Dubai-based Smartcrowd. BCT
people worldwide don’t have lack bank accounts. provides tamper-evident
bank accounts and must recording of the linked
conduct their transactions in The initiative is part of the Gates transaction history in a
cash which can be difficult to Foundation’s Financial Services distributed network, and has the
manage and presents safety for the poor program potential to disrupt the financial
issues. Blockchain technology specifically, its Level One business applications. Sound
can provide banking services Project, which gives theoretical underpinnings of
through mobile phone and governments and central banks BCT such as fault-tolerant
other devices. a framework for creating distributed computing and
national digital payments consensus have been studied
Experts have opinion that systems that anyone can use, for the past two decades.
blockchain technology even those who live on a few
underlying the digital currency dollars a day. Bangladesh has huge potential
Bitcoin, give them access to in BCT as the country stepped
financial services. The Bill & Bangladesh also attains into the world of artificial

Bangladesh
showed stable
and qualitative
improvement in
major economic
indicators last
year, with
leading 40
intelligence (AI) technology. Recently Bangladesh authority
The question is un-answered has banned Bitcoin transaction countries in the
whether Bangladesh can adopt and reminded the user of Inclusive
Blockchain technology and possible violation of Foreign
whether the regulators are Exchange Regulation and
Development
ready to accept it. There are Anti-money laundering laws but Index (IDI) of the
opportunities for blockchain in the policy maker may think the International
land record management in our potential of the technology and
country. develop a customised
Monetary Fund
Blockchain technology for (IMF).
Bangladesh authority refused to non-bank poor people to bring
be connected through undersea them into formal economy
cable in 1990 and missed out on facilitating remittance and other
the internet and technological transactions. SOURCE
Dhaka Tribune
boom and thus fell behind many 23 January 2018
rd
other countries. The digital There is inconsistency of policy

Bangladesh initiative of present and action of government over
leadership created a better Blockchain technology and
atmosphere but the digital money - Bitcoin
management level is far behind transactions and, the law and
the expectation. Bangladesh is rule are also not favourable for
currently one of the few high technology financial
countries in the world that is yet transactions. The issue needs
to embrace this due attention to facilitate
e ffi c i e n c y - e n h a n c i n g development of BCT and
technology. facilitate remittance of many
from expatriates and small
e-commerce service exporters.

ARTICLE
Prospects and Challenges of

Financing through Capital Market
M. Shaifur Rahman Mazumdar FCA
A
bstract 221.42 billion which according to
IMF will rise to USD 322 billion
Bangladesh capital by the year 2021 creating
market started in the 1950s with enormous economic
the establishment of Dhaka opportunities. Bangladesh
Stock Exchange in 1954. It got offers the liberal FDI regime
the momentum after the allowing 100 percent foreign
establishment of Chittagong equity with unrestricted exit
Stock Exchange in 1995. The policy, remittance of royalty and
country had to wait a long time repatriation of equity and
to get a world standard dividend.
regulatory and IT structure.
Now it is ready to Bangladesh has made
accommodate the growing substantial progress in reducing
requirement of the economy. poverty. The country achieved
Financing from this sector is still the MDG 1 on halving poverty
The Author is a very insignificant in comparison five years ahead of time, with
Chartered Accountant and with the banking sector. The 20.5 million people rising from
a Fellow Member of the size and growth of the capital the poverty level during the
Institute of Chartered Accountants market do not match with the period 1991-2010 [2]. The capital
of Bangladesh-ICAB size of the economy as well as market of Bangladesh is also
with the growth of economic developing gradually but not at
indicators. This presentation par with the country’s economy.
would like to highlight the If we consider the strength of
potentials of the sector in the the economy, the capital market
economy and to identify the has huge untapped
challenges for ensuring a opportunities.
sustainable growth.
Objectives of the Study
Introduction
The general objectives of this
Bangladesh was one of the presentation are as follows:
largely agro-based developing
countries in the world. Since her a. Measure the current status
independence in 1971, of Bangladesh capital
agriculture has been the core market;
sector of Bangladesh economy,
which is still contributing b. Establish a comparison of
around 17 percent of the GDP the capital market viz a viz
and also providing employment strengths of the economy;
to 45 percent labor force.
Around 84 percent of the rural c. Identify the potentials of
people of the country depends Bangladesh capital market
on agriculture for their in the economy.
livelihood directly or indirectly
[1]. Over the years contribution d. Identify the challenges and
of the industrial sector in GDP obstacles for shaping the
has been increased. The size of capital market at the
the economy is currently USD desired level.

Scope of the Study Reduced Reliance on Debt Finance
The scope of the study is confined to analysis of Borrowing and their prescheduled
economic and capital market statistics of the compulsory debt servicing could be
country as well as the South Asian region. avoided if the company is listed.
Methodology of the Study Enhancement of Efficiency
This paper has been prepared based on The management of a public company
secondary data. Different research articles, must be accountable to their
reports of Bangladesh Securities and Exchange shareholders, which in turn play a role in
Commission, Bangladesh Bank, World Federation ensuring that the company operates in an
efficient manner. Shareholders will
benefit from the enhancement of the
Bangladesh has made substantial company's operational efficiency.
progress in reducing poverty. Outreach to investors for Future

The country achieved the MDG 1 on Finance Need
halving poverty five years ahead Once listed access to additional

of time, with 20.5 million people long-term capital is often easier. The
company can issue right shares or
rising from the poverty level during capitalize profit by issuing bonus shares.
the period 1991-2010. The capital Tax Benefit
market of Bangladesh is also
developing gradually but not at par If a company is listed it pays less tax. At
the current rate, listed companies pay
with the country’s economy. 10% less corporate tax than those who
are not listed.
of Exchanges, World Bank and web site of Increased Visibility

different Stock Exchanges are the major sources
of information for this paper. The company's name in the newspapers
and other media will also help marketing
Benefits of Financing Through Capital of company’s products and services. It
Market has been found that shareholders are
often loyal to their own company's brand.
The best way to raise fund for the company
Liquidity
In the era of free economy and democracy, stock
market provides an effective linkage between the Listing on the Exchange generally
large pool of investors and entrepreneurs. increases the liquidity of the listed
Investors on their free will want to take a risk and securities. Entrepreneurs may love to
invest directly in the project and like to possess a develop one project successfully, run it in
share of ownership and profit. a transparent way and then change into
cash it when needed for the sake of
developing another one.

ARTICLE
Prestige Exchange provides automated prospect of Bangladesh in

trading facilities since 1998 future. Bangladesh will be a 3rd
Being listed on the stock while the Central Depository fastest growing economy in the
exchange raises the prestige of Bangladesh Limited world in terms of GDP. In its
a company immeasurably. A (CDBL)–the only securities latest assessment,
listed company presents a depository of the country Pricewaterhouse Coopers
positive public image. This introduced its first electronic (PwC), estimated that
image plays an important role in book entry in 2004. Currently, Bangladesh would maintain
boosting the company's the Market Intermediaries very good average annual
credibility in local and foreign include – growth for the next 32 years (by
stakeholders. 2050) [3]. The growth in the
 250 members of DSE and economy will require the capital
Attract Foreign Investment 148 members of CSE market to grow. Prospects of
Bangladesh capital market in
Being a listed company can help  391 Depository participants some areas are discussed
attract foreign investment in the (DPs) below.
firm, opening up opportunities
for business expansion and  58 Registered Merchant The dominance of Banking
modernization. Banks sector
Capital Market in  30 Asset Management Fund raising through the capital

Bangladesh Companies market is very low and
insignificant in Bangladesh.
The capital market is the engine  13 Security Custodians Most of the funds are raised
of growth for an economy. It is through the banking sector. It is
known as a barometer of the  8 Credit Rating Companies evident from Table 1 that
economy. It acts as an banking sector consists 32.63%
intermediary between savers Although Bangladesh capital of total Free Float Market
and companies seeking market came into existence in Capitalization as on 28
additional financing for business early 1950, for the next 40 years December 2017 at CSE, which is
expansion. It boosts the it failed to generate much the highest among all sectors of
investment capacity for activity. Key market indicators the market. However, the
infrastructure and other remained very low relative to its banking system of Bangladesh
long-term projects needed to regional comparators. After is badly impacted by
secure bright and sustainable 2011, huge regulatory reforms non-performing loan (NPL). The
future and help support finance took place to shape the capital percentage of NPL to total
for new innovations and market a world standard outstanding loans in
start-ups companies. platform for capital Bangladesh was 9.6% in the
mobilization. Now the market is year 2016 [4]. The current
Bangladesh capital market ready with respect to structure of NPL now an
consists of the Dhaka Stock infrastructure and regulatory alarming stage. So, it is highly
Exchange (DSE) and the structure to take up the important to ensure space for
Chittagong Stock Exchange enhanced pressure of the the capital market as an
(CSE) which were incorporated growing economy. alternative and sustainable
in 1954 & 1995 respectively. The source of financing. This will
Bangladesh Securities and Prospects keep the money market as well
Exchange Commission (BSEC) as the economy as sound and
regulates activities of the Many analysts and observers stable.
bourses and their TREC holders. have high hopes for the growth

Table 1: Sector-wise Free Float Market Capital as on 28 December 2017 Lower Market Capitalization to
GDP
Free Float % of Free Float Market
Name of the Sector
Market Cap Cap to Total
(in BDT ml) Free Float Market Cap As shown in Table 2, the
BANK 411,506.44 32.63 contribution of Market
PHARMA N CHEMICAL 218,457.69 17.32 Capitalization to GDP in
ENERGY 100,505.73 7.97 Bangladesh is very low, which is
ENG N ELECTRICAL 73,492.41 5.83 lower than other regional
TELECOMMUNICATION 67,947.59 5.39 countries. It is also seen that out
LEASING N FINANCE 64,907.85 5.15
MISCELLANEOUS 58,138.87 4.61 of the countries mentioned in
TEXTILE N CLOTHING 52,663.61 4.18 the table, it was highest in
CEMENT 51,570.90 4.09 Malaysia and the lowest in
FOODS N ALLIED 38,064.92 3.02 Bangladesh.
LIFE INSURANCE 24,663.64 1.96
MUTUAL FUNDS 23,654.14 1.88 Less Listing
SERVICES N PROPERTY 23,352.34 1.85
GENERAL INSURANCE 19,162.73 1.52
LEATHR N FOOTWEAR 11,576.80 0.92 Number of listed companies in
CERAMIC 9,554.57 0.76 Bangladesh capital market is
ICT 7,169.31 0.57 less than other regional
PAPERS N PRINTING 2,332.57 0.18 countries. Only 9 companies
were listed in 2017, whereas
Table 2: Market Capitalization (% of GDP): the Year 2014-2017
listing of a good number of
Name of the Country 2014 2015 2016 2017 companies is a must for
Bangladesh 24.32 24.04 18.42 21.62 maintaining the present growth
India 79.61 69.90 72.75 86.34 in Bangladesh capital market.
Pakistan 30.20 28.46 27.13 28.25 Table 3 shows that number of
Srilanka 30.89 28.39 22.61 23.68 listed companies were highest
Thailand 97.53 109.98 101.32 110.33
Malaysia 168.65 137.61 139.11 142.24 in India and second lowest in
Source: Annual Reports of BSEC and Publication of BSEC for Unnoyan Mela 2018 Bangladesh after Srilanka. As
per the statistics of Registrar of
Table 3: Listed Domestic Companies (Numbers) Joint Stock Companies and
Firms(RJSC&F), around
At the end of
Name of the Country 150,000 companies are
the Year 2017
Bangladesh 301 registered with the RJSC&F.
India 5828 Out of which only 301
Pakistan 559 companies are listed.
Srilanka 296
Thailand 538
Very good return
Malaysia 903
Source: Web site of respective countries’ Stock Exchanges and World
Federation of Exchanges’ Data We have seen from Table 4 that
Return on Investment from
Table 4: Latest status of Capital market in Bangladesh Bangladesh Capital Market is
(Chart from CSCX data from 2013-2017)
much more than banking sector.
Index Closing Closing Value CSE Selective Categories Index
Year
Name Value Date (CSCX) increased by 39.06%
CSCX 2013 8,377 12/30/2013 from the year 2013 to 2017 and
CSCX 2014 9,058 12/30/2014 stood at 11,649 at the end of
CSCX 2015 8,572 12/31/2015
CSCX 2016 9,369 12/29/2016 2017 from 8,377 at the end of
CSCX 2017 11,649 12/28/2017 2013. It shows 39.06% gain in
% return in 2017 than 2013 39.06 2017 from 2013.

ARTICLE
independent Financial
Reporting Council (FRC). The
FRC will be entrusted to ensure
accountability and improve the
performance of the professional
accountants of Bangladesh. The
FRC will be the sole watchdog
to monitor the functions of
auditors and ensure
transparency and accountability
in accounting and auditing of
organizations including various
government, autonomous and
non-government institutions
[5].
Challenges
Major reforms took place in Public Issue Rules, 2015
recent times Bangladesh capital market is
New Public Issue Rules, 2015 now facing a number of
There were some major reforms ensures more disclosure and challenges in its development.
took place in recent times in the better price discovery process Some of them are highlighted
capital market of Bangladesh in the capital market. below.
which are mentioned below.
Corporate Governance Good quality companies not
Demutualization of Exchanges Guidelines (CGG) listing
Stock Exchanges of the country Revision of BSEC’s latest A great challenge for the capital
became Demutualized in 2013. Corporate Governance market in Bangladesh is to
Demutualization converted Guidelines is in process. This will enhance listing of more quality
stock exchanges “not for profit" enhance better transparency, companies. A large number of
organization to a “for profit” accountability, and efficiency in shares issued by companies
organization. It is a milestone the market as strong corporate from different sectors would
development in country’s governance has a positive help bring about a better
capital market, legally impact on investor decisions. It balance between demand and
separating management & will enhance investor supply and enable investors to
ownership and trading rights. confidence, increase the the pick and choose on the basis of
reliability of financial fundamentals rather than
Special Tribunal information, reduce information zooming on a limited number of
asymmetry, and thus will ensure existing shares, thus excessively
Bangladesh government the benefit of investors. inflating their prices and
established a special tribunal for creating conditions for an
speedy disposal of cases related Financial Reporting Act, 2015 eventual downslide.
to the capital market in early Furthermore, the adverse
2014 which is a significant The much-awaited Financial impact of manipulation by any
progress in boosting investors’ Reporting Act-2015 got passed errant market actor with
confidence. in the Parliament on September respect to a few shares would
6, 2015. The Act includes be minimized. In order to ensure
provisions for setting up an stability in the future, depth of

like bond, derivatives,

commodities etc. are also
traded through Exchange
platform at the contemporary
markets in other regions. But,
we are still behind in respect of
regulatory and policy framing.
Coordination among
Regulators
Coordination among the

different regulators and
policymakers in formulating
policy in the capital market is
lacking. It is highly important to
involve other regulators like
Bangladesh Bank, NBR, BIDA,
BEZA, BTRC etc. But still, it
remains a great obstacle.
the market needs to be Though many good and Recommendations
increased by bringing in more profitable state-owned
IPOs [6]. companies exist in the country, The study has suggested the
they are not coming to the following recommendations to
Foreign companies not listing capital market despite many make Bangladesh capital
efforts made so far. market sustainable:
Foreign companies in
Bangladesh are not interested Reluctance in Fair Disclosure Framing policies to attract
to be listed in the country’s and Presentation good companies
capital market. Moreover, as per Policies to be designed in such a
In the IPO process and during
existing BSEC notification and way so that good quality
the time of post listing, it is
other laws & acts of different companies can be attracted to
required to ensure fair
authorities including BTRC and enlist in the market. Policies to
disclosure and presentation of
BEPZA, foreign companies are be designed in the annual
financial activities. But it is
not required to be listed financial plan and also in five
observed that a mindset
mandatorily. The government years’ plan. Coordination among
prevails from the side of
should impose conditions for the different regulators and
entrepreneurs, whereby, they
mandatory listing requirement policymakers in formulating
feel shaky or reluctant in
based on profit margin or policy is a must in this respect.
ensuring such fair financial
annual turnover. However,
disclosures. This also creates a
BEPZA authorities can also New products and features
great hurdle in ensuring large
grant some extra incentives for
numbers of quality companies To make the Bangladesh capital
listing of EPZ companies.
to be listed. market vibrant and sustainable,
Good Govt. companies not the introduction of new
Diversification of products and
listing products and features is an
features
urgent need at the moment.
There are only a few numbers of Bangladesh capital market is Some advanced products can
government companies listed in mainly based on equity be designed and implemented
Bangladesh capital market. products. But other products at the earliest possible time. The

