Department of Accounting and Information Systems

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Accounting Information Systems of Mobile Telecommunication Companies in Bangladesh
(University of Rajshahi, 2014) Neogy, Taposh Kumar; Saha, Abhinaya Chandra
Mobile telecommunication companies h Ave emerged as an important economic sector in present time and it is adding a lot in boosting up the economy of Bangladesh. The mobile telecommunication companies in Bangladesh are aiming at providing cost effective and quality services to the customer as customer satisfaction is most important for the survival and success of any company. For this purpose, the mobile telecommunication companies need an efficient AIS for providing necessary information to its various users. The user group includes creditors, investors, lenders, regulators, trade union and management and many one who take their necessary decisions based on the information by the annual reports of the companies. Appropriate and efficient AIS is needed by the companies to provide relevant and reliable information to the interested users in time. The appropriate AIS depends on the relevant accounting policies, principles and most importantly the standards set by both national and international bodies. Legal framework of a country gives clues to framing appropriate AIS for an organization. At present AIS bears significance as it helps the management evaluate the past operations, control the present actions and through them to decide the future activities of any organization. The objectives of the study are to know the major characteristics of AIS, analyze the opinions of the respondents regarding the application of legal framework and compliance with accounting standards, judge the efficiency of AIS through selected indicators, identify the factors influencing the efficiency of AIS and analyze the opinions of the respondents regarding the qualitative characteristics of accounting information produced by AIS. There are six mobile telecommunication companies in Bangladesh and researcher has selected two mobile telecommunication companies viz Grameenphone Ltd. and Tele talk Bangladesh Limited for five years starting from 2008 to 2012. Three sets of close - ended questionnaires were used in the light of objectives and hypotheses of the study for the selected respondents. First set is for company executives, second set is for experts in accounting (chartered accountants, cost and management accountants and teachers in accounting) and third set is for security consultants. The present study is based on both primary and secondary data. The secondary data have been collected from the audited annual reports of the selected companies and primary data for the purpose of the present research study have been collected from 195 respondents consisting of 60 chartered accountants (CA), 50 cost and management accountants (CMA), 30 teachers in accounting (Acad.) and 55 security consultants (SC). Likert five point rating scales are used in two sets of questionnaire for measuring the opinions of the respondents. For judging the reliability of data the reliability test is done through Chronbach Alpha test and Split-half test. After obtaining the data from the different sources, various statistical tools like mean values, standard deviation, coefficient of variation, t-test, Chi-square test and ANOVA test have been used to analyze the collected data. The AIS of the selected companies is fully computerized and accounting software is used for recording transactions, processing of transactions and preparing the financial statements to the interested users. The financial statements are prepared on going concern basis under the historical cost convention using Generally Accepted Accounting Principles (GAAP) in accordance with accounting standards, the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws in Bangladesh. The selected companies follow the provisions of IAS/BAS 1, 2, 7, 8, 12, 16, 17, 18, 21, 23, 24, 32, 34, 37 and 38 respectively and also follow the provisions of International Financial Reporting Standards (IFRSs)/Bangladesh Financial Reporting Standards (BFRSs) for preparing and presenting the financial statements. In the evaluation of the operating results of the selected companies, it is evident that the Company # 1 could earn good profit during the study period but the performance of Company # 2 is not satisfactory because it has been continuously facing loss for the last several years with the exception of 2011. The operating performance of Company # 1 is better than that of Company # 2 during the study period. Some hypotheses have been developed regarding the operating results of the selected companies and all hypotheses are rejected which means that there is significant difference between the operating results of the selected companies. In the analysis of the opinions of the respondents, it is evident that the 50.00% of the respondents think that the selected companies moderately apply legal framework for preparing the financial statements and the null hypothesis is accepted which means that there is no significant difference of opinions among the respondents regarding the application of legal framework for preparing the financial statements of the selected companies. It is also evident that 65.00% of the respondents think that the selected companies moderately comply with accounting standards for preparing the financial statement and the null hypothesis is rejected which indicates that there is significant