ARTICLE
from Loans Sanctioned against

Inadequate Collateral" dated 29
August 2017 by Bangladesh
Bank.
5. Financial Reporting Council to

be functional this year,
retrieved from
http://www.dhakatribune.com/
business/2016/09/19/financial-
reporting-council-functional-ye
ar/
6. Islam, M.A (2014), Bangladesh

Capital Market, (Paper
Presented at First BEF
Conference, Dhaka),
bond market, derivatives Clearing Corporation, ETF and Bangladesh Economists’
market, currency market and platform for Small and Medium Forum, June, 21-22.
commodity market to be Enterprises are in the pipeline.
7. Annual Report of Bangladesh
included in the platform of The inclusion of such Bank, 2013-2014.
Stock Exchange. institutions will bring the capital
market to a new level of 8. Annual Report of Bangladesh
Target based listing international standard. Bank, 2014-2015.
Moreover, the capital market of
To reduce the present dearth of Bangladesh could be an 9. Annual Report of Bangladesh
listed companies in the market, effective source of financing for Bank, 2015-2016.
immediate steps should be implementing sustainable
taken to increase the number of 10. Annual Report of Bangladesh
development goals. It can be Securities and Exchange
listed companies by listing at made sustainable and model Commission, 2013-2014.
least 50 to 100 companies market around the globe if the
within a very shortest possible challenges discussed in this 11. Annual Report of Bangladesh
time on target basis. paper can be handled efficiently Securities and Exchange
and effectively. Commission, 2014-2015.
Conclusion
12. Annual Report of Bangladesh
References
With the growing economy, the Securities and Exchange
capital market of Bangladesh is 1. Rahman, M.T. (2017) "Role of Commission, 2015-2016.
also growing at the same time. Agriculture in Bangladesh
Economy: Uncovering the 13. World Federation of
There are huge untapped Problems and Challenges", Exchanges’ Annual Statistical
opportunities in the capital IJBMI- Volume 6, Issue 7, Guide-2016.
market of Bangladesh. pp-36-46.
Currently, the market is only 14. Recent Registration Statistics
equity-based. There are 2. World Bank’s Overview on of Registrar of Joint Stock
opportunities to establish other Bangladesh, retrieved from Companies and Firms retrieved
http://www.worldbank.org/en/ fromhttp://www.roc.gov.bd/sit
products and services like
country/bangladesh/overview e/page/2f14b592-33c7-4931-b
derivatives market, 276-e16b0a9ded0d/Statistics-
commodities exchange, clearing 3. The World in 2050, Price water of-RJSC
corporation, development of house Coopers (PwC).
the bond market, Exchange
Traded Funds, etc. At present 4. Field Study Report of “Study on
establishment of National Credit Risk arising in the Banks

Yoon Model and Modified Jones Model in
Detecting Earnings Management
An Empirical Study on Cement Industry of Bangladesh
Mohammad Saif Uddin Bhuiyah | 2Mohammad Alam Shikdar | 3Sabina Yesmine

1
A
bstract existing & potential investors,
The Authors are: lenders and other stakeholders.
This paper aims to It’s the role of the managers to
investigate the earnings prepare the financial reports
management practices in the that reflects the true and fair
cement industry of Bangladesh. view of a firm. To do so
Utilizing the data (covering the managers often get the
period 2006-2016) from firms opportunity of flexibly choosing
operating under Bangladesh the accounting practices which
Cement Industry, the modified are allowed under the Generally
Jones, 1995 model and Yoon et Accepted Accounting Principles
al., 2006 model have been (GAAP). However, this
applied to estimate opportunity is often misused by
discretionary accruals and it some managers to achieve
1
Lecturer shows the presence of earnings certain private goals at the cost
Department of Accounting & management practices in the of other organizational
Information Systems cement industry. In addition, a stakeholders. This practice is
University of Dhaka comparison between the often referred to the earnings
models reveals that Yoon et al. management (EM). Davidson et
2006 model is better fitted than al. (1987) argues that EM is a
the modified Jones, 1995 model process of taking deliberate
for the cement industry of steps within the constraints of
Bangladesh though the strength GAAP to bring about a desired
of both models is low. As a level of reported earnings. EM is
result, the development of a taking advantages of the
new model or the revision of the flexibility allowed in accounting
models with inclusion of some framework to influence
other variables is suggested for management decision making
detecting earnings on future cash flows (Sankar &
management for the cement Subramanyan, 2001). Habib
2
Lecturer industry of Bangladesh. (2004) found that accrual
School of Business accounting is made mandatory
Britannia University Key Words by GAAP in recording and
reporting transactions and
Earnings Management (EM); events to portray the real
Modified Jones Model; Yoon financial situation of firms but
Model; Discretionary Accruals the inherent subjectivity of
(DA). accrual accounting allows
managers to manipulate
Introduction earnings figures. EM can be
within the GAAP- income
As stated in the conceptual smoothing to out of GAAP-
framework for financial financial misrepresentation. The
reporting (2010), the objective quality of reporting of a firm
of financial reporting is to truly depends upon the
3
Assistant Professor provide financial information practices of earnings
Department of Accounting & about the reporting entity that management.
Information Systems can make a difference in the
University of Dhaka decision to be made by the There is a tendency of the

ARTICLE
managers to make the best effort to maximize study aims to investigate earnings
their own benefits at the cost of other management practices. Different
stakeholders. Consequently, there happened earnings management detection models
several incidents of financial scandals in the last are found to be used in earnings
few decades which ranged from creative shaping management literature. Out of all, the
of financial results to fraud or misrepresentation modified Jones (1995) model and Yoon
including Xenon, Enron and WorldCom etc. (2006) models are considered to be
Accounting literature also reveals the evidence of more effective to find discretionary
the presence of earnings management practices accruals as a proxy of earnings
across industries. For example, Dechow et al. management. These two models have
(2000) found that corporate managers have been tested widely under the context of
incentives to avoid reported loss and thereby, developed countries. However, studies
found the Yoon (2006) Model to be
effective in countries like Bangladesh and
We all know that we have many Korea compared to the Modified Jones
(1995) model (Yoon et al,2006 and Islam
limitations while auditing the et al 2011). Our study uses these two
financial statements of a company. popular models to find the earnings
management practices in the Bangladesh
The methodologies that are cement industry and also the relative
prescribed as standards for the audit effectiveness. In Bangladesh, cement
industry is still an infant industry and it is
professionals hardly allow detecting growing rapidly. Bangladesh cement
intentional frauds and forgery that industry having the capacity – 20mn tons
(MT) is the 40th largest market in the
might be built into the financial world. 78% of the total capacity comes
statement under review. In fact, the from top 13 companies. The cement
industry is likely to maintain its current
respective legislation does not growth momentum and continue
necessarily wish auditors to unveil all growing at around 20% to 25% in the
these intentional fraudulent treatments medium to long term (Nahar, 2011). This
study will help us understanding the two
in the financial information! models’ fitness in cement industry as well
as the earnings management behavior in
the cement industry as a growing
industry.
management manipulates real activities to reduce
the annual reporting losses (Roychowdhury, Literature Review
2006). Again, Healy (1985) revealed that
companies manage earnings when they are close Earnings management (EM) has become
to dividends declaration. Another study finds that an area of interest for many researchers
managers utilize accrual components more than and analysts. Enormous studies have
cash components in managing earnings. Similarly, been conducted on this issue. Mulford &
Beneish (2001) suggests that managers are more Comiskey (2002) argues that EM is a
likely to control accrual component of earnings deliberate misrepresentation of earnings
compared to cash component of earnings. These for the purpose of showing an altered
conditions suggest the need for better view of earnings performance. While
understanding of earnings management by the Schipper (1989) argues that EM is a
users of financial statements. Accordingly, this purposeful intervention in the reporting

Yoon Model and Modified Jones Model in Detecting Earnings Management
Managers are more prone to use

accrual based techniques than
that of cash flow based.
Dechow et al. (1995) argues that
most of the EM studies centered
on the investigation of
accounting accruals precisely,
discretionary accruals. In EM,
nondiscretionary (expected)
accruals provide management
with little flexibility. Different
models have been developed to
detect earnings management
through segregation of
discretionary accruals and
non-discretionary accruals from
total accruals. Each model has
its own merits and demerits. EM
based on accrual accounting is
termed as ‘accrual- based
management’ and EM based on
real activity manipulation is
process for attaining some Financial statement fraud is an termed as ‘real-activity
private goals. outcome of whimsical attempt manipulation’. Real activities
of firms to deceive or mislead management happens due to
Obid and Demikha (2012: 54) the users of financial statements suboptimal decisions of
argue that the flexibility allowed (Rezaee, 2005, p.279). Mulford management based on timing
in GAAP contributes a lot to EM. and Comiskey (2002) found and volume of operations (Xu,
Healy & Wahlen (1999) argues several motives of earnings 2008; Gunny, 2010). This
that EM occurs due to the use of management namely the practice differs from
management judgments in intention to raise share price; manipulation by accruals,
financial reporting to influence lower the cost of capital and because it involves activities
the contractual outcomes that increase profit based bonuses related to the firm’s actual
are dependent upon financial and decrease taxes. Several business activities. It is difficult
results or to mislead some researches found different for external investors to
stakeholders of the firm managerial incentives for determine as to which decision
regarding the economic earnings management. DeFond is optimal or suboptimal
performance. Akers, Giacomino and Jiambalvo (1994) found that (Graham, Harvey, & Rajgopal,
& Bellovary (2007) also reveal firms manipulate earnings to 2005; Cohen, Dey, & Lys, 2008;
that fraudulent financial meet lending covenants. Watts Ge, 2010). Detecting
reporting is not only the result and Zimmerman (1986) suggest manipulation through real
of earnings management but that certain factors such as debt operating activities is more
also an outcome of accounting covenant constraints, profit difficult than detecting
standards. Islam et al, 2011 based compensation plan, manipulation based on
states that the choices of political factors, the need to accrual-based accounting
policies of corporate managers issue new shares, insider (Zang, 2012). This encourages
which are allowed by the GAAP trading, etc. provide managers some firms to structure
can influence reported earnings. with incentives to manipulate transactions in order to hit the
earnings. desired profit target (Graham,

ARTICLE
measurement error of
discretionary accruals when
discretion is applied over sale
revenue. However, studies
found that modified Jones
model (1995) provides powerful
evidences of earnings
management compared to
original Jones (1991) model.
However, most of the models
have been developed and
applied in developed economies
like the US, European countries,
and few other countries like
Malaysia, Taiwan and India etc.
And it cannot be guaranteed
that these models can be
Harvey, & Rajgopal, 2005). Shen detecting income management
applied in all the countries
et al (2005) revealed that techniques that are employed
irrespectively.
companies do earning to avoid detection by the
management to increase the external users of accounting
Several empirical research
level of earning by using information. Accruals not only
revealed that the Modified
discretionary accrual. While reflect the choice of accounting
Jones (1995) model is not
Roychowdhury (2006) methods but also the effect of
effective in detecting earnings
suggests that firms use multiple recognition timing for revenues
real earnings management tools and expenses, asset management in the context of
to avoid reporting annual losses write-downs and changes in Korea and Bangladesh (Yoon
via attaining certain financial accounting estimates (Du and Miller, 2002; Yoon et al.,
reporting benchmarks. Charme et al., 2000). 2006; Islam et al., 2011). In line,
Yoon et al. (2006) did some
Healy, Jones, Dechow and Yoon Several models of discretionary modification of the modified
used aggregate accruals model accruals have been developed Jones (1995) model and found
while Beneish (2001) used by different researchers like that modified model relatively
specific accruals model. Healy (1985) model, DeAngelo effective. Yoon model brings an
Although several types of (1986) model, Jones (1991) addition relating to discretions
accrual based models have model, Modified Jones (1995) commonly applied in retirement
been applied in different model and Yoon et al. (2006) benefits of managers and
research, some analyst and model. The most commonly depreciation and Islam et al.,
researchers put a question mark used discretionary model is (2011) assumed this model as a
regarding the usefulness of Jones (1991) model. Modified potential solution in the context
these accrual based models. Jones (1995) model can of Bangladesh.
Among the researchers Yoon et separate total accruals into
al., (2006) tried to find whether discretionary and non- Problem Statement
the firms’ managers use discretionary components. In
accruals - the difference 1995, Dechow, Sloan and In accounting literature several
between cash flow and Sweeney Modified the Jones models have been applied in
accounting earnings, to achieve (1991) model, and they replaced testing earnings management.
their targets. Accruals models the change in accounts The modified Jones (1995)
are preferred because this receivables in case of changes model is one of the widely
approach is capable of in revenue to decrease the applied models. Studies

revealed that the mentioned total accruals is an easy task non-discretionary accruals
model is effective in developed and by which the quality of (Independent Variables) and
countries (Dechow et al., 2005) earnings can be easily judged the discretionary accruals
and not that suitable for firms because firms can have high amount, where the
operating in Asian countries like accruals for legitimate reasons, discretionary accruals is the
Bangladesh (Yoon et al.2006; such as sales growth. However, error term ‘ε’. The greater
Islam et al. 2011). While some a more sophisticated proxy can (positive or negative) the error
other studies concluded that be created by decomposing terms the greater the evidence
Yoon et al. (2006) model which total accruals into discretionary of earnings management
is the extended modified Jones and non- discretionary accruals. practice.
model best fits Bangladeshi The non-discretionary
firms. However, it is evident that components reflect normal The popular discretionary
a model may fit a particular firm business conditions while accruals models include Healy
due to firm specification. As a discretionary accruals reflect (1985); DeAngelo (1986); Jones
result, we aim to apply both management choice. The result (1991); Dechow et al.; Modified
models in the sample industry of deriving discretionary Jones (1995); Guay, Kothari and
to identify EM practices and accruals from the total accrual watt (1996), Teoh et al. (1998)
accordingly, strive to suggest amount is a parameter that and Yoon (2006) model. The
the EM detection model which is reflects managements’ choice study of Dechow et al. (1995)
better for Bangladesh cement only. There exists no business the modified Jones Model,
industry. reason for such accruals. As a revealed that the model
result, the presence of provides the most powerful test
To the best of our knowledge discretionary accruals in firm’s in detecting earnings
there is no study so far that earnings is considered as a management compared to prior
utilizes Modified Jones (1995) proxy for earnings models. Study by Yoon et al.
model and Yoon et al. (2005) m a n a g e m e n t . (2006); Islam et al. (2011)
model using data from Non-discretionary accruals can suggest that the extended
Bangladesh cement industry. be easily identified while the modified Jones (2006) is better
Our study has been inspired by discretionary accruals are hard in Bangladeshi and Korean
this particular research gap. This to identify. Therefore, a perspective compared to
study contributes to the manager in general aims to Modified Jones (1995) model.
existing literature by suggesting apply discretionary accruals
the model that fits the firms technique for earnings Methodology
operating under cement management. Total accrual is
industry. In addition, this study calculated as: This study utilized the data of 7
offers some future research listed companies of cement
directions. Total Accruals (DV) = Non- industry of Bangladesh in both
Discretionary Accruals (IV) + Dhaka and Chittagong stock
Discretionary Accruals Discretionary Accruals (ε) (1) exchanges. A total of 64 firm
Model year data has been gathered
Where, Total Accruals t = from published financial
Managers can manage earnings Accounting Earnings t - Cash statements covering the period
by the choice of accounting flow from Operation t (CFO) 2006-2016. Any particular firm
methods which are often (2) year data has been excluded
allowed by the GAAP. from this study on the ground of
Management of accruals is In the above regression model, non-availability in forming the
concerned with the timing of discretionary accruals as such, independent variables of the
revenues and expense total accruals (Dependent two models. In this process, we
recognition. Determining the Variable) is regressed upon the formed time series data of at

ARTICLE
least 10 years for 5 companies, 7 TA i_ Total accrual for firm i = DA i=Discretionary Accruals for
years for one and 5 years for the Net accounting earnings – CFO. firm i
other. Multiple linear regressions
using SPSS have been DA i=Discretionary accruals for ΔREVi= Changes in revenue for
performed for the industry as a firm i firm i
whole under both Modified
Jones (1995) and Yoon (2006) LTA = Lagged total asset ΔRECi=Changes in receivable
models. Total accruals are for firm i
regressed upon some ΔREVi =Changes in revenue for
firm i REV i =Current year revenue;
explanatory variables to get
non-discretionary accruals. ∆ EXPi=_Production, selling and
Discretionary accruals are ΔRECi =Changes in receivable
for firm i administrative expenses
determined by subtracting non- excluding non- cash items.
discretionary accruals from
total accruals, as estimated in GPPE =Gross property, plant
DEPi =Depreciation expense
regression model. This leads to and equipment
an error term denoted by ‘ε’, is RETi =Retirement benefit
ε i_ error term = estimate of
the discretionary accrual, a expense
discretionary accruals
proxy for earnings
management. The greater the ε i _ error term = estimate of
The simplified form of equation
error terms the higher the discretionary accruals
(4), with the expressions Y=
possibility of earnings (TA/LTA); X1 =1/LTA; X2 = (Δ
management and vice- versa. The simplified form of equation
REVi- ΔRECi)/LTA and X3= (7), with the expressions Y=
(GPPE/LTA) where Y is the (TA/ REVi); X1 = (∆REVi– ∆
We applied the modified Jones
dependent variable and X123 RECi)/ REVi; X2 = (∆ EXPi – ∆
(1995) model and Yoon et al.,
are independent variables, is as PAYi) / REVi and X3= (DEPi +
(2006) model to analyze the
presented in equation (5). RETi) / REVi where Y is the
explanatory power of the two
competitive models and to dependent variable and X123
DA* = ε = [Y- {β0 + (β1* X1) + (β
make an estimate of the are independent variables, is as
2* X2) + (β3* X3)}] (5)
earnings management practice presented in equation (8).
in the cement industry of Yoon et al. (2006) model
DA**= ε = [Y- {β0 + (β1* X1) + (β
Bangladesh. equation is as follows:
2* X2) +(β3* X3)}] (8)
The original modified Jones TAi/REVi=β0+ β1(∆REVi– ∆
β0, β1, β2, β3 are estimated
model equation is as follows: RECi)/ REVi + β2 (∆ EXPi – ∆
parameters or regression
PAYi) / REVi + β3(DEPi + RETi)
coefficients.
TA i/LTA = β0+β1 (1/LTA) + β2 / REVi + εi (6)
(ΔREVi - ΔRECi)/LTA + β3
While the discretionary accrual Dependent and independent
(GPPE/LTA) + ε i. (3)
is computed through the variables of equation (3) and (6)
following equation: are divided by LTA and REVi
The discretionary accrual is
determined through the respectably to solve for the firm
following equation: DA i= ε = [(TA/ REVi) – {β0+β1 size effect. Modified Jones
(∆REVi– ∆RECi)/ REVi + β2 (∆ (1995) model holds that total
DA i= ε = [(TA/LTA) {β0+ (β1 EXPi – ∆PAYi) / REVi+ β3(DEPi accruals depends upon the cash
(1/LTA) + β2 (ΔREV - Δ + RETi) / REVi}] (7) revenue growth and changes in
REC)/LTA + β3 (GPPE/LTA)}] gross PPE. While, Yoon model
(4) TA i_ Total Accrual for firm i = posits the explanatory variables
Net accounting earnings – CFO to be cash revenue growth;

changes in cash expense; and The negative error terms are practice which is 56.89% of the
changes in some non-cash considered as income sample firm-year [Table 03].
expenses- depreciation and decreasing earnings
retirement benefits. management while the positive Table 03 shows comparison of
error terms are considered as Yoon et al., 2006 Model and
Study Findings income increasing discretionary Modified Jones, 1995 Model for
accruals. The major deviations individual firm. This analysis
In this study multiple from zero are suspected as the reveals that the Yoon et al.
regressions have been applied case of earnings management in 2006 model’s detection power
to determine the model fitness individual firm years. is higher in most of the
and the explanatory power of individual firm cases.
the two set of variables. The The two models have been
results show that the goodness demonstrated with firm year Intercompany model fitness
of fit of the Yoon et al., (2006) 2013 data of Aramit cement statistic as shown in Table 04
model is stronger than that of limited using the equation (5) revealed that, the Yoon et al.,
the Modified Jones (1995) and (8). 2006 model provides three
model. The Table 1 shows the R2 companies having R2 greater
for the modified Jones (1995) The equations in table 02 than 50% while Modified Jones,
model is 0.119 and for Yoon et al. produce error term (ε) 1995 have one such company.
(2006) model is 0.23. significantly different from zero
which is the indication of These results are consistent with
None of the variables in the earnings management for the the prior research conducted by
modified Jones (1995) model company in the sample firm Yoon and Miller (2002); Yoon et
proved to be significantly year. In this manner, earnings al., (2006) and Islam et al.,
explanatory at the 5% management practices have (2011). Yoon et al., 2006 model
significant level. However, two been found in 39 firm-years that is proved to be better than that
of the variables (X1 & X2) in the represents 67.24% of the of modified Jones, 1995 model.
Yoon et al. (2006) model are sample firm-year under Yoon et The inclusion of any significant
found to be significantly al. (2006) model. While the explanatory variable may
explanatory at 5% significance modified Jones (1995) model accelerate the explanatory
level. detected 33 cases of such power of these models.

ARTICLE
Table 01: Yoon Model and Modified Jones Model Summary.
Model Var. Un-standardized Standardized Coeff. t Stat F Stat Model R2

β β Sig. Sig.
Modified β0 .052 .141 1.495
Jones (1995) X1 β1 -40616.0 -.227 .099 -1.681 2.422 .076 .119
X2 β2 -.097 -.174 .186 -1.340
X3 β3 -.093 -.218 .109 -1.632
β0 -.007 .639 -.472
Yoon (2006) X1 β1 -.409 -.747 .000 -3.963 5.379 .003 .230
X2 β2 .298 .518 .011 2.634
X3 β3 .173 .031 .843 .199
Table 02: Demonstration of the models with empirical data

Modified Jones (1995) Model DA* = ε = [Y- {β0 + (β1* X1) + (β2* X2) + (β3* X3)}]
DA* = ε =[0.23-{.052+(-40616.0*.000)+(-.097*-.180)+(-.093* 0.05)}]
DA*= ε = 0.165
Yoon et al. (2006) model DA**= ε = [Y- {β0 + (β1* X1) + (β2* X2) +(β3* X3)}]
DA** = ε =[0.22-{ -.007+(-.409*0.07)+( .298*-0.33)+(.173* 0)}]
DA**=ε = 0.354
Table 03: Earnings management practice statistics for 2006-2016 study periods.
Name of Companies Yoon et al., 2006 Model Modified Jones, 1995 Model
Practiced Not Practiced Practiced Not Practiced
Aramit Cement Ltd. 8 1 5 4
Confidence Cement Ltd. 6 3 5 4
Heidelberg Cement bd Ltd. 6 4 7 3
Lafarge Surma Cement Ltd. 5 5 5 5
Meghna Cement Mills Ltd. 6 3 5 4
M I Cement Factories Ltd. 6 1 4 3
Premier Cement Mills Ltd. 2 2 2 2
Total Firm Year (FY) 39 FY 19 FY 33 FY 25 FY
Table 04: Company wise model fitness based on time- series data.
Name of Companies Yoon et al. 2006 Model Modified Jones, 1995 Model
R2 R2
Aramit Cement Ltd. .849 .325
Confidence Cement Ltd. .142 .045
Heidelberg Cement bd Ltd. .145 .138
Lafarge Surma Cement Ltd. .049 .496
Meghna Cement Mills Ltd. .240 .406
M I Cement Factories Ltd. .763 .461
Premier Cement Mills Ltd. .977 .850

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SOURCE
The Financial Express
3 Dec 2017
rd

Solar Energy
Silent Revolution in Power Sector of Bangladesh
Mohammad Zahid Hossain FCA
A
nation that destroys its development for all. Couple of
soils destroys itself. points is directly connected
Forests are the lungs of with the success of renewable
our land, purifying the air and energy. These are: Affordable
giving fresh strength to our and Clean Energy (GOAL No. 7)
people”. and Climate Action (GOAL No.
13) (Source: official website of
- Franklin Delano Roosevelt The United Nations).
(January 30, 1882 – April 12, Why Renewable Energy?

1945), the 32nd President of the
United States • Inexhaustible: Renewable
energy resources are
The legacy of using renewable replenished or replaced
resources in generating energy naturally. To be more
is of many centuries. Over 2000 precise, this alternative
The Author is a years ago, ancient people of power source is abundant
Chartered Accountant and China, India and Imperial Rome and will continue to remain
a Fellow Member of the built water wheels and so, even after using it
Institute of Chartered Accountants watermills to grind grain into constantly. It will never run
of Bangladesh-ICAB flour, and saw timber and stone. out in the future.
Today’s focus on renewable
energy is not taking us 2000 • Reduction of greenhouse
years back, rather it will pave a effect: Energy can be
way for us to keep this planet generated from wind, solar
livable for many more centuries. or water without using fossil
fuel. Sunlight, wind, water,
Renewable energy is generated biomass causes zero
from natural processes that is harmful emissions or toxins
continuously replenished i.e. in the environment. From
energy from a source that is not clean environment
depleted when used. There are perspective, renewable
five commonly used renewable energy is much preferred
energy sources: Biomass than fossil fuels because the
(includes wood and wood latter contribute a high
waste, municipal solid waste, percentage of air and water
landfill gas and biogas, ethanol, pollutants (e.g. carbon
biodiesel), hydropower, monoxide and carbon
geothermal, wind and solar. dioxide). Thereby, zero
emission of carbon from
In September 2015, the General renewable sources to the
Assembly of UN adopted the environment reduces the
2030 Agenda for Sustainable risk of greenhouse effect.
Development that includes 17 Acid rain created by the
Sustainable Development Goals emission of chemicals like
(SDGs). Building on the sulfur into the atmosphere,
principle of “leaving no one incidents of oil spills in rivers
behind”, the new Agenda and oceans have been on
emphasizes a holistic approach the rise.
to achieving sustainable

ARTICLE
• Public health: A study from the Clean Energy majority of gigawatts of new generating
and Climate Change Office of the U.S. capacity installed in 2015 –for the first
Environmental Protection Agency found that time ever. Contribution rate of renewable
Americans spend an estimated USD 361.7 to energy in 2015 was 53.6%, compared to
USD 886.5 billion each year on health for 49% in 2014 and 40.2% in 2013. The state
various deadly diseases including cancer, in northeastern Austria gets 63% of its
neurological problems, heart disease and electricity from hydroelectric power, 26%
more. Fossil fuels are identified as one of the from wind energy, 9% from biomass and
reasons of such diseases. According to the 2% from solar. A bill was passed in
World Health Organization (WHO), 3 million Argentina and according to that the
deaths every year as a result of exposure to country must generate 20% of its
ambient (outdoor) air pollution. electricity from wind, solar or small-scale
hydro power, among other energy
sources by 2020.
Renewable energy is generated Short supply of electricity has been
from natural processes that is considered as one of the major
continuously replenished i.e. impediments for the socioeconomic
development of Bangladesh. Taking
energy from a source that is not resource limitations into consideration,
depleted when used. There are five Bangladesh Government has given
emphasis on renewable energy over fossil
commonly used renewable energy fuel. IDCOL (Infrastructure Development
sources: Biomass (includes wood Company Limited) was established in
1997 and since then, it has been financing
and wood waste, municipal solid various projects in renewable energy
waste, landfill gas and biogas, sector. It is operating some successful
projects including solar home systems
ethanol, biodiesel), hydropower, (SHS), biogas and organic fertilizer, solar
geothermal, wind and solar. mini-grid projects, solar irrigation
program. The Sustainable & Renewable
Energy Development Authority (SREDA)
of Bangladesh has set a target to achieve
• Cost saving: Initial cost of construction and
about 2,337 MW of renewable energy by
set up may be bit higher, renewable energy
2020, which will ensure that the share of
can save money quicker than other sources of
renewable energy in the entire
power and energy.
generation mix is 10%. Under the Power
• Renewable energy reduces and eliminates the System Master Plan 2016, Bangladesh
risks of nuclear power aims to add 2 GW renewable energy
projects to achieve installed capacity of
Many developed and developing countries across 2,470 MW by 2021 and 3,864 MW by 2041
the world believe in the importance, strength and though the current production is only
sustainability of renewable energy. Developing 447.51MW. In order to fast track solar
world invested $156 billion in 2015, some 19% up projects, Bangladesh Government is
on 2014 and a remarkable 17 times the equivalent actively considering to set up a solar park
figure for 2004, of $9 billion. 2 Developed where power producing companies will
countries invested $130 billion in 2015, down 8% be allotted with necessary amount of
and their lowest tally since 2009. Renewable space.
energy excluding large hydro accounted for the

Solar Energy
Silent Revolution in Power Sector of Bangladesh
their requirement and will pay at

an affordable rate.
One of the critical reasons of

investment-draught in
Bangladesh is scarcity of power.
The lifeline of Bangladesh
socio-economy is textile. Cost
of power and energy is on the
rise particularly for this industry
due to the dependence on
diesel and gas driven
generators. This is making their
product’s price non-competitive
in global market. RMG
entrepreneurs are installing
solar panels at the rooftops of
their industrial undertaking to
meet part of their energy
demand and cut reliance on the
As of 2016, more than 6 million development of Bangladesh will national power grid. This is
SHS and kits were in operation remain as farfetched dream. reducing their cost of power by
worldwide, with 25 million at least 10%. Though installation
people benefiting from them. Around 45 percent of of solar PV panels requires
Bangladesh, the largest SHS Bangladesh’s work force is substantial amount of open
market worldwide, now has employed in agriculture, which space which is not obtainable
more than 4 million units represents an important sector everywhere, there are many
installed (source: Renewables in the country’s economy. Gap factories where more than 2MW
2017 Global Status Report). The between demand and supply of electricity can be produced
recent inauguration of a 3MW during irrigation season is a by utilizing the rooftop space.
solar power plant in Jamalpur, a common phenomenon for the Many large conglomerates
400KW photovoltaic power people of Bangladesh. already established solar power
plant in Sunamganj, and two Sometimes production of crops system at their factory premise
power plants in also suffers due to the to avoid interruption in power
Chapainawabganj with a inadequate supply of power. supply and reduce power cost
combined capacity of 325MW Bangladesh spends $900 in the product value chain. The
has opened a new chapter of million per year for 1 million tons government has finalized a
alternative energy in of diesel to power its irrigation net-energy metering guideline
Bangladesh. 400 families of to help the country’s household,
systems (source: The World
waterlogged areas of commercial or industrial
Bank). Hence, IDCOL has
Sunamganj is now getting consumers of grid-connected
targeted to finance 1500 solar
electricity which could have electricity use solar energy for
based irrigation pump by 2018
never been possible without power generation installing
to ensure uninterrupted supply
renewable energy. solar panels on their own roofs.
of power for crop production.
Approximately 60 million Net metering is a system of
people or 38 percent of the Both BOO (build-own-operate)
and BOOT (build-own-operate- recording both import from the
population in Bangladesh have national grid by consumers and
no access to electricity. Keeping transfer) project model are to
export from own solar-panels to
a large community in the “dark”, be applied. Farmers will buy
grid by them. This will indeed
the overall socioeconomic water for irrigation according to

ARTICLE
including The World Bank, ADB

and other donor agencies
should be approached to
assist in achieving the
target.
• Government support:
Government should come
forward with various policy
and fiscal support to use
renewable energy for
domestic as well as
commercial purposes.
Imposition of duty on
imported solar panels,
reduced tax rates for local
manufacturers, long-term
financing at affordable cost,
motivate the consumers to panels. There are subsidy, etc. can be
invest in the installation of solar complaints that the PV effective
system. panel quality is not up to the
• Skilled workforce,
mark to achieve satisfying
If GDP continues to grow at 6% innovative ideas and
performance. In absence of
average, then the aggregate advanced technology are
discouraging import duty
power demand is expected to key enablers to overcome
barrier, Bangladesh is
grow by 45% during 2020 and hurdles
currently importing almost
115% during 2025. It is expected all the solar panels which
Bangladesh just became eligible
that the aggregate power are low cost and
to go through the rigorous
demand will increase by around substandard. Instead of
process to qualify as a
200% (27,000 MW) during using high quality premium
developing country. Final nod
2030 [Source: Power System priced solar panels, most of
expected to be obtained after 6
Master Plan (PSMP)]. It is very the people are using cheap,
years’ subject to the consistent
unlikely that Government will be substandard brands and
performance. Again,
able to generate the target facing numerous troubles.
Bangladesh is also committed
amount of electricity using As a consequence, they are
to achieve 17 points of SDG
conventional fossil fuels. losing their interest in using
milestones. For both the
Moreover, the price of power solar energy. Bangladesh
ambitious targets, focus on
generated from fossil fuel is Govt. needs to motivate
renewable energy will be
continuously hiking and already local ethical entrepreneurs
worthwhile and inevitable.
reached at unmanageable level. to invest in producing solar
Though both Public and Private
panels to effectively
Challenges in Renewable sector need to work shoulder to
harness solar energy.
Energy Industry and way shoulder to achieve the
Forward milestones of renewable energy,
• Investment: USD 3-4 Billion
Government should come
is required to achieve the
• Substandard quality of forward to create a renewable
target of production 10% of
products: The solar energy energy friendly environment.
total power from renewable
sector is facing problems sources. Various
with substandard solar development partners