difference of opinions among the respondents regarding the degree of compliance with accounting standards for preparing the financial statements of the selected companies. To evaluate the efficiency of AIS of the selected companies, some indicators have been identified. It is evident that the 91.43% of the respondents opine that the effective internal control system, 62.86% of the respondents think that the proper security measure, 65.71% of the respondents think that good documentation, 60.00% of the respondents opine that the separation of operation from accounting, 80.71% of the respondents think that the extent of disclosure, 63.57% of the respondents opine that the cost effectiveness, 56.43% of the respondents think that the flexibility to meet future needs, 47.14% of the respondents reveal that the processing power of accountants and 79.29% of the respondents reveal that the independent internal and external audit are important way to judge the efficiency of AIS. It is also evident that the 40.71% of the respondents think that the all indicators are important to judge the efficiency of AIS of the selected companies. In addition, the 56.92% of the respondents opine that accounting information produced by AIS is moderately adequate and the null hypothesis is accepted, 60.00% of the respondents think that the accounting information produced by AIS is moderately informative and the null hypothesis is rejected and 57.95% of the respondent’s state that the accounting information produced by AIS is moderately concise and the null hypothesis is accepted. It is found that there is no significant difference of opinions among the respondents regarding adequacy and conciseness of accounting information produced by AIS and there is significant difference of opinions among the respondents regarding the informativeness of accounting information produced by AIS of the selected companies. The study shows that 57.14% of the respondents opine that the size of the company, 44.29% of the respondents think that the earning of the company, 78.57% of the respondents reveal that the availability of trained accountant, 80.00% of the respondent state that the internal control system, 52.86% of the respondents think that the internal audit, 47.14% of the respondents opine that the internal check, 72.86% of the respondents reveal that the attitude of management, 51.43% of the respondents think that the organizational structure, 45.72% of the respondents think that the resources of the company and 69.29% of the respondents opine that the good use of information technology greatly influences the efficiency of AIS and the hypotheses are accepted which means that there is no significant difference of opinions among the respondents regarding these various influencing factors of the efficiency of AIS of the selected companies. It is found that 36.43% of the respondents think that the age of company moderately influences the efficiency of AIS and the null hypothesis is accepted which indicates that there is no significant difference of opinions among the respondent regarding the age of company as an influencing factor of the efficiency of AIS. It is also found that 42.14% of the respondents opine that the rank of responsible executive moderately influences the efficiency of AIS and the null hypothesis is rejected which means that there is significant difference of opinions among the respondent regarding the rank of responsible executive as an influencing factor of the efficiency of AIS of the selected companies. The study also shows that 54.36% of the respondents think that the accounting information produced by AIS of the selected companies is moderately relevant, 55.39% of the respondents opine that the accounting information is moderately reliable, 42.05% of the respondent state that the accounting information is moderately useful, 50.25% of the respondents think that the accounting information is moderately understandable, 51.79% of the respondents reveal that the accounting information is moderately comparable and 53.85% of the respondents think that the accounting information is moderately consistent and the null hypotheses are accepted which indicate that there is no significant difference of opinions among the respondents regarding the various qualitative characteristics of accounting information produced by AIS and disseminated in the annual reports of the selected companies. Based on the study findings, researcher suggests that the transparency of financial statements shown in the annual reports issued by the selected companies should be ensured. The preparation of the financial statements must ensure the various qualitative characteristics of accounting information. The strict compliance with the accounting standards, the Companies Act, 1994, the Securities and Exchange Rules 1987, the Income Tax Ordinance 1984 etc. should be monitored by BSEC. The accountants who are responsible for performing the various activities of AIS should be trained properly so that AIS can deliver relevant information for all concerned. Accounting information should be more timely and well-structured for various interested users so that they can make effective, dynamic decisions. Internal control activities, functions of audit committee, management control activities and corporate governance etc. should be coordinated. ICAB and ICMAB may try to organize more seminars for developing AIS, MIS, Decision Support Systems, Executive Information System and Expert System etc. for our business organizations.
An Analysis of Productivity and Profitability of Islamic Banks in Bangladesh
(University of Rajshahi, 2009) Uddin, Mohammad Main; Hossain, Syed Zabid; Harun, Md. Abdullah Al
Commercial banks are the heart of the financial market as they mobilize scattered deposits of a country for investment in productive sectors. The banking industry has become a catalyst for growth and development of Industry and Commerce. Banking sector of the country has registered a high growth and achievements due to the promulgation of Banking Companies Ordinance in 1983 and Banking Companies Act 1991. The rapid growth in the number of private banks and competition among them brought in both quantitative and qualitative changes in their functioning and approach towards socioeconomic development of the country. At present there are 49 local commercial banks in Bangladesh; of which 7 are full-fledged Islamic Banks and 42 are conventional Banks. Islamic banks are the major constituents in the banking structure of the country and they have been playing an important role in the financial market in terms of deposit mobilization, investment and non investment services. Even some traditional banks have changed their business into Shari'ah based banking inspired by the success of Islamic banking in the country. The combined growth rate of deposits and investments of all Islamic Banks is over 30 percent as against 16 percent growth of deposits and 13 percent of advances (investments) of the banking sector as a whole. However, Islamic Banks in Bangladesh have been facing numerous problems and challenges despite their initial success. Growth brings new opportunities as well as problems. Now the financial market has become more competitive. It is alleged that there is discrimination between Islamic banks and traditional banks and there is no level playing field for Islamic banks in Bangladesh. Moreover, increased competition, absence of separate Islamic financial market and instruments, lack of separate legal framework and government patronage are the leading causes for low productivity and low profitability of Islamic banks in Bangladesh. It is urgently felt that the productivity and profitability performance of Islamic Banks in Bangladesh should be evaluated over a number of years to have a clear idea about their sustainability in the long run. With this end in view the present study has examined the productivity performance and operational efficiency of Islamic banks in Bangladesh so that corrective measures can be taken in time to enhance their level of efficiency and effectiveness. The beginning year of the study is 1997 and the ending year is 2006. In the beginning year of the study there were only four Islamic banks in Bangladesh, those are Islamic Bank Bangladesh Ltd (IBBL), Oriental Bank Ltd (OBL), Al Arafah Islamic Bank Ltd (AIBL), and Social Investment Bank Ltd (SIBL). These four Islamic banks have been selected for this study. The study has been based on both primary and secondary information. Financial tools like ratios and statistical tools like average, standard deviation, coefficient of variation, maxima, minima, simple and compound growth rate etc have been used along with productivity and profitability models. The study is divided into three parts and eight chapters. The first part contains concepts, ideology, growth and development of Islamic banking in Bangladesh along with methodology of the study. The second part contains the main corps of the study focusing on productivity and profitability performance of Islamic banks in Bangladesh. The third part contains only one chapter that is summary of main findings, conclusions and recommendations. In the recent past there has been increasing religious awareness throughout the Islamic world, which has demanded the reorganization of all social institutions according to Islamic principles, norms and values. An Important change is also taking place in the financial system of the Muslim countries including the banking sector. Much effort has been devoted to eliminate non-Islamic elements from the functioning of the banking system. Islam allowed business within Shari'ah guidelines but prohibited interest or usury. Thus a separate banking system is needed for the Muslims, which is totally free from interest and based on profit and loss sharing. The story of interest-free Islamic banking begins here though the concept of Islamic banking was originated at the time of Prophet Muhammad (SM). In Muslim communities, limited banking activity, such as acceptance of deposits, goes back to the time when Prophet Muhammad (SM) was still alive. People usually deposited their money with Prophet (SM) or with Hazrat Abu Bakar (RA). Prophet (SM) also introduced the system of Bait al-maal or public treasury for the collection and disbursement of revenues among the displaced Muhajirs and the poor and needy Ansars. However, from the early days of the Umayyad, the Bait al-maal started playing the role of an agricultural credit bank and also a commercial bank. Certain forms of banking activity including deposits in current account