So You Aspire to be a CFO?
Muallem A Choudhury
Y
ou are a qualified • Strong interpersonal skills
chartered accountant
and have reasonable • Broad business background
experience and rightly deserve
to aspire for a CFO position. It is • Strategic vision
said that first deserve & then
desire, so your desire has to Other research has shown eight
match whether you deserve to key competencies amongst
be as CFO. There is no doubt those that separate strong
that The Chief Financial Officer financial executives from
is often the ultimate position for average ones:
a finance professional. The CFO
roles come up with • Results orientation
wide-ranging responsibility for
the overall business strategy • Managing performance
and performance. It is tough at
The Author is a the top and you need a lot more • Initiative
Chartered Accountant and than technical ability to be
a Fellow Member of the effective. Becoming a CFO is • Influencing others
Institute of Chartered Accountants not just about producing robust
of Bangladesh-ICAB financial information. It is also • Analytical thinking
about being able to
communicate clearly, having • Fostering teamwork
well-honed people,
management skills, business • Customer orientation
intellect and the ability to think
strategically. • Self esteem
The CFO position is one of the Not all finance professionals are
most challenging ones in any strategic thinkers. Rather only a
organisation. Increasingly seen select group will make the entry
as co-pilot, the CFO has in to CFO level. We should now
in-depth knowledge of the devolve in to what exactly are
business and provides the the skill requirements to make
financial framework for the my place atop the finance
business strategy. The CFO department as CFO.
translates business strategy into
results. The All Rounder
A survey by CEO Magazine in In any economic climate, a good
the US, asked 500 CEO’s about CFO has to be necessarily an
the qualities they regarded “all-rounder”. Many
most highly I a CFO. The result organizations when describing
identified 5 key traits: their ideal candidate for CFO
position list a number of key
• Financial expertise attributes. Besides the obvious
few like qualifications and
• Integrity and personality technical ability, commercial
awareness, ability to promptly

ARTICLE
think and act strategically are very important not the ability to work strategically, potential
to speak about the bare necessity an excellent candidates should take advantage of
communication skills. The CFO will be required to opportunities to work outside of
pro-actively analyze and draw conclusions from delivering numbers – particularly in areas
the Company’s business and financial results/he alike dealing with negotiation,
should also provide solid general business counsel restructuring, financial modelling, reaping
to the CEO and the executive management team. sources to raising finance particularly in a
tough economic climate, and mergers
For companies assessment of candidates is very and acquisitions. Obviously you must
crucial. The decision to hire is an investment have financial expertise and many
decision. Finding topnotch finance executive companies put emphasis on creativity in
requires a skilled evaluation of character to assess areas such as capital management where
identifying new sources of capital
funding with a continuous view on
As CFO you should consider the minimizing the overall cost of capital to
the organisation is a priority need.
board, particularly the Audit Renewed focus on risk management
Committee Chair, to be most provides a major opportunity for good
finance professionals to demonstrate
important relationship after the CEO. their worth to the organisation.
It is the fiduciary duty of CFO to Increasingly issues of VAT and tax are
also becoming important as in one hand
provide board directors with fact you need to be compliant and on the
based information about other hand you need to create a situation
where impact of VAT and tax are
management decisions, company manageable through instituting different
issues and challenges to fulfill their measures through tax planning sessions
to optimise profit using networks and
own oversight responsibilities. other external resources around.
Leadership and Influencing

whether an individual will fit in the culture and
values of the organisation. The ability to persuade, negotiate and
influence is of paramount importance. As
Career Plan
If you aspire to be a CFO you need to plot your

path to the top. CFOs are usually plucked from
group financial control, corporate developments,
divisional finance or risk and internal audit. Those
in group financial control are best poised for
reaching to be a CFO. Only candidates of
exceptional talent move up from a corporate
development background.
Commercial Awareness
Since companies hiring senior finance

professionals are looking for business nous and

So You Aspire to be a CFO?
another feature needed–

particularly as risk management
tools such as derivatives and
other hedging instruments
become even more complex.
A good technical manager who

can deliver messages clearly in a
manner understood by
non-finance people can go far
especially if they have an overall
knowledge about business
perspective and can contribute
to strategy in areas such as
marketing and Human
Resources.
Technical Competence
You also cannot ignore your
technical competence and the
need for a good understanding
more and more boards and skillful and diplomatic enough in of regulatory requirements. You
non-executive directors would carrying his objectives of may find as you begin to climb
possess finance backgrounds, performance, openness, the corporate ladder that
the CFO not only has to transparency without being technical ability seems to
understand the numbers but bullied by the board members. It become less important however
also possess ability to requires maturity, command in an increasingly demanding
communicate effectively. over his role with full and regulated corporate
Influencing skills are understanding on the board’s environment. Detailed
increasingly important and a role and CFO’s role. disclosure requirements mean
good CFO will be adept at that technical expertise cannot
enlisting others’ support for Communication be overlooked.
ideas, anticipating, reacting to
objections and planning As the importance of being a Investors Relations
strategies to overcome them. communicator cannot be
underestimated so you are to As CFO of a listed company,
Withering the Pressure invest time in developing your your role would be to maintain
presentation skills. Any serious relationship with different sets
In a local Company, candidate for CFO will have had of investors, invite them to your
pragmatically & professionally exposure to board meetings, office, give response to their
taking the pressure of the and will be experienced in queries and concerns in a way
Chairman of the board or making presentations to banks, by not divulging any specific
influential directors without shareholders, analysis and so information but be able to give
being bent under pressure is a on. Delivering the number is one a satisfactory answers so that
qualification for a prudent CFO. part of the equation. Then market take this positively. This
While performing his/her communicating with them also requires you to be aware of
responsibility a CFO needs to be internally and more particularly Security and Exchange
capable to withstand the to the investment community Commission’s directives as well
pressure and be articulate, and the external world is Stock Exchanges requirement.

ARTICLE
be found in every finance

professional. But recognizing
one having these features will
enormously enhance your
chances of climbing on to the
top.
At the end CFOs are made and

not born. How can you increase
your likelihood of becoming
one- and thus being the right
hand of CEO? Perhaps that’s
why Lawrence Stybel of Boston
based Stybel Peabody &
Associates, an executive search
firm, recommend that you begin
your quest for CFO-hood by
changing your own thought
process. “Start thinking like a
A Visible Senior responsibilities. In order to serve member of the board of
Professional the board, CFO needs to directors” he advises. “You’ve
cultivate a strong relationship proved you can think like an
CFO should be visible in the with board members, based on accountant. Most CEOs are
professional arena, attending two way communication and obsessed by what their boards
conferences and seminars, frank discussion of important are thinking. Come across as
delivering speech or becoming matters. With compliance and someone who knows what the
a core member of the regulatory issues continuing to board wants and the CEO will
professional association. CFO gain in importance and think you as one who is
should be able to prepare & complexity, CFOs need to confident.”
make presentations or lectures make their board confident that
on different commercial and financial reporting, So good luck to all aspirants!
economic topics and being controllership and accounting
respected by the community. matters are under control, and Related Resources
that they will be on top of any
Forging a Strong emerging issues to ensure that 1. Building Strong
Relationship with the board is not surprised. Relationships with Segment
Board CFOs: Charles Holley
Career Development
As CFO you should consider 2. What CFOs Want – and
the board, particularly the Audit Take advantage of career Need- From their CFOs:
Committee Chair, to be most development opportunities Charles Holley
important relationship after the both within organisation and
CEO. It is the fiduciary duty of beyond it. This will help you 3. Getting Strategy on
CFO to provide board directors develop management skills and Technology Spend- Charles
with fact based information hone your influencing Holley
about management decisions, techniques. The particular skills
company issues and challenges and behavioral qualities
to fulfill their own oversight required for CFO are those to

Intellectual Capital Disclosures
In Bangladeshi Ready-made Garments Sector
Status and Trends
1
Leena Afroz Mostofa Chowdhury | 2Sharmin Akter | 3Farhana Sultana ACA
A
bstract Modern-day businesses are
The Authors are: focusing more on intangibles i.e.
This paper explores knowledge management
company-wise intellectual moving away from traditional
capital disclosures (ICDs) to resource-based view of
provide an understanding of the dependence on physical assets
intellectual capital reporting highlighting organizational
(ICR) practices in Bangladeshi effectiveness outside
Ready-made garments (RMG) conventional financial results to
firms. It investigates the extent encompass sustainability
and qualitative characteristics (Boudreau and Ramstad, 2005).
of Intellectual Capital (IC) With the current shift of
disclosures made by listed RMG financial disclosures from being
firms. Data were collected tangible and quantitative to
1
Assistant Professor through a content analysis of intangible and qualitative
Department of Business the annual reports of 30 RMG (Sharma and Dharni, 2017),
Administration firms listed in Dhaka Stock emphasizing on the fact that
University of Asia Pacific knowledge management
Exchange (DSE) from 2015 to
2017. The content analysis was through intellectual capital (IC)
performed by IC categories and as a key to competitive edge to
dimensions. There are two main address the escalating gap
limitations specific to this study. between firms’ market and book
The study’s sample is limited value (Chen et al., 2005), the
due to its concentration on a financial reporting related to IC
particular industry. This study has gained the impetus in both
should not be treated as a business and academia from the
generalized scenario of IC last decade, notwithstanding
reporting in Bangladesh. The measurement difficulty in
paper sheds a light on the need explicit terms (Seetharaman et
for enhancing broad al., 2002). The hidden gap
2
Lecturer
Department of Business competencies of the RMG between firms’ market and book
Administration industry in managing, value is often denoted by
University of Asia Pacific measuring and reporting IC in intellectual capital efficiency,
Bangladesh and the impending which is reflected through the
response from the regulatory organizational knowledge,
body for ensuring consistency methodological know-how,
in IC reporting. technology, client associations
and expertise that have been
Keywords “formalized, captured and
leveraged” for value creation
Intellectual Capital, Bangladesh, (Davenport et al., 1998). As
Ready-made Garments, famously put forward by Peter
Financial Disclosures. Drucker, the things that cannot
be measured cannot be
Introduction managed and improved. As
Chartered Accountant and
3 financial reporting is a way by
an Associate Member of the The organizational performance which “a firm locates and
Institute of Chartered Accountants depends on effective and identifies itself within social and
of Bangladesh-ICAB efficient use of scare resources. political communities'' (Petty

ARTICLE
and Guthrie, 2000), financial reporting on IC turns slated to gain developing economy
out to be a means of measuring, managing and status by 2024 graduating from least
improving intangibles. Due to intensity of developed countries (LDCs) lists, with
intangibles in operation, a small number of 7.28% GDP growth rate predominantly
European firms, like Skandia, Ramboll, among explained by its RMG exports, as RMG
others, pioneered in reconstructing financial sector accounted for 28.1% to the total
reporting to include IC indicators in the early GDP in FY2016 (Akter, 2017). Thus this
1990s for appraising the contribution of IC to the empirical research on ICR practices in
corporate valuation (Petty and Guthrie, 2000; RMG sector and the enticements of the
Edvinsson and Malone, 1997; Sveiby, 1997). firms for IC reporting is timely and
Intellectual Capital reporting (ICR) helps firms to relevant.
achieve competitive advantage in the market with
Background of the Study
The market is characterized by Intellectual Capital And its Components
enormous competition from China, The term of “intellectual capital” (IC) was
Turkey, India and Vietnam and the conceptualized by John Kenneth
Galbraith in 1969. Ulrich (1998) regarded
EU being the largest export IC as “multiplicative function of
destination. Starting its journey in competencies and commitment”. In initial
works by Roos et al. (1997) IC was
the 1980s, RMG industry is the major categorized as human capital and
job creator accounting for 81% of organizational capital (Sharma and
Dharni, 2016); while Sveiby (1997), in
total export earnings of the country broader view, classified IC as market
and is regarded as the lifeline for assets, intellectual property assets,
human-centered assets and
Bangladesh economy to be infrastructure assets, internal
successful in the knowledge-based organization structures, external
global economy. organization structures and the human
resource competence (Sveiby, 1997).
Scholars, like Edvinsson and Melone
(1997), Johnson (1999), Pablos (2002)
lower cost of capital and stable stock price and Bontis (2003), among others,
(Garcia-Ayuso, 2002). However, most studies categorized IC as human capital,
evidenced that the IC reporting is more internal/structural capital and
concentrated in developed economies that have external/relational capital. This
long traditions of knowledge management classification of IC and its contents have
(Abhayawansa and Azim, 2014). Not many been defined by Johnson, 1999 as follows:
scholars have focused on the status of intellectual
capital reporting and its impact on industry Trends of Global Intellectual Capital
stakeholders in emerging economy Reporting
(Abhayawansa, and Azim, 2014). The IC
disclosures (ICDs) by the firms varies to a great The boundaries of the prevailing financial
extent (Sharma and Dharni, 2017). Addressing this reporting for capital markets and
gap in literature the present study examines the stakeholders, both internal and external,
voluntary reporting of IC by Bangladesh mandates incorporation of measuring
ready-made garments (RMG) firms. Bangladesh is and reporting on a firm's intellectual

Intellectual Capital Disclosures In Bangladeshi Ready-made Garments Sector
Status and Trends
Table 1: Components of IC (Johnson, 1999)
Human Capital (HC) Structural Capital (SC) Relational Capital (RC)

• Idea capital (the manpower for • Innovation capital (patents, • Firm's relationships with
knowledge-based duties and trademarks, copyright and customers, suppliers and
employee aptitudes and knowledge archives) online-community
attitudes) and • Cultural capital (organizational members
• Leadership capital (the internal relations) and
managerial qualities) • Process capital (work
procedures and trade secrets)
capital in annual reports to enormous economic value 2016) have been on the rise. In
improve the understanding of (Edvinsson and Malone, 1997). 1999, the international
the firm’s comprehensive value Human capital disclosures and symposium on IC was convened
chain to manage better the the affiliation with human by OECD in Amsterdam to shed
factors that create value resource management and light on IC reporting. MERITUM
(Sharma and Dharni, 2017; development spearheads Project, funded by European
Sveiby, 1997; Edvinsson and among other IC components in Commission, is the ongoing
Malone, 1997). Finding its roots financial reporting in developed research on IC in Europe for
in the developed knowledge countries (Roslender, 1997; recognizing European best
intensive economies in the Petty and Guthrie, 2000) practices in quantifying
1990s, the financial reporting on followed by structural capital intangibles; evidencing
IC can be traced in the reports and relational capital (Razak corporate practices, assessing
of Skandia, Ramboll and Dow and Tobiagi, 2016). the applicability of IC through
Chemical back in 1994, with Contemporary literature capital market data analysis;
Dow Chemical preparing and evidences that IC disclosures and recommend guidelines for
publishing a conceptual related to strategy and the IC measurement and
framework for IC measurement processes (Meca et al., 2005); reporting. The Institute of
and reporting (Petty and human resource, clients, and Chartered Accountants in
Guthrie, 2000). Current trend in technology (Holmen, 2011); England and Wales (ICAEW),
financial reporting witnessed a copyright, business culture, has recognized, in its 2007
progress towards measuring brand image, and corporate report, the significance of
and reporting IC that create partnership (Sharma and Kaur, effective IC reporting to the
effective operations of
investment markets through its
Information for Better Markets
campaign.
Several of the pioneering

empirical academic research
studies that attempted to
explore trends of IC reporting in
the corporate world are as
follows:
The aforementioned studies

established the rising trend in
ICR to provide a true,
sustainable information about

ARTICLE
Table 2: Contemporary Research on IC reporting and disclosures
Research
Author Origin Research Findings/ Significance
Brennan (1999) Ireland The study pioneered international comparative study of ICDs in
annual reports
Bassi and McMurrer USA The capital market seeks to incorporate ICDs into the market price
(1999) of the firm.
Guthrie and Petty Australia The study assessed how IC indicators are disclosed in the annual
(2000) reports in narrative, numerical, or quantified value form.
Bukh, Larsen, Denmark The study reveals motivation and process of ICR.
Mouritsen, (2001)
Bontis (2003) Canada ICDs continued to be excluded from Canadian corporate annual reports.
Boudreau and Ramstad USA ICD and social accountability for human capital will enable firms
(2005) adopting a decision science that helps them better understand and
articulate the connections between human capital and sustainable
results.
Abeysekera and Sri Lanka The most reported ICDs was on human capital.
Guthrie (2005)
Ensslin and De Brazil The study found high level of voluntary ICDs in qualitative
Carvalho (2007) (narrative) terms.
Abeysekera (2007) Sri Lanka and ICR differences can be attributed to economic, social and political
Australia factors. The paper highlights the necessity for a global uniform ICR
definition and a reporting framework that fosters comparability and
consistency.
Kamath (2008) India The results find significantly small extent of ICDs in Indian firms with
IT firms disclosing more than any other sectors.
Khan and Ali (2010) Bangladesh Bangladeshi commercial banks are not currently keen on voluntary
disclosure activity. Disclosures are focused on human capital.
Singh and Kansal (2011) India ICDs are low, narrative and varying significantly among companies
with brands and business collaborations being most disclosed component.
Nurunnabi et al. (2011) Bangladesh Size and industry are important attributes to explain the ICD issues
in Bangladesh.
Wagiciengo and Belal South Africa ICDs have increased over the 5 years study period with certain firms
(2012) reporting substantially.
Ragini (2012) India, the US Leading companies had shown a significant improvement in IC
and Japan reporting.
Abhayawansa and Bangladesh The study found that stakeholder relationships, and legitimacy and
Azim (2014) impression management motivates the management’s desire to
disclose IC with inconsistent ICD that varied among companies.
Birari (2015) India Cross industry comparison revealed IT firms discloses IC more precisely.
Jayasooriya et al., Sri Lanka The banking industry was more involved in reporting the intellectual
(2015) capital information in the annual reports.
Razak and Tobiagi, Saudi Arabia Intellectual capital mostly was disclosed in discursive form and
(2016) throughout the annual report.
Ibadin (2016) Nigeria Leverage, firm age, foreign affiliation and size of auditing firm was
positively and significantly related to ICD.
Sharma and Dharni (2017) India ICDs tend to increase with firm size.
Slack and Munz (2017) The UK The prevalence and qualitative focus of ICDs reflects the importance
of respective IC components in corporate value creation.

Status and Trends
the firm’s operation and value Europe by Godyn (2013), knowledge-based global
creation crucial to compete in among others; as firms can economy. As a frontier market,
the knowledge driven economy. shrink cost of capital by foreign investors are interested
reducing information in IC disclosures in the industry.
Motivations for Intellectual asymmetry with functional IC Although there has been
Capital Reporting reporting (Abhayawansa, and plethora of studies on ICR in
Azim, 2014). Vergauwen et al. developed nations, the studies
The intellectual capital (2007) observed a significant in Bangladesh confined to ICDs
reporting may be stimulated by relations of ICDs with other in knowledge-intensive banking
statutory requirements by financial and non-financial and pharmaceutical sectors (Ali
regulators or voluntary variables and the level of et al., 2008; Khan and Ali, 2010;
disclosures by the firms. Kang importance of intangible assets Abhayawansa and Azim, 2014).
and Gray (2011) found majority in the firm’s operation. The RMG industry has huge
of companies doing voluntary prospect of attaining IC
disclosure of IC information. The Aims of the Study efficiency through introduction
literature manifests that the of modern technology, proper
statutory requirements of IC A central motivation for working environment, improved
disclosures are hardly enforced exploring IC reporting practices organizational structure and
in most countries, which have of Bangladeshi RMG firms is to human resource training to gain
forced the statutory IC contribute to empirical competitive advantage in this
disclosures to be negligible. understanding among labor-intensive sector. Thus the
Motivation for organizations for regulatory bodies, firm owners RMG industry serves as a
IC disclosures encompasses and practitioners in order to perfect territory to examine the
aligning intangible assets to improve the transparency of IC disclosures and create
strategy (Kumar, 2005), the firm’s value drivers in financial awareness among stakeholders
degree of leverage, adoption of reporting of Bangladesh. for improved ICDs for the
IFRS/US GAAP, industry type Several reasons underpin the industry’s relevance to the
and price to book ratio; attention on the IC disclosure nation.
providing access to broader practices of the Bangladeshi
perspective of the firm’s RMG sector. Termed as the The Research Design
operation to the stakeholders second fastest growing major
(Sharma and Dharni, 2017); economy of 2016 by the IMF, The study analyzed secondary
elevating relevance in equity Bangladesh consolidated its data from the annual reports of
markets (Kim and Taylor, 2012); position as in being the second the RMG firms listed on the
and lowering cost of capital and largest garments exporter Dhaka Stock Exchange for the
stock price volatility globally with 4.5% of the global year 2015-17. The representative
(Garcia-Ayuso, 2002) through export (Hossain, 2013). The sample was confined to 30
information symmetry. In a market is characterized by firms, as some firms were
review of IC accounting enormous competition from excluded for difficulty in
research published over the China, Turkey, India and attaining information (see
past decade, the significant Vietnam and the EU being the Appendix). According to the
impact of IC on market largest export destination. web site of the Dhaka Stock
performance of the firms was Starting its journey in the 1980s, Exchange, 50 RMG firms were
established through the studies RMG industry is the major job categorized as listed in 2017.
on Arab region by Dzenopoljac creator accounting for 81% of
et al., (2017); India by Ghosh and total export earnings of the The data, related to three
Maji (2015); ASEAN countries by country and is regarded as the intellectual capital dimensions,
Nimtrakoon (2015); Malaysia by lifeline for Bangladesh economy i.e. human capital (8 indicators),
Mehri et al. (2013); Eastern to be successful in the relational capital (10 indicators)

ARTICLE
pertaining all IC subcategories

were presented within the
annual reports of the
Bangladeshi RMG firms. The
mandatory reporting
subcomponents in human
capital related to salaries and
wages and structural capital
related with corporate
governance were the most cited
IC information going by the
frequency (%). These corporate
governance disclosures for
corporate culture and
organizational process are
directed under
SEC/CMRRCD/2006-158/134/A
dmin/44 to deliver
transparency for reporting on
and structural capital (14 5. News-tenor (i.e. positive, corporate governance
indicators) were obtained. The neutral and negative). practices. The level of disparity
study adopted an amended in IC disclosure reaffirms the
version of the ICD content Content analysis is an lack of commitment for IC
analysis by Abhayawansa (2011) appropriate research technique disclosures within the
and Abhayawansa and Azim for making appropriate Bangladeshi RMG industry,
(2014) in annual reports. IC inferences from the data in evident in developing countries
disclosures were segmented required context (Abhayawansa and in certain industries
four qualitative dimensions of IC and Azim, 2014). For collecting (Abeysekera and Azim, 2014; Ali
disclosure for trend analysis: the data, a list of keywords was et al., 2008). Disclosures related
prepared and these keywords to industry relations stood out
1. Broad IC categories were searched in the annual as the most disclosed voluntary
(human, structural and reports of the companies. The information. ICDs are mostly
relational capital); researchers provided input from done using descriptive terms
the annual reports in the sample with 79% of total presentation
2. Placing of IC information using a coding instrument, (see Table 3, Figure 3).
(i.e. director’s report, notes, which had been adapted for this Monetary disclosures mainly
chairman’s statement, study and then analyzed in depicted human capital related
vision and mission and terms of a number of information with visual
others); subcategories within four broad presentation, illustrating
categories and noted the company image and reputation,
3. Format (i.e. monetary, number keyword appears in a financial relations and
numerical (other), particular annual report. expenditures. The similar study
descriptive and visual); in the UK by ICAEW established
Findings and Analysis that the complexity of IC can be
4. Time-orientation (i.e. most effectively communicated
forward-looking, The overall research outcome in descriptive formats rather
non-time-specific and reported in Table 3 and Figure than attempting to measure
past-oriented); 1-3 indicate that disclosures them in monetary terms.

Status and Trends
Table 3: Disclosure Frequency and Format
Frequency % of Frequency Descriptive Monetary Visual

Relational Capital
Business collaboration 31 34.44% 31
Customer integration 64 71.11% 64
Supplier integration 71 78.89% 71
Brand 33 36.67% 30 0 3
Market shares 47 52.22% 43 4
Regulatory relations 79 87.78% 79
Online sales 0 0.00%
Customer turnover 12 13.33% 12
Industrial relations 90 100% 90
Financial relation 54 60.00% 15 36 3
Human Capital
Training cost 24 26.67% 7 17
Salary and wages 90 100.00% 9 90 1
Bonus and Incentives 65 72.22% 9 56
Sales per employee 47 52.22% 18 29
Skills and experience 64 71.11% 64
Employee satisfaction 0 0% 0
Management team 71 78.89% 71
Academic education 58 64.44% 58
Structural Capital
Research and development 45 50.00% 36 3 6
Technology 37 41.11% 34 3
Product development 35 38.89% 32 3
Licenses 0 0.00% 0
Trademarks 0 0.00% 0
Patents 0 0.00% 0
Copyright 0 0.00% 0
Intellectual property 14 15.56% 5 9
Good will 1 1.11% 0 1
Corporate governance 90 100.00% 90
Corporate culture 90 100.00% 90
Strategy 80 88.89% 80
Management processes 50 55.56% 50
Information technology 37 41.11% 34 3

ARTICLE

Status and Trends
by Khan and Ali (2011).

International buyers had
demanded a gradual
incorporation of workplace
safety in RMG industry, after the
violation of rights of workers
was reported in the tragedy of
Rana Plaza. IC disclosures that
include improvement of
structural capital can restore
buyers’ confidence and help to
incorporate IC into company
strategy ensuring long-term
success for the industry.
In agreement with the previous pertaining to the company and Conclusion and
study by Abhayawansa and its operations accounted for Implications
Azim (2014) on Bangladeshi 39% of the total IC disclosures.
Pharmaceutical sector, RMG Evident in the studies of other In the new aged global market
industry also disclosed IC emerging countries like India the corporations have
information with nominal (Sharma and Dharni, 2017) and witnessed a substantial upsurge
variation in the extent of Srilanka (Abeysekera, 2008), IC in the significance of intangible
disclosures related to the three disclosures are not presented in intellectual capital as drivers of
main IC categories (Figure 1). an organized separate section business success. The credibility
Validating the Indian study by within a consistent framework. of the traditional financial
Singh and Kansal (2011), This finding calls for reporting through the annual
relational capital is the most development in expertise for IC report are creasing its relevance
cited category (35%) in annual reporting in Bangladeshi significantly in communicating
reports compared to structural corporate reporting framework new and complex information
capital (33%) and human capital consistent with the study by about IC value drivers. The RMG
(32%). Current global Abhayawansa and Azim (2014). sector is attracting the attention
competition simulates the need of foreign investors and
to focus more on Figure 5 implies the lack of retailers, which necessitates
stakeholders-related forward-looking IC information, more precise IC disclosures.
dimensions, such as industry which undermines the desires of Decision usefulness theories
relations and regulatory investors. The human capital elucidate the information needs
compliance. disclosures are mostly based on of investors in perceived
historical cost. The strategic company valuation, forecasting
The placement of IC information direction in the Chairman’s companies’ earnings and risk
in financial reporting signifies statement mostly contain future appraisal. The firms should
the material importance oriented IC disclosures. address this value relevance by
attached to disclosures Financial reporting in reducing information
(Abhayawansa and Azim, 2014). Bangladesh only focuses on asymmetry. Nonetheless, the
The majority of IC disclosures level of utilization of physical Bangladeshi RMG sector owners
(43%) were presented in the assets in generating returns are reluctant to disclose
“other” section, specifically in with lack of enthusiasm for information about proprietary
the front and the notes sections. voluntary IC disclosure activity information as mostly the firms
The directors’ report that consistent with previous work lacks strict corporate structure
incorporates information (run by a family). They fear of

ARTICLE
losing business, as the firm’s Apparel & Fashion Industry. Boudreau, J. W., & Ramstad, P. M.
competitors may be benefitted Available at: (2005). Talentship, talent
by these voluntary information http://www.RMGtoday.com.bd/ove segmentation, and sustainability: A
rview-bangladesh-apparel-2016/ new HR decision science paradigm
(Dye, 1985). ICAEW recognized
[Accessed 16 Jan. 2018]. for a new strategy definition. Human
the potential inconsistencies Resource Management, 44(2),
among IC reporting for their Bassi, L.J. and McMurrer, D.P. (1999), 129-136.
voluntary nature resulting in ``Indicators of human capital
incomparability between firms. investment and outcomes from the Bukh, P. N., Larsen, H. T., &
A mandatory and consistent American society for training and Mouritsen, J. (2001). Constructing
development'', paper presented at intellectual capital statements.
framework for ICR, designed by
the International Symposium Scandinavian Journal of
the regulatory body in Measuring and Reporting Management, 17(1), 87-108.
Bangladesh, can pave the way Intellectual Capital: Experiences,
for decision usefulness to meet Issues, and Prospects, OECD, Brennan, N. (1999). Reporting and
the demand of globalized Amsterdam, June. managing intellectual capital:
financial reporting. evidence from Ireland. paper
Bontis, N. (2003). Intellectual capital presented at the International
disclosure in Canadian corporations. Symposium Measuring and
References Journal of Human Resource Costing Reporting Intellectual Capital:
& Accounting, 7(1), 9-20. Experiences, Issues, and Prospects,
Abeysekera, I. (2007). Intellectual
OECD, Amsterdam, June.
capital reporting between a
developing and developed nation.
Journal of Intellectual Capital, 8(2), Appendix
329-345.
Table A1: Companies included in the sample
Abhayawansa, S. (2011). A Net Income
Company Name Revenue
methodology for investigating After Tax
intellectual capital information in Square Textile 7,758,879,164 413,735,692
analyst reports. Journal of Shasha 6,256,605,210 591,762,794
Intellectual capital, 12(3), 446-476. Envoy 6,078,738,108 321,176,626
Makson 4,074,750,862 74,288,893
Abhayawansa, S., & Azim, M. (2014). Paramount 3,351,654,004 224,930,663
Corporate reporting of intellectual GNF 3,279,614,648 241,713,994
Fareast 3,275,288,788 349,483,957
capital: evidence from the
Apex 3,205,556,644 23,163,478
Bangladeshi pharmaceutical sector.
Stylecraft 3,090,336,551 28,857,886
Asian Review of Accounting, 22(2), Matin 3,001,195,559 261,333,229
98-127. Saiham Cotton 2,989,827,171 158,130,539
Argon 2,847,715,899 349,729,413
Abeysekera, I., & Guthrie, J. (2005). Shepherd 2,578,968,478 127,992,497
An empirical investigation of annual Evince 2,326,845,444 185,614,034
reporting trends of intellectual HR 1,640,655,729 36,286,448
capital in Sri Lanka. Critical Saiham 1,529,634,985 92,381,746
Perspectives on accounting, 16(3), Hamid 1,322,686,460 72,057,481
151-163. FamilyTex 1,305,188,432 (14,057,256)
Zahintex 1,216,837,944 54,177,321
Hwa Well 1,210,369,320 117,835,747
Ali, M.M., Khan, M.H.U.Z. and Fatima,
Tosrifa 1,206,899,302 83,338,359
J.K. (2008). Intellectual capital Alltex 1,202,065,456 (119,018,651)
reporting practices: evidence from Delta 1,077,547,666 43,716,376
Bangladesh. Dhaka University Dragon 1,015,339,175 145,578,043
Journal of Business Studies, 29(1), Zaheen 869,044,896 119,249,204
23-45. Metro 818,904,314 (38,726,058)
RahimTex 717,462,840 44,958,320
Akter, A. (2017). An overview of Desh 375,722,677 34,463,291
Bangladesh RMG 2016. [online] Alhaj 293,285,408 32,003,317
News, Views & Articles: RMG, Anlima 181,421,784 10,013,745

Financial Determinants of Stock Price in Banking Sector
Evidence from Listed Banks in the Dhaka Stock Exchange (DSE) Ltd.
Arif Ahammed | 2Amirus Salat