and use of cheques were known to the people of Baghdad, Damascus, Fez and Cordoba at about 1200 years back. Also, intercity money transfers were a known practice between cash depositors and practitioner Bankers who also used to be money exchangers at the same time. But the emergence of modern Islamic banks was the result of a widespread awareness and concern among scholars that there were increasing numbers of Muslims who were faithful to their religious beliefs refused to bank with the conventional interest-based commercial banks. These intellectuals came up with a banking system that was in conformity with the Islamic injunctions following the principle of profit and loss sharing. The history of interest-free modern banking could be divided into two parts. First, when it was an idea; second, when it became a reality. During seventies, eighties and nineties interest-free banking attracted much attention because of the emergence of young Muslim economists. Works specifically devoted to this subject began to appear in that period. Early eighties saw the institutional involvement. A series of conference, seminar, and symposia were held during seventies and eighties on different aspects of Islamic banking. That was the period of formulating conceptual framework for Islamic banking. While in Bangladesh two professional bodies namely Islamic Economics Research Bureau and Bangladesh Islamic Bankers' Association made significant contributions towards the introduction of Islamic banking in the country. Their professional and right-thought activities were streamlined by a number of enthusiastic businessmen in Bangladesh. At last, the long drawn struggle to establish an Islamic bank in Bangladesh became a reality with the establishment of Islami Bank Bangladesh Limited in March 1983 and that was the beginning of the new era- the era of Shari'ah based interest free PLS banking. At present there are seven Islamic banks in Bangladesh. Moreover, some other newly established traditional private banks have also set up some Islamic Banking branches along with their traditional banking. Islamic banks have occupied a large portion of the money market of the country and achieved significant advancement to evolve into a comprehensive Islamic banking system. One of the major objectives of Islamic banks in Bangladesh is to increase their number of branches and establish a banking network nationally and internationally for extension of banking services to their clients. In this context the growth in the number of branches have been examined and found that all the Islamic banks have been gradually increasing their branch network throughout the country and most of them have been growing more than the industry average. The growth trend in most of the variables like deposit, investment, spread, investment income, non investment income, total income, net profit, current assets, fixed assets, earning assets, total assets, was significant over the period in all the selected Islamic banks except in Oriental Bank Ltd. Thus with some exception, the growth in different variables of Islamic banks in Bangladesh is positive. Another parameter of testing the effectiveness and efficiency of a commercial bank is productivity performance. It is found that the amount of deposit, investment, investment income, non investment income, total income, spread, and net profit per branch and per employee had a fluctuating but growing trend in most of the Islamic banks. Contrarily, non investment expenses, manpower expenses, burden, and total expenses per branch and per employee had also a growing trend, which would have affected the profitability of Islamic banks in Bangladesh. But in some cases, as for example in OBL, the productivity performance was found to be negative. Like productivity, profitability is an indication of the efficiency with which the operation of an enterprise is carried on. The ultimate objective of a bank is to improve profitability by ameliorating efficiency and productivity. The more is the operational efficiency and effectiveness, the more is the productivity and consequently the more is the profitability. Considering all the indicators of profitability such as net profit as percent of total deposit, total income as percentage of total assets, net profit as percentage of spread, profit paid as percentage of total expenditure, and net profit to total investment, it is found that the profitability performance of AIBL was the highest followed by IBBL, and SIBL. However, the profitability performance of OBL was either negative or very low during the whole period of review. Thus, on the whole, the operational performance of most of the Islamic banks in Bangladesh is highly promising. But still there is ample potential for improving the profitability of Islamic banks in Bangladesh through better deployment of fund, reducing nonperforming assets, controlling of non investment expenses, improving transparency and accountability of the management, and increasing the competitive edge to compete successfully with the traditional banks working in the country.