1
A
bstract for increasing BVS that, to the
contrary, positively impacts the
The Authors are:
This paper aims at finding share price of banking
out the financial determinants companies.
of stock price movements of
Banking Companies listed in the Key Words
DSE, Bangladesh. It involves
simple multiple regression Stock Price Determinants,
analysis for determining the Banking Companies, DSE,
nature and extent of the Bangladesh, BVS, DY, Size
relationship between the
dependent variable (stock price Introduction
at year end) and independent
variables (Dividend Yield, Book Stock price volatility is always a
Value per share, Price-earnings major concern for the investors
ratio and Size of the company in and companies as it is the only
terms of the total asset). This factor that determines the initial
1
Lecturer
School of Business article finds that Book Value per investment or disinvestment
Ahsanullah University of share is a positive significant decision. Share price volatility
Science & Technology determinant of stock price creates a risk of investment and
movement of banking insecurity among the investors.
companies in Bangladesh, This price volatility is affected
where Dividend Yield and firm by many factors. Among the
size have significant negative factors, financial variables are
impact on stock price supposed to be more
movement. It is also found that dominating in investment
Price-earnings ratio plays a decision as investors normally
positive impact on stock price look at the financial aspects of
movement but that is not the company rather than
statistically significant. Findings economic factors and, hence,
suggest that a banking can be strong determinants of
company in Bangladesh with the stock price movement. In
higher Book Value per share this paper, four major variables
(BVS) can be safer to invest in. are considered to determine
On the other hand, a good size their impact on the stock price
2
Associate Professor of the firm is not always a good movement of banking
Department of Accounting & companies listed in the DSE,
indicator of better performance
Information Systems Bangladesh. This paper
and safety of the investment
University of Dhaka
because of inefficient use of considers Book Value per Share
assets among other reasons. A (BVS), Price-earnings ratio (P/E
lower dividend yield is highly ratio), Company Size (total
suggested both for assets) and Dividend Yield (DY)
management to retain fund in as independent variables.
the organization and investor to Banking companies are a major
look at before investment, as contributing sector of financial
dividend yield negatively institutions of Bangladesh and
impacts share price. On the contribute highly to the capital
other hand, lower dividend formation and financial
leaves more to the organization development of the country. It

ARTICLE
also creates a huge employment opportunity in In the following sections, this paper,
Bangladesh. Investors are also willing to invest in discusses research methodology,
this sector because of their higher profitability. research approach, and sample and
Most important avenue for investment in this research objectives. Later on, it discusses
country is the equity share (as evident by the 43% the financial variables used as the
of market capitalization coming from equity determinants of stock price movement of
shares on 22 October, 2017). Returns (profit or banking companies in Bangladesh. In
loss) depend on financial performance that is later section, this article discusses the
represented by higher or lower stock price. In empirical findings and results of
Bangladesh, the stock market is inefficient statistical analysis. At last, this article puts
(Mobarek et al, 2008). Therefore, here all the a concluding remark and suggests
information is not adjusted to price efficiently. On implications for investors and
management.
Literature Review
Here in this paper, it is tried to
identify the most significant A very small number of researches have
determinants of stock price been performed on the financial
determinants of stock price movements
movements in the banking companies in the banking companies of Bangladesh,
of Bangladesh from which the though a number of researches are found
in other countries. From those
investors will get some investment researches, a strong portfolio of
guidelines and bank managers will background
acquired.
knowledge has been
get some sorts of policy implications.

Some researchers have tried to Shubiri (2010) performed a research on
the determinants of stock price
identify those determinants in the movement of commercial banks listed in
previous periods. Amman stock exchange in Jordan. He
found a very significant positive
relationship between book value per
the other hand, stock market investors in this share and share price movement. He also
country are marginal who invest on shares and found a significant positive relationship
wait for the price increase to buy their livelihood between share price movement and
with money from selling the stock. Losing the dividend yield that is a little contradictory
investment due to the unwise and thoughtless with theoretical studies.
decision is always hurting the investors of this
country. Therefore, a better investment guideline Later on, Almumani (2014) performed a
is necessary. Here in this paper, it is tried to research with a slightly modified name on
identify the most significant determinants of the listed banking companies of the same
stock price movements in the banking companies stock exchange. He found that stock
of Bangladesh from which the investors will get price movement is significantly positively
some investment guidelines and bank managers related with Price Earnings ratio but
will get some sorts of policy implications. Some significantly negatively related with Size
researchers have tried to identify those of the company. He also found a
determinants in the previous periods. This article significant relationship of share price with
considers more data and most recent data for the dividend policy.
study purpose.

test to identify the impact of

economic activities and
economic factors on stock price
movement in India. They
considered 30 major banking
companies in India for
performing the study. They
found that in addition to
economic activities, interest
rate and exchange rate
significantly affect the stock
price movement in India.
Nisha and Nishat (2001)

performed a study on the same
topic in Pakistan. They collected
their data from 221 firms from
1995-2006 to identify the
significant determinants of
Nazir et al (2010), on the other found that Price-earnings ratio stock price in Pakistan and to
hand, found opposite results to has a significant positive impact provide investment guidelines
the previous two articles' on stock price movement. On to the investors. According to
findings. In his article on the other hand, according to them, Book value to market
determinants of stock price their findings, the dividend yield value ratio, Share turnover ratio
movement in Karachi, he found has a significant negative and the inflation rate in addition
that stock price movement is impact on the stock price to GDP can significantly affect
statistically significantly movement of commercial Banks the stock price movement.
positively related to dividend in Nepal. But, they have found
yield and size of the firm. Like no significant impact of firm size Uddin et al (2009) performed a
the previous research, he also on stock price movement. They study on the determinants of
performed a simple multiple have performed their analysis market price movement of
regression analysis of the on data from 2006 to 2014. stocks of Banks, Leasing and
selected variables. Insurance companies of
Khan (2014) performed a study Bangladesh using regression
Ali et al (2010) performed a based on the data from 15 analysis. They have found that
study on the effects of dividend Pakistani banks to identify the in Dhaka stock exchange, the
policy on the stock price impact of profitability, size, stock price is significantly
movement of listed commercial asset growth, and dividend on positively affected by Earnings
banks of the DSE, Bangladesh. stock price movement. He per share, Dividend percentage
They found that dividend collected data from 2008-2011. (Dividend yield) and Net asset
announcement has no impact In his study, he found that only value per share (BVS).
on the stock price movement of the size has a positive
commercial banks listed in the significant impact on the stock Malhotra et al (2013) performed
DSE, Bangladesh. price movement, but other a study on 90 companies of
factors have an insignificant National Stock Exchange (NSE)
On the other hand, a study impact on the same. of India to determine the factors
performed by Bhattarai (2014) of stock price movement. They
on stock price determinants of Narayan et al (2014) performed used simple regression analysis
commercial Banks in Nepal a study using Granger causality on the data from 2007-2012.

ARTICLE
price movement in banking

companies that are listed in the
DSE, Bangladesh. It analyzes the
impact of financial determinants
on stock price movement or
stock price volatility. As it is
based on most recent data, it
will be able to give more
realistic and appropriate
guidelines about stock price
movement. Thus, this article fills
the existing research gap and
contributes to the existing body
of literature.
Research Objectives
The core objective of this

research is to find out the
financial determinants of the
Their findings are consistent was 1999-2006 and taken into stock price of the listed banking
with the previous findings account for that research 104 companies of the DSE,
described above. They found non-financial companies listed Bangladesh. This paper also
that book value per share, on the Dhaka Stock Exchange. aims at finding whether the
earnings per share, and price
standard accounting theories
earnings ratio have significant Hoque et al (2013) performed a are congruous with the practical
positive impact on the stock study to analyze the impact of situations prevalent here by, at
price movement of the selected dividend declaration on the first, discussing the expected
companies. On the other hand, stock price movement. They relationship among the
they found that Dividend yield found no significant gain variables as per theory and then
has a significant negative evidence from dividend finding the statistical
impact on the stock price declaration. As evident from relationship. At last, but not the
movement of the selected above, a very limited number of least, it attempts providing
companies. studies have been found that investment guidelines for the
determine the financial investors and policy
Afzalur and Anisur (2008) determinants of stock price implications for the
performed a study on the effect movement in the Bangladesh management.
of dividend policy on the stock stock market.
price movement in Bangladesh.
Sample and Data:
They performed a Since the previous studies like
cross-sectional regression Afzalur and Anisur (2008)
This paper considers 10 listed
analysis. They found that considered only 7 years’ data
banking companies in the DSE,
dividend yield has a positive but from 1999 to 2006, Khan (2009)
Bangladesh, namely, EXIM Bank
insignificant impact on the considered data from 2000 to
Limited, Dutch Bangla Bank
stock price movement. They 2006, this paper considers the
Limited, Islami Bank Bangladesh
have also found that firm size most recent and larger period of
Limited, Bank Asia Limited, City
has a significant negative data (from 2006-2015, covering
Bank Limited, Mutual Trust Bank
impact on the stock price total 10 years) to identify and
Limited, National Credit and
movement. Their study period analyze the factors of stock
Commerce Bank Limited, Dhaka

example, it is common that

other things remaining
constant, an increase in selling
price will increase the profit
margin or decrease in the
operating expense will lead to
more profitability. Many of the
accounting figures are linked
this way. Similarly, stock price of
a company is affected by
several such financial variables
of a company. Here, four
Explanatory variables have
been used to determine their
impact and extent of that
impact on the stock price
movement of the banking
companies listed in the DSE,
Bangladesh. These variables
and their hypothetical
relationship with stock price are
given below:
Price-Earnings Ratio
(P/E Ratio)
Price-earnings ratio represents

the ratio between market price
per share and earnings per
Bank Limited, Trust Bank of these banking companies. share. It is also multipliers of
Limited and United Commercial Here, simple descriptive Earnings per share (EPS).
Bank Limited. The study period statistics, correlation analysis Price-earnings ratio represents
covers a period of 10 years from and multiple linear regression how much per unit earnings of
2007 to 2016. These banks were equation models have been the company will cost or simply
selected randomly from the used to analyze the data and the price of getting per unit of
banking industry of this country. find out the impact of the earnings. It represents the
These companies comprise selected independent variables extent to which the share price
one-third of the existing on the stock price volatilities. of the campy is fairly valued or
banking companies listed in the Results of models used have undervalued or overvalued.
DSE, Bangladesh. been derived using standard
software named Stata. H0: There is no significant
Methodology relationship between stock
Description of price and P/E ratio.
This study collects the required Independent Variables
data from the annual reports of and Hypothesis Building H1: There exists a significant
the selected banking companies relationship between stock
for the whole study period. Data Different accounting figures and price and P/E ratio.
has been taken from the audited ratios affect the other figures
and published Annual Reports and ratios differently. For

ARTICLE
H0: There is no significant

relationship between stock
price and DY.
H1: There exists a significant

relationship between stock
price and DY.
Model Development
This paper investigates the
financial determinants of stock
price volatility of banking
companies of Bangladesh
taking the sample from the
listed banks in the DSE. It
considers P/E Ratio, BVS, Size,
and DY as independent
variables. So, the market price
(MP) of a common share is a
Book Value per Share service providing ability of the
function of the four variables
(BVS) company, the collection of more
that can be represented as
resources and having a strong
follows:
Book value per share represents competitive position in the
the amount of net asset in the market. They can generate MP = ( P/E,BVS,Size,DY)
firm against per outstanding more liquidity than other
Based on this functional
equity share. It measures the smaller companies. It is also
relationship and expected
level of security against the worth mentioning that an
pattern of relationship, as
stock investment by the inefficient management of
discussed above, our regression
shareholder. If the company assets may result in the bad equation is as follow:
liquidates, BVS measures the impact on share price through a
ability to recover the portion of less than the expected amount MPit = α + + β1 P/Eit+ β2 BVSit+
the shareholders' investment. of Return on Assets (ROA). β3 Sizeit – β4 DYit + εit
Where, MPit = market price of
H0: There is no significant H0: There is no significant
share of Bank i in year t
relationship between stock relationship between stock
price and BVS. price and company size. P/Eit price earnings ratio of
Bank i in year t
H1: There exists a significant H1: There exists a significant
BVSit = Book value per share of
relationship between stock relationship between stock
Bank i in year t
price and BVS. price and company Size.
Sizeit = Total asset of Bank i in
Company Size Dividend Yield (DY) year t
DYit = Dividend Yield of Bank i
Size of business means its total It is a ratio between dividend
in year t
operation or basement of per share, shortly DPS and
operation. It can be measured Market value per share (MPS). It β represents the coefficient of
by revenue, total assets, paid-up represents the rate of return on regression equation
capital or capital employed. the market value of the share to
ε represents error term of the
Higher size represents higher the common stockholders.
model

Table: 1 Summary of Expected Relationship among the Variables
Dependent Variable Independent Variables Expected Relationship Sign

Market Price of Stock (MPS) P/E Ratio Positive +
Market Price of Stock (MPS) BVS Positive +
Market Price of Stock (MPS) Size Positive +
Market Price of Stock (MPS) DY Negative -
Table 2: Presentation of Descriptive Statistics
MP P/E BVS DY Size

Mean 365.0928 10.42063 104.0455 0.021559 162439758382.19
Standard Error 86.43618 0.788332 16.01674 0.010396 15667193913.77
Median 44.22825 8.915 27.44 0 120498205000
Mode 25 0 19.07 0 182730940000
Standard Deviation 864.3618 7.883317 160.1674 0.103956 156671939137.70
Kurtosis 34.34285 15.37122 21.43828 91.27447 7.17
Skewness 5.375368 2.937805 3.968365 9.366871 2.49
Range 6756.913 59.94 1154.88 1.028184 902009460000
Minimum 8.587 0 0 0 2827540000
Maximum 6765.5 59.94 1154.88 1.028184 904837000000
Sum 36509.28 1042.063 10404.55 2.155903 16243975838219
Count 100 100 100 100 100
Largest(1) 6765.5 59.94 1154.88 1.028184 904837000000
Smallest(1) 8.587 0 0 0 2827540000
Table 3: Presentation of Correlation Matrix
Ln MP Ln P/E Ln BVS DY Ln Size

Ln MP 1
Ln P/E 0.028148438 1
Ln BVS 0.764596861** -0.1664075 1
DY -0.154749211 -0.060624 -0.0099269 1
Ln Size -0.4511324** -0.0243229 -0.3578296** -0.4165262** 1
** means that the variables are significantly correlated at 5% level of significance

Table 4: Result of Regression
Variable Coefficient Std. Error t-Statistic Prob.

C 54.04151 10.67273 5.06 0.0000
Ln BVS 0.0322728 0.0030377 10.62 0.0000
Ln P/E 0.3104918 0.1567852 1.98 0.051
Ln Size -15.70878 3.269715 -4.80 0.0000
DY -4.452071 1.01331 -4.38 0.0000
R-squared 0.7010 Durbin-Watson stat
Adjusted R-squared 0.6884 1.9838
F-statistic 55.68 Prob. (F-statistic) 000.0000

ARTICLE
Results and Findings of Table 3 represents correlation significant positive impact on

Empirical Evidence coefficient among stock price, the stock price. A one unit
BVS, P/E ratio, Size, and DY. change in BVS incurs 0.0322728
Summary of Descriptive Here a 5% level of significance unit change in the stock’s
Statistics has been considered. market price of banks in
Bangladesh. The coefficient of
Table 2 represents the From the results, given in table regression with BVS is
descriptive statistics of the 3 above, it is conspicuous that 0.0322728, from table 4; t value
selected variables for the study stock price has a significant is 10.62 and p-value is 00.000
period. The stock price has a co-movement with Size and that is less than 5%. These
mean value of 365 with the BVS. The pattern of statistics prove that the
maximum value of 6765.50 and, co-movement of share price existence of the significant
minimum value of 8. Its with Size of the firm is negative impacts of BVS on stock price
standard deviation is 864.9724 and with BVS it is positive. Both movement, though the impact
that is significantly high. of these are statistically is not too high. On the other
Price-earnings ratio has a mean significant. On the other hand, hand, company size and
of 11 (approx.) with, a maximum DY has a negative dividend yield have significant
value of 59.94 and, minimum co-movement with the stock negative impact on the stock
value of 0, having a price but that is not significant. price movement. A one (1) unit
corresponding standard Price/Earnings (P/E) ratio has a change in Size of the company
deviation of 7.883317. On the positive co-movement with results in a fall of 15.70878 units
other hand, the Dividend Yield stock price change but that is in the market price of the shares
has a very low mean value not statistically significant. of Banks in Bangladesh. The
having maximum 0.021559 and Correlation among the coefficient of regression with
the minimum value of 0 and has independent variables is also Size is -15.70878, from a table 4,
a standard deviation of given. It is clear that no t is -4.80 and p-value is 00.000
0.103956. It means that multi-co-linearity occurs among that is less than 5%. On the
dividend payment compared to the independent variables. other hand, the regression
the market price of a stock is coefficient of Dividend yield is
low enough. Company size Table 4 presents the result of -4.452071, t value -4.38 and
(Total assets) has the mean regression analysis among the p-value is 0.00 that is
value of 162439758382.19 with a variables. The purpose of substantially lower than 5%. A
standard deviation of regression analysis is to one unit change in dividend
156671939137.70 and has estimate the impact of yield, hence, results in a fall of
maximum and minimum value independent variables 4.452071 units in a stock price of
of 904837000000 and (regresses) on the dependent banking companies in
2827540000 respectively. At variable (Market Price). Bangladesh.
last, book value per share has a Regression coefficient has been
mean value of 104.0455 and estimated by using simple Value of the adjusted R squared,
standard deviation of 160.167. It multiple-regression analysis as showed in table 4, is 0.7010
implies the maintenance of a technique. that implies that almost 70%
handsome book value by the changes in the dependent
banking sector of Bangladesh. The result of Table 4 shows that, variable are incurred by the
All of the variables are right at 5% level of significance Book selected independent variables.
skewed and all of them are Value per share (BVS), Firm Size In other words, this model is
having a kurtosis value more and Dividend Yield are capable of explaining 70%
than 3 meaning that they are significant determinants of the changes in the share price of
Leptokurtic. stock price of listed banks in the Banks in Bangladesh. It implies
DSE, Bangladesh. Only BVS has that 30% of the variation in

per share is significantly

positively related to share price
movement. So, management
can focus on keeping a healthy
book value. Management can
reduce the extent of dividend
payment relative to market
price because the ratio between
market price and dividend
payment called Dividend Yield
(DY) is negatively related to
share price movement. On the
other hand, fewer dividends will
leave more retained earnings for
further investment resulting in
higher book value per share.
This higher book value, in turn,
will yield a higher share price for
the banking company.
stock price is determined by the Summary and
Therefore, management should
other variables not captured in Conclusion
our study. Overall, the cautiously handle dividend
explanatory power of the model policy with special focus on
Identification and analysis of
is satisfactory. lower dividend yield. On the
determinants of share price
other hand, as per the findings
movement are of great interest
On the other hand, the value of of this article, Size of the
all over the world as the share
F statistics is 55.68 and its company is negatively related
price is the variable on which
corresponding p-value is 0. This to the share price. This finding is
investment decision depends
means that, in this model, consistent with that of
on. In the Banking sector of
independent variables are Almumani (2014). It bears the
Bangladesh, it is a matter of
statistically significant to implication of the inefficient use
much attention because
explain the dependent variable. of large-scale assets invested in
banking sector comprises a
This means that in the Banking the companies. Investors, on
major portion of the stock
sector of Bangladesh, a stock the other hand, should focus on
market investment and financial
price is significantly affected by the BVS, Size and Dividend in
market. The purpose of this
BVS, P/E ratio, DY, and Size of a their investment decision. They
study was to determine those
company. The value of Durbin should not run to the higher
factors that affect the share
Watson stat. (DW) is 1.9838 that dividend paying banking
price of listed banking
implies that our model is not a companies, rather they should
companies in Bangladesh. It also
spurious/nonsense model as focus on the company that is
attempts providing some
the level of no significant paying less dividend and
investment guidelines and
auto-correlation for a two tailed retaining more for grasping
managerial implications. This
test lies between two values, investment opportunity and
paper finds Dividend Yield to be
upper level (du) and 4-du maintaining healthy BVS.
significantly negatively related
(Anderson et al, 2011). It also to stock price movement. This
implies the independence of the One of the limitations of this
finding is strongly contradictory
model from error term and article is that it is prepared
with Modigliani and Miller (1961)
non-existence of based on the annual report
proposition which suggests that
auto-correlation. published by the companies.
dividend is value-irrelevant. This
These annual report may be
paper also finds that Book Value

ARTICLE
fabricated. Another limitation is Journal of Economics and Technology (IJRMT), ISSN, pp.
that only company-specific Sustainable Development, 4(8), 2249-9563.
factors have been considered pp.89-98.
Uddin, M. B., 2009. Determinants of
here. The inclusion of Miller, M. H. and Modigliani, F., 1961. the market price of the stock: A
macroeconomic factors could Dividend policy, growth, and the study on bank leasing and insurance
reduce the risk factor. valuation of shares. the Journal of companies of Bangladesh. Journal
Business, 34(4), pp.411-433. of Modern Accounting and
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Mobarek, A., Mollah, A. S. and
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Case of Bangladesh Capital Market. Research in Management &

Role of CFOs in Technological Transformation
Dewan Nurul Islam FCA
T
he straight meaning of officer can no longer simply rely
transformation is ‘a on crunching numbers while
marked change in form, focusing solely on a company's
nature, or appearance’. It also statement of financial position.
means the operation of
changing one configuration or To succeed from here on, CFOs
expression into another in will need to shift their focus
accordance with a towards analytics, people
mathematical rule. As per management, disruptive
Cambridge Dictionary technology, and several other
transformation is a complete crucial and newly forming
change in the appearance or variables.
character of something or
someone, especially so that that From a discussion paper issued
thing or person is improved. by IFAC we understand about
some principles guiding the role
The Author is a So, we notice two key words and expectations of a CFO
Chartered Accountant and here - change for improvement. where it states “A professional
the President of the CFO should:
Institute of Chartered Accountants The Great George Bernard
of Bangladesh-ICAB 1. Be an effective
Shaw said that 'progress is
organizational leader and a
impossible without change; and
key member of senior
those who cannot change their
management;
minds cannot change anything’.
And the great scientist Stephen 2. Balance the responsibilities
Hawking stated that intelligence of stewardship with
is the ability to adapt to change. business partnership;
So, for betterment and for 3. Act as the integrator and

improvement, we need to navigator for the
update ourselves with the organization;
change, the transformation; and 4. Be an effective leader of the
while we are talking about finance and accounting
technological transformation, function; and
we have no way to avoid it in
order to chase the race. 5. Bring professional qualities
to the role and the
Technological transformation is organization.”
the use of new technologies to
drive significant business The discussion paper states
improvements. Finance people “Professional accountants
including CFOs are the integral working in business can
part of any business and they typically be found in four types
are compelled to embrace the of roles: as value creators,
technological transformation enablers, preservers, and
for betterment of their business. reporters.
The role of the CFO is rapidly The CFO principles relate to

changing. A chief financial these roles and will need to
ensure success in each by:

ARTICLE
1. Creating value—developing strategies for technology. The CFO of the future must
sustainable value creation; enable innovation and manage risk
better. Leadership, people, and business
2. Enabling value—supporting the governing
skills are absolutely crucial to the future
body and senior management in making
of the CFO function. Adequate
decisions and facilitating the understanding
understanding about changing
of performance of organizational functions or
technology is the part of their technical
units;
and business skill.
3. Preserving value—asset and liability
management, managing risk in relation to Business can attain benefit from the use
setting and achieving the organization’s of technology and digitalization in
objectives, and implementing and monitoring different manners. For higher-value
effective internal control systems; and business advice, better planning and
forecasting, streamlined accounting and
4. Reporting value—ensuring relevant and useful compliance, enhanced decision making,
internal and external business reporting.” lower costs and fewer errors, decreased
risk and higher returns and for many
relevant arenas, use of upgraded
A big challenge at present time is technology can provide benefit to the
business restructuring and changes, business organization.
and having to still rework the data It is true that CFOs are not expected to
to match those changes. We need to be data scientists - they don't have to
understand the algorithms - but the CFO
be able to depend on our data to a of the future will need to be the
greater extent, to get out of it connector between the business and
insights to really take our data scientists. To really get insights into
a business they have to look at the
conversations to the next level, underlying non-financial drivers to the
especially in an increasingly global financial information.
and competitive environment where If CFOs are focused on the balance sheet,
ongoing changes in technology has compliance, processes, procedures and
conformance, they are not engaging in
much significance. value creation. Value creation today is a
knowledge-based economy. Companies
are now more likely to create value using
In addition to having the technical, analytical and intangible assets and intellectual
leadership capabilities, to enhance these values, property. Use of modern technology can
CFOs are required to be updated with the add value in this process.
technological transformation and its impact on
business with necessary efficiency. CFOs must balance performance,
efficiency, and risk—but that requires
The more time CFOs spend on analytics the more digital tools as well as the agility to
they help the business and enable effective manage volatility and drive enhanced
business partnering. CFOs must manage an decision making at reduced cost. Few
increasing amount of risk of changed technology. Finance people have these capabilities. In
The clear and current danger is that a business fact, many finance organizations lack
model is going to be disrupted by technology at such digital basics as automated
any point of time. So, they must adapt to new processes, the ability to integrate and

Role of CFOs in Technological Transformation
seen this a couple of times.

Macro-economic and
geographic volatility can result
in exchange rate and
commodity price fluctuations.
Often, finance reacts slowly to
these changes struggling to
keep up with the daily
operations of recording
transactions and closing the
books.
In today's networked and

collaborative world, finance
needs to closely collaborate
with many functions within the
company to problem solve and
explore optimal solutions. Let's
now look at the recent leaps in
analyze data, and a workforce digitalization within the digital enterprise technologies
with digital capabilities. organization, as it allocates that can help the CFO transform
resources for growth, but is finance function to address
Besides the fears from often not the leader in applying these trends.
economic uncertainty, digital technologies.
regulatory and reporting Responding to volatility
Paradoxically, finance often
compliance, financing factors, requires access to the latest
(rationally) allocates IT
stakeholder management, and data and the ability to look
investments to the
growth risk, technological forward, not just backward in a
revenue-generating and
changes and cybersecurity are 'rear-view mirror' with historic
customer-facing functions
the most challenging part for data. An automatically
risking its own functions to be
the business and CFOs as well. reconciled and inherently
stuck in the digital wilderness.
compliant data platform,
A big challenge at present time Digital technologies—and their because of the lack of
is business restructuring and ability to transform the finance redundancy, helps finance
changes, and having to still function with improved department do a 'soft close
rework the data to match those planning and decision making, anytime'. It eliminates a lot of
changes. We need to be able to streamlined processes, and the manual work freeing up the
depend on our data to a greater better cost management—are time to do strategic analysis of
extent, to get out of it insights critical to meeting today’s the business. Applications using
to really take our conversations business challenges. To achieve real-time data also put the
to the next level, especially in an the most value, the finance insights in the hands of business
increasingly global and function must develop a digital driving better compliance and
competitive environment where strategy that aligns with the self-service.
ongoing changes in technology company’s overarching digital
has much significance. In most of the organizations, the
framework.
CFO is ultimately responsible
CFOs should have a closer look Companies today are faced with for capital expenditure
at digital technology to reinvent tremendous volatility. A single decisions including investments
themselves. The finance tweet can cost the company in technologies. Finance has the
function is central to millions in market cap, we have opportunity to carve out a more

ARTICLE
undertake this journey believing

the box never existed. Modern
user experience, business
application software, cloud
deployment can play vital role
for business development.
It is not that we use technology,

we live technology every day.
We need to figure out how to
change our entire business
process to accommodate new
technologies to save our
business. It is said that
technology is a useful servant
but a dangerous master.
Finance professionals who were
considered expert users, had to
be trained to use the complex
strategically influential role number-crunching CFO in a accounting and finance
within the business, pivoting small organization, you will need software needed to get their job
their role as business advisors, to rapidly broaden your skill set, done. We know that practice is
enabler and operator across the as the brave new world will be the hardest part of learning, and
digital value drivers in this fast here faster than you think. If training is the essence of
moving environment. But it also you’re a strategic CFO, you’ll transformation. Training and
could be marginalized if it fails need to broaden your horizon, practice for learning is the best
to provide the analysis, insights as so much more will be way for CFOs to be equipped
and guidance that businesses possible so much sooner than and to adapt to such
demand in this digital age. Key you think. Likewise, we will see technological transformation.
attributes of new finance much greater demand for
functions are speed, agility and commercial CFOs who support In conclusion, a great quote
foresight. sales teams at the coalface of from Amazon founder Jeff
customer deals and come up Bezos can be stated here that
In a nutshell, it's time for CFOs with creative financing ideas, “In today’s era of volatility, there
to start using today's digital while machines handle internal is no other way but to re-invent.
technologies to drive digital approval chains. The only sustainable advantage
transformation within finance you can have over others is
functions. It gives them the The digital revolution is creating agility, that’s it. Because nothing
opportunity to expand their a world that is constantly else is sustainable, everything
focus on efficiency and connected, constantly else you create, somebody else
compliance while reimaging a innovating and constantly will replicate.”
new finance function that drives confounding conventional
strategy and new business wisdom. What’s needed is a Sources
models as a strategic partner to clear vision and leadership from
the business. the CFO – a strategy for the The Role and Expectations of a
digital age rather than a digital CFO: A Global Debate on
Change is uncomfortable, but strategy. The CFOs will have to Preparing Accountants for
it’s not always a bad thing. It can ensure that, rather than putting Financial Leadership, Discussion
make CFO’s functions more themselves inside a box and Paper, IFAC
creative. If you’re a trying to see outside of it they

Bangladesh as Neo-MIC
Opportunities and Challenges
Shahidul Islam ACA
I
ntroduction We have a test period of 6 years
in two spans till 2024 when we
Bangladesh per capita have to eventually use all our
income reached to 1,752 US$ human skills in optimum
alongside the growth rate rising productive areas of Income
to 7.28 percent in last fiscal. The Generating Activities (IGA) for
vision 2021 of the Government sustaining stable growth and
lays down a series of advancement.
development targets by 2021.
Coming across many Bangladesh has demonstrated
impediments & challenges, proven but extraordinarily
Bangladesh has demonstrated success in advancing its
its remarkable progress in economy. Again disseminating
poverty alleviation and human and spreading the benefits of
development. Bangladesh that growth across society and
possesses a heritage of country is regarded will be
The Author is a revolutionary history of regarded as success story for
Chartered Accountant and conquering the unconquerable. other LDC countries.
an Associate Member of the Its people aspire to live with
Institute of Chartered Accountants optimism and positivity. This Criteria for Middle
of Bangladesh-ICAB which has surely helped the Income Countries
country to be in continuous and
speedy improvement tracks in Since the 1990s, the country has
major areas. Additionally, we averaged 5%+ annual gross
have a sizeable active domestic product growth. This
population, which is currently growth was accompanied by a
over 160 million. While we have significant decline in poverty,
unused but workable human increase in employment, greater
brain and labor who are wait for universal access to health and
employment in productive and education, and improved basic
Income Generating Activity infrastructure. These have led us
(IGA), Bangladesh has to the status of lower middle
advanced from LDC to MIC as income country. The next goal is
per the United Nations. A formal to reach upper-middle-income
announcement has already country status in the ongoing
been made in this regard. process. This ambitious
Bangladesh has also initiative will require annual GDP
ceremonially celebrated its growth of 7.5%–8% and will
graduation into the Middle entail overcoming significant
Income Countries’ cluster. obstacles and seizing on new
opportunities brought about by
A large number of discussion changing global circumstances.
and criticism are ongoing about Our current GDP growth is
what opportunities to come and 7.28% +.
the likely challenges for
Bangladesh in post-graduation Generally, the World Bank
to Middle Income Countries. assesses countries before
However, being graduated now graduating from low-income
we are to sustain the growth. country status to Middle Income

ARTICLE
status for the next 6 years.

Table
Requirement Bangladesh’s Challenges Ahead
Particulars as per achievements Status
World Bank Following are major challenges to be
Gross National Income faced in post Middle Income Country
$1,242 $1,610 Achieved time:
(GNI) per capita
Which has Bangladesh’s Achieved
Human Development to be 66 or HAI is 72.9 Increasing Productivity
Index (HDI) above
To reach the next level, Bangladesh
Economic Achieved
Bangladesh’s needs to increase productivity and
Vulnerable economic Vulnerability
EVI is 25 improve the country’s reliable energy
indicators Index below
32 supply. It has to revise business policies
that stunt the development of
non-garment exports, and improve
property and land rights registry systems
Every year, we need to borrow huge to protect investments. This will be a
funds from the international money great challenging task for our country but
not unsurmountable
market to meet budgetary deficits.
The rate of interest at which we avail Increased Cost from Import Duty
such loans, especially from the Becoming middle income country will
International Development increase the cost of production as import
Association (IDA), is 0.75 percent duty will be 6.7% on imported goods and
services leading to increased additional
and the principal amount is product cost by US$ 2700 million. This
reimbursable within 39 years. will create difficulties in achieving
competitive advantages due to
But what if the global lenders stop significantly increased cost of
treating us as an LDC? So, we need production.
to be cautious to come across this Cost of Funding may be Higher

challenge.
Countries status on the basis of three criteria

which are GNI per capita, human development
index and vulnerable economic indicators.
Table 1 shows the country’s achievement of MIC:
We can safely assert that we have achieved the

GNI threshold set by the global lender, which
duly has placed Bangladesh in the lower-middle
income country bracket. However, in order to be
consistently categorized as a middle income
country, Bangladesh has to sustain the MIC

Bangladesh as Neo-MIC
Opportunities and Challenges
 The middle-income country

status may boost our
bargaining power in
ensuring loans. It will surely
help to get access to
significantly bigger loan
facilities for improving their
infrastructure facility in
order to ensure planned
industrialization. Besides, if
we can utilize our maximum
workforce in productive
and income generating
activities, it will surely
ensure a continuous and
accelerated improvement
to reach our long term goal.
Every year, we need to borrow Export be diversified beyond
 Bangladesh received $2.65
huge funds from the the garment industry
billion in gross inflows of
international money market to
FDI between July 2016 and
meet budgetary deficits. The A significant portion of our
May 2017, whereas the
rate of interest at which we avail export earnings is generated
amount was $2.33 billion in
such loans, especially from the solely form Ready Made
the same period of the
International Development Garments Product (RMG). In the
previous year. Throughout
Association (IDA), is 0.75 long run this sector may not
the last decade FDI has
percent and the principal serve well so that it is high time
been in increasing trend. It
amount is reimbursable within we should diversify our risk.
is well depicted in following
39 years. But what if the global
presentation:
lenders stop treating us as an Opportunities
LDC? So, we need to be
 Finally, Bangladesh must
cautious to come across this Following are expected
have to create adequate
challenge. opportunities for becoming MIC:
Better Jobs Needed for People
Another challenge to be faced

by the country is the problem of
underemployment. The
proportion of workers
employed in the informal sector
in having high
underemployment, low
earnings, and poor working
atmosphere. Women continue
to get paid less for the same
work and have fewer labor
opportunities. Gender gap in
wages is widely persistent.