An Exploratory Study of Islami Bank Bangladesh Ltd: Entrepreneurship, Investment and Poverty Alleviation Perspectives
(University of Rajshahi, 2002) Mazid, Md. Abdul; Harun, Md. Abdullah el; Hossain, Syed Zabid
One of the significant developments in the Islamic financial system in the last three decades has been the emergence of a number of Islamic Banks in almost all the Muslim as well as in some non-Muslim countries. The motivation for the establishment of these institutions came from a desire to formulate and recognize their social, economical and in particular financial activities on a non-riba (interest) basis. Islam, as a complete code of life, encourages all types of business activities to achieve material well being. Of course, these attempts have to be based on the principles of “Islamic Shariah". The vice associated with the institution of interest ( riba) is clearly a means of exploitation. Islam is dead against riba (interest). According to Islamic Shariah Muslims are not allowed to give or take riba in any financial transaction. Before the emergence of Islamic Banks, Muslims were in a great problem to save money as well as to take loan from western style banks. In both the cases they had to face the problem of interest. Their Islamic believes prevented them from dealing that involved interest or usury. Yet Muslims need banking services as much as anyone needs and for many purposes, to finance new business ventures, to buy a house, to buy a car, to facilitate capital investment, to undertake trading activities and to offer a safe place for savings. In no way Muslims are averse to legitimate profit as Islam encourages people to invest money in halal business ventures instead of keeping their money idle. Making money from money is not acceptable in Islam. The Holly Qur’an makes it very clear that whatever is above the loaned amount one has no right to charge it or pay it. As far as financial dealings are concerned any increase on the original loan money, which is predetermined, whether it is simple or compound, is riba. Again, any increase whether it is borrowed for business purposes or production and consumption purposes, weather it is among the individuals or between people and government or government and government, is riba and forbidden in Islam (Ahmed, 1995: 3). Money is only a medium of exchange, a way of defining the value of a thing. It has no value in itself and therefore, should not be allowed to give rise to more money through fixed interest payments, simply being put in a bank or lend to someone else. The human efforts, initiative and risk involved in a productive venture are more important than money. Money is a potential capital rather than capital, meaning money becomes capital only when it is invested in business. Thus money advanced to a business as loan is regarded as debt of the business and not entitled to any return (i.e. interest). In Islam money presents purchasing power which is considered to be the only proper use of money. This purchasing power without undergoing the intermediate step of it being used for the purchase of goods and services. (Nida-ul-Islam, 1995). Muslim economists have pointed out that it is an historical accident that interest has become the kingpin of modern banking. The practice of interest has been condemned by foremost thinkers in human history and by all Biblical religions. Aristotle also criticized the "barren" nature of money and vehemently commented on the institutionalization of interest, which he described as “birth of money from money". Among the followers of Islam the institution of interest has always been regarded highly ignoble because the holly Quran strictly prohibits interest based transactions of all forms in view of divine injunction against riba.
Attitude of Women Beneficiaries towards Policy Management of NGOs in Bangladesh: Conflict and Harmonization
(University of Rajshahi, 2005) Nazneen, Chitralekha; Islam, Mohsin-Ul
The title of dissertation is "Attitude of Women Beneficiaries towards the Policy Management of NGOs in Bangladesh: Conflict and Harmonization". The main theme of the research is, to assess the attitude of the women beneficiaries towards the policies of micro credit program. Literature reveals that there are different and varied studies on micro credit program and women but so far my knowledge goes no such study has been done on the assessment of attitude of the women beneficiaries towards the policy management of the micro credit program. Three NGOs of Bangladesh ASA, BRAC and TMSS have been selected for the study. The research was conducted on 450 women beneficiaries, taking 150 women beneficiaries from each organization. Bagha upazila and Boalia thana under Rajshahi district were selected purposively for the study. Primary and secondary data were collected for the research. Primary data has been collected directly from the women beneficiaries and management of the three NGOs through interview and secondary data has been collected from manuals, annual reports etc. During the collection of primary data structured questionnaire has been used and Likert Scale has been applied to assess the answers so that attitude of women beneficiaries towards the policies of micro credit program can be assessed. Besides these face-to face interviews with the women beneficiaries and the management of the NGOs also have been done. In the study, socio economic profile of the subjects i.e. women beneficiaries covered under the study has been assessed and the existing policies of the micro credit program have been identified and attitude of women beneficiaries has been examined and how far the policies of micro credit program have been implemented in the field level has been observed. It is also presented in the study that whether the women beneficiaries have any adverse attitude to a • particular policy and whether they want any change in it and the reaction of the management on the issue. The opinions of top management of three NGOs have been taken through face to face interview on only those policies where adverse attitude of the women beneficiaries are found. Lastly, the stand of the women beneficiaries and NGO authority has been presented and some recommendations have been provided for harmonization. Descriptive and empirical statistical tools have been used for data analysis. It is found in the study that women beneficiaries keep positive or neutral attitude to most of the policies of micro credit program. There are few policies like single membership from a family, providing undertaking for credit, credit utilization, advance repayment and savings policy on which. Women beneficiaries have moderately adverse attitude. But management of the NGOs inform that they are considering the issue with importance and they would take steps in near future only when they could determine the extent of change that they could able to bring………………………….
Compliance of Financial Disclosure in Corporate Annual Reports of Banking Sector in Bangladesh
(University of Rajshahi, 2009) Ahmed, Alim Al Ayub; Dey, Madan Mohan
Our present study on "Compliance of Financial Disclosure in Corporate Annual Reports of Banking Sector in Bangladesh" has been directed towards analyzing and examining the quality and quantity of disclosure as well as evaluating the opinion of the experts' i.e., Financial Analyst, Professional Accountants, Stock Brokers, Accounting Professors and Bank Loan Officers on the qualitative characteristics of corporate financial disclosure. In order to provide a short review of the main literature being relevant to the present study a review of related works has been made. This review has provided a framework for the present study as well as assistance in developing a research methodology. We have also made an attempt to examine the extent of disclosure of the sampled bank under study. The study is an attempt to examine empirically the association between a number of corporate attributes and levels of disclosure in corporate annual reports of listed banking companies in Bangladesh. The association between the extent of disclosure and various corporate characteristics was examined using multiple linear regression models. We have also probed into the causes of time lag for the publication of annual reports by the sample units. Finally, we have suggested ways and means to improve the quality of disclosure, the level of understanding of the financial statements. We have prepared a methodology accordingly for collecting the primary and secondary data. A questionnaire has been developed to collect primary data. Secondary data have been collected mainly from the annual reports of the sample banks. A disclosure index comprising 144 items of information, which are expected to be disclosed in corporate annual reports in the sample companies, has been developed. Un-weighted disclosure index (UDI) was applied to the corporate annual reports for a sample of 12 Bangladeshi banking companies, for the year 2002-2006. We have analyzed the data with certain statistical tools. In order to test whether there are significant differences between the opinion of the respondents, we conducted ;(" test using SPSS software. In order to see whether there is significant difference in disclosure score among the sample firms and among the sample years we conducted t tests choosing 2 samples at a time i.e., using SPSS Software we conducted Paired Sample test. The corporate attributes considered are size peroxide by total assets (TA), gross revenue (GR) and number of branches (NOB), profitability peroxide by EPS, ROA, ROI and net profit margin (NPM), credit deposit ratio (CDR), capital adequacy ratio (CAR), debt equity ratio (DER) and shareholder's risk ratio (SRR). UDI has been arrived at by aggregating the number of disclosed items in each corporate annual report by using a dichotomous approach where a bank will be awarded '1' for disclosing an item and if not, has been awarded 'O'. In order to identify the determinants of disclosure, regression analysis, multiple linear regression techniques have been used. We have analyzed empirically the relationship between the Disclosure Score and the several company characteristics regarding timeliness of the sample banks. We have found that there are significant differences in disclosure score among the sample banks. The results of t test reveals that t values are significant in 44 of the cases out of 66 cases i.e., in 66. 67% of the cases. In case of the opinions of respondents regarding compliance of IASs by the banking companies, the study revealed that a significant difference among the opinions of respondent groups exists. So, the null hypothesis was rejected at 0. 014 level of significance. The study has reported the results of multiple linear regressions to test the association between a number of corporate attributes and the extent of disclosure in corporate annual reports of banking sector in Bangladesh. The results have shown that disclosure levels are associated with some company characteristics. Only two variables those were found to be significant in determining disclosure levels are return on assets and capital adequacy ratio. The return on investment showed significant but relatively weaker association. The other variables were found to be insignificant in explaining disclosure. The result of regression timeliness has revealed significant influence of audit lag on disclosure at 0. 008 level in 2003 and in that the multiple independent variables also have shown significant influence at 0. 