ARTICLE
said that- Every opportunity is a

problem for a Pessimist but
every problem is an opportunity
for an Optimist. And
Bangladesh is an optimist
nation.
Bangladesh's
current account
jobs for its unemployed pursued. The external current deficit reached a
population to defeat account deficit has also been
poverty. New job low. This reflects the continued 15-year high of
opportunities can be high growth of exports, $5.34 billion in
created for them so that increased flows of remittances,
they can also contribute to moderate growth in money
the first seven
the economy. supply as well as that of months of the
imports. A fair societal system fiscal year as the
Conclusions should be encouraged where
earnings shall be determined on country's
Bangladesh is now accredited the basis of individual capacity to
as one of the next 11 emerging capabilities, which will help build export is failing
economies. We aim to migrate a greater nation. To reach the
to an upper-middle income next level, Bangladesh needs to to keep up with
country within the next 6 years. improve the country’s reliable the appetite for
To achieve this goal, we are energy supply, revise its
imports.
required to increase our GNI to business policies that stunt the
$4,126. With countries GDP development of non-garment
growth rate 7.28%, per capita exports. Also it has to improve
income of USD 1752 and property and land rights
introduction of more than registration systems to protect SOURCE
hundred new Economic Zones, investments. Good governance, The Daily Star
27 March 2018
th
Bangladesh is being placed as political stability, promoting

one of the world’s most mass education and attracting
attractive and exciting places foreign and local investments
for investment opportunities. should be encouraged.
Achieving upper-middle income
The stable macroeconomic status might seem very difficult
situation is an outcome of a for us. However, it would not be
mixture of prudent monetary impossible, if we proceed ahead
and fiscal policies so far in a goal oriented manner. It is

Some Thoughts on Performing Dynamics
in SoCBs
Masih Malik Chowdhury FCA
L
ending is the prime accounting for NPLs mammoth
business of any bank. The chunk. This mainly stems from
efficiency in lending can a relationship groomed over long
bank profit or loss making. The procedures of lending.
lending syndrome in SoCB & Interactions during lending
PCBs are uniquely different process cause many lending to
from each other. Without any be at loss and eventually being
prejudice or so to say doubt we classified as NPL. Such
can safely land on to say PCBs connivance with bankers are
are more efficient in banking not unknown to many. Most
considering it as a business. The often bankers are however
PCBs are smarter in terms of forced to associate them with
loan processing & sanctions. these mega borrowers. This is
The time taken in loan sanctions because a long sanction
by PCBs are much shorter than procedure but not necessarily
SoCB while procedures are also efficient & business friendly for
The Author is a more efficient than SoCBs in borrowers stand as impediment
Chartered Accountant and lending the loans. The loan to timely project
a Fellow Member & application in SoCB takes a implementation. Even during
Past President of the prolonged time with flawed the implementation process of
Institute of Chartered Accountants procedure of check & balance project the borrowers seek
of Bangladesh-ICAB system. Mainly for its longer restructuring or re-phasing. The
time taken compared with time factor for business in the
PCBs, SoCBs due to its borrowers’ projects is very
bureaucratic set up & attitudes important. However, the most
of its bankers are not commonly vital factor is entrepreneurs’
liked as lenders to vision & capacity. SoCB bankers
entrepreneurs. In its process of often make wrong assessment
lending A bank account with a of project. Especially choice of
branch is to be opened & a few sector is not made based on any
months’ transactions are initially sector wise records of business
made to make a prima facie performance. Even the
assessment of would be borrowers’ performance in own
borrowers. The potential bank by studying the pertinent
borrower then applies for loan sector’s loan takers of the Bank.
to that branch as part of the This means historical or
recurrent procedure. A project empirical records of a particular
study of the borrower applicant bank about banking in a sectors’
is also submitted which is a projects by a particular SoCB is
matter of assessment. This seldom made. Moreover, SoCBs
being done by Head office again do neither possess expertise on
is more intense in studies for debt servicing & cash
procrastination. This regenerative capacity of
procrastination often leads to projects. But yet these banks
distorted project planning by have huge amount of loan
the entrepreneurs. sanctions irrespective of any
minimum capability or
This long assessment often mechanism for monitoring loan
makes loan seeking SMEs utilization in these banks.
unviable. The mega borrowers Resultantly the NPL in SoCBs is
are problems for SoCBs

ARTICLE
valuation result into flamboyant collateral

values which are irrationally high. They
are neither independent in doing these
acts. Thus valued assets, as collaterals
for the loans cannot ensure enough
cushion for pay off or recovery of loan by
selling these off. This makes the banks
caught into the hands of mega
borrowers. Borrowers of this type often
have or for that matter make access to
the high ups of government to benefit its
business. Again the lender bank officials
are not capable for personally dealing
with these mega borrowers. These
borrowers often lead to more demands
of loan leading to poor equity vs. debt
ratio adverse for the lender bank. The
more is lenders loans with lesser equity
from owners, the less is borrower’s
keenness in paying it off. Again with more
The valuation of collateral for the debt than equity from borrower the onus
loan in taken as another strong of the lenders gets worse off. This causes
risk to lenders at large. Borrowers only
pitfall. The banks do not mostly benefit out of it. They enforce a sort of
resort to 3rd party valuation. pressure type of things on the bankers in
SoCBs. As there is mammoth gap of
So the sanctioning bank itself make connivance more is lenders equity the
valuations. Just imagine the less the borrowers’ keenness in it to pay
off. Again with more debt than equity
sanctioning lenders’ officials in from borrowers the onus on the lenders
loan processing are doing the gets intensified. This cause risk to lenders
valuations. It leaves immense scope at large. Delinquent borrowers only

benefit out of it. They enforce their
for connivance between lenders connivance sort of things with the
and borrowers. bankers is SoCBs. As there is mammoth
gap of accountability, monitoring &
transparency in loan sanctions the mega
borrowers are always on upper hand. The
35% while it is 7% in PCBs. Around the globe SoCBs for reasons to be unveiled prefer
SoCBs are holding larger segment of NPL than to concentrate lending in Mega rather
PCBs. than SME borrowers. But SMEs would
have been better borrowers due to
The valuation of collateral for the loan in taken as non-concentration of amounts lent.
another strong pitfall. The banks do not mostly
resort to 3rd party valuation. So the sanctioning The assets as collaterals are on many
bank itself make valuations. Just imagine the occasions not non-encumbering. The
sanctioning lenders’ officials in loan processing legal assessments are very weakly made
are doing the valuations. It leaves immense scope which will give an understanding that it is
for connivance between lenders and borrowers. made to give upper hand to defaulted
That is why these valuations are mostly inflated & borrowers. In other words, this practice

Some Thoughts on Performing Dynamics
in SoCBs
The borrowers are not always

limited companies that can
ensure continuance of liability
even after death of the primary
borrower. Thus the lenders have
to take appropriate measures to
prepare for transmission of
loans on death or permanent
disability of primary borrower
while securing the lending. The
uncertainty of transmission of
liability is less in limited
company compared to any
proprietorship.
These are not all exhaustive
number of pitfalls that one can
make the borrowers prepared We live in a perspective with the anticipate. However, we need
for conversion or so to say digitalization data base for early address of these pitfalls
transpired into delinquent information about prospective and as many as possible if not all
borrowers. The documents of borrowers are only away from a
other pitfalls. We must note that
collaterals are often defective & button tipping for all bankers.
the earlier these reforms are
legal aspects are uncovered Yet the SoCBs hardly resort to
brought into, SoCB would
while loans are sanctioned. This information tapping about
sustain ahead on a better
causes prolonged legal potential or applicant borrowers
footing. Our SoCB client base is
remedies for the lending bank. for loans.
yet bigger & they serve the
For qualitative loan or nation in a larger magnitude.
The entrepreneurship
marketing of lending products is
capabilities of borrows are The Boards of Directors (BoD)
a pre-requisite for quality
hardly assessed by SoCBs. This in SoCBs need to be visionary
banking. The PCBs often do it
may be because they do not and the need for futuristic
much faster than SoCBs. The
have such abilities for business changes in banking procedure
SoCBs hardly ever can claim
assessment. Resultantly equity that branch managers have are to be cognized by SoCBs.
part cannot be compromised. approached potential lenders The upcoming digitalization
The philosophy is that no equity for enrollment as borrowers in over the ongoing existing online
participation would mean no regard of qualitative judgments. banking developments must
ownership of borrower. Again The perception about SoCBs cater to the increasing needs of
lenders stake of risk in no equity delinquent practices in loan new generation banking norms.
perspective would be sanction need to be rooted out. Concentration of loan in one
enormously high. It is more This can be done by rebuilding borrower, branch, zone, sector
intensified when SoCB bankers public image of SoCBs. Its or segments of business are to
are professionally well behind bankers are not client friendly. be avoided. In fact, over the
the need of the time. They must Their perception of doing counter or OTC banking is fast
soonest start keeping apart government job is a grant changing. And in 5/10 years HR
from thoughts of conventional deterrent to their improving needs, of banking practices will
banking. In a span of 5/10 years efficiency in banking be replaced by IT backups. The
digital banking will largely pave performance. All the branch soonest SoCBs understand it
in banking arena fully out heads of these banks need to be the faster will it adapt to new
powering recurrent oriented & cautioned that the phenomenal changes.
conventional banking or so to respective branch has to run
say OTC banking. itself on its own income
generation capacity.

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he Institute of Chartered Accountants of Bangladesh (ICAB) is the
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Secretary
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Major Gen. Muhammad Imrul Quayes ndc, psc (retd.)

Secretary
The Institute of Chartered Accountants of Bangladesh
CA Bhaban, 100 Kazi Nazrul Islam Avenue
Kawran Bazar, Dhaka-1215, Bangladesh
Tel: 880 2 9115340, 9612612100, 9117521, 9137847 (Off.)
Fax : +880-2-9125266
E-mail: secretary@icab.org.bd
facebook.com/icabdhaka
For more issues of

The Bangladesh Accountant visit
icab.org.bd

THE INSTITUTE - A BRIEF OUTLINE
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF BANGLADESH (ICAB) IS THE
NATIONAL PROFESSIONAL ACCOUNTING BODY IN BANGLADESH, ESTABLISHED UNDER
THE BANGLADESH CHARTERED ACCOUNTANTS ORDER, 1973 (PRESIDENT'S ORDER NO.
2 OF 1973) FOR THE PURPOSE OF REGULATING THE PROFESSION OF ACCOUNTANTS
AND FOR MATTERS CONNECTED THEREWITH. THE MINISTRY OF COMMERCE,
GOVERNMENT OF THE PEOPLE’S REPUBLIC OF BANGLADESH IS THE ADMINISTRATIVE
MINISTRY OF THE INSTITUTE OF CHARTERED ACCOUNTANTS OF BANGLADESH.
VISION
ICAB members hold a widely respected professional accounting qualification which
supports enterprise, corporate governance and sustainable growth in the business
environment.
MISSION
* To promote and regulate high quality financial reporting and auditing in Bangladesh
* To develop and maintain the competence of professional accountants
* To enhance the reputation of the accounting profession in all sectors of the
economy
VALUES
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* Expertise: To conduct professional responsibilities with a high level of knowledge,
competency and skill
* Transparency: To conduct activities in a clear and transparent way
* Accountability: ICAB members to be responsible for their actions
INTERNATIONAL AFFILIATION
ICAB is an active member of the following international and regional accounting bodies:
* The International Federation of Accountants (IFAC)
* The Confederation of Asian and Pacific Accountants (CAPA)
* The South Asian Federation of Accountants (SAFA)
MoU & MRA
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Arrangement (MRA) with the following national & international organizations:
* MoU with the Institute of Chartered Accountants in England & Wales (ICAEW), UK
* MRA with CPA Ireland
* MoU with CIPFA, UK
* MoU with IFRS Foundation
* MoU for Local Governance Support Project in Bangladesh
* MoU with Office of the Comptroller & Auditor General of Bangladesh (OCAG)
CA Bhaban
100 Kazi Nazrul Islam Avenue, Dhaka 1215

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GLOBAL

RECOGNITION January - March 2018

CPA-Ireland Membership is open to ICAB Members

out of 17 papers of CPA Ireland examination.

Recognition of ICAB Membership by CIPFA, UK

EDITORIAL BOARD CONTACT US

Co-Chairman 880 2 9115340, 9612612100

JANUARY - MARCH 2018 | The Bangladesh Accountant 1

In the quarterly journal articles of

The monthly news bulletin

In addition to these two regular

P17 Arbitrary and Unlawful

P23 Human Resources (HR)

P32 Factors Determining Glass

2 JANUARY - MARCH 2018 | The Bangladesh Accountant

P77 Prospects and Challenges of P126 Bangladesh as Neo-MIC:

P84 Yoon Model and Modified Jones P130 Some Thoughts on

JANUARY - MARCH 2018 | The Bangladesh Accountant 3

However, Bangladesh has to maintain

economic which is encouraging for us. We hope

prospect. ICAB is maintaining strong liaison with

information on Dear valued readers, this is the

permanent Bangladesh has attained the status of

4 JANUARY - MARCH 2018 | The Bangladesh Accountant

for their talented work. I believe Finally, I appreciate support from

Dewan Nurul Islam FCA

JANUARY - MARCH 2018 | The Bangladesh Accountant 5

Md. Rokonuzzaman FCA

6 JANUARY - MARCH 2018 | The Bangladesh Accountant

JANUARY - MARCH 2018 | The Bangladesh Accountant 7

developments until the world

8 JANUARY - MARCH 2018 | The Bangladesh Accountant

Sl. What went court, but by the time they get a

JANUARY - MARCH 2018 | The Bangladesh Accountant 9

our finger towards the 4. Create an environment 9. Engagement partner/

10 JANUARY - MARCH 2018 | The Bangladesh Accountant

Cyber Security in Banks and Financial Institutions

M Jalal Hussain FCA

JANUARY - MARCH 2018 | The Bangladesh Accountant 11

industry, according to Verizon’s cyber-attacks in every year. But the

12 JANUARY - MARCH 2018 | The Bangladesh Accountant

institutions were targeted by a

Financial institutions have

JANUARY - MARCH 2018 | The Bangladesh Accountant 13

that today's approach for cyber

Evidence based analysis in

The National Institute of

14 JANUARY - MARCH 2018 | The Bangladesh Accountant

JANUARY - MARCH 2018 | The Bangladesh Accountant 15

emerging countries face the

16 JANUARY - MARCH 2018 | The Bangladesh Accountant

Arbitrary and Unlawful Attachment of Bank Accounts of

Section 143(2) (a) provides that 3. Appeal of the Assessee for

JANUARY - MARCH 2018 | The Bangladesh Accountant 17

7. Good intention of the Assessee to pay the tax

A guideline in this respect can be available from

Questions Regarding the Actions of

A Bank is the custodian of the money deposited

18 JANUARY - MARCH 2018 | The Bangladesh Accountant

“Where the income

4. KEC International Limited

While considering the stay

JANUARY - MARCH 2018 | The Bangladesh Accountant 19

However, if the authority be made pending previous years without there