035 level. From the results of this study the following conclusions can be drawn. There appears to be an unusual audit delay made by the Bangladeshi listed banking companies soon after the balance sheet date. With regard to timeliness as a qualitative characteristic of financial statements, this evidence can be regarded as unsatisfactory. The findings of this study may be generalized after taking into consideration its limitation. In view of the emerging importance of fair disclosure in financial reporting, we observe that the users are likely to procure decision oriented information from such narrative disclosure. In the concluding word, it is hoped that this thesis has made a contribution to knowledge in the field of overall financial reporting and in particular in understanding of financial accounting issues of banking companies in developing countries. The findings of this study may be generalized after taking into consideration certain limitations. This study considers the annual reports for only five years. This study does not consider non-listed, non-financial companies. This study concentrates on a particular industry type. Further research can be undertaken to measure the extent of disclosure longitudinally to determine whether quality of disclosure has improved over time. Further research can be undertaken taking into consideration both groups of companies (listed and non-listed or financial and non-financial) and can be undertaken based on multi industry types.
Corporate Governance of Publicly Traded Manufacturing Companies in Bangladesh
(University of Rajshahi, Rajshahi, 2020) Maniruzzaman, Md.; Hossain, Syed Zabid; Sayaduzzaman, Md.
Corporate governance has become a burning issue in the corporate finance literature and draws attention from corporate policymakers around the globe owing to many scams and collapses recorded in corporate houses. CG mechanisms act as a guide in the hands of corporate policymakers to regulate corporate entities and enhance corporate performance. Many studies have been conducted on corporate governance issues using a developed country setting but a few studies are available in the literature that investigated corporate governance issues using the developing country setting. The population of this study has included all the DSE listed manufacturing companies from 2006-17. BSEC promulgated the corporate governance code of best practice in 2006 and revised it later in 2012. Hence, the study tried to recognize the impacts of CG mechanisms on performance by dividing the study period into two stories, the first one from 2006-11 and the other one from 2012-17. The research framework explains how CG mechanisms- internal and external-can influence corporate financial performance. The internal corporate governance mechanisms are board size, board independence, board audit committee size, female directorship, CEO duality, and ownership concentration. The external corporate governance mechanisms are institutional ownership, financial leverage, and SEC guidelines. The control variables are the firm size and firm age. The dependent variable is corporate financial performance measured by Tobin’s Q and ROA. This study is empirical in nature and explains several theories, such as agency theory, institutional theory, stakeholder theory, resource dependency theory, stewardship theory, political economy theory, social theory, trade-off theory, and M-M theorem. It used the quantitative research method and based mainly on the premises of agency theory, though some other theories mentioned above help develop the hypotheses.-- Regarding internal CG mech
Credit Facilities for the Poorest of the Poor : A Study on Grameen Bank in Bangladesh
(University of Rajshahi, 2000) Uddin, Mohammad Main; Hossain, Syed Zabid
Bangladesh has a vast poor population and has grown alarmingly since independence. They are not only extremely poor but are virtually shelter less on a regular basis (Rahman, 1989-90: 381). The World Development Report 1990 presents daily calorie supply per capita for various countries. Among the 38 low-income countries, Bangladesh with only 1927 calories supply per day per capita occupies ninth position from the bottom (Momin, 1992: 9). A recent survey showed that 64 percent of surveyed household had difficulty in satisfying basic needs, 70 percent of those experienced it on a prolonged basis (BBS, 1995). Widespread poverty, malnutrition and hunger have also been reported by a village survey (1989-90) 01 BIDS. Using head count ratio, it was found that 60 percent of the sample were below poverty line. This poor segment of the society is purpose
Default Culture of the Nationalised Commercial Banks and the Private Commercial Banks during Last Two Decades: A Comparative Study
(University of Rajshahi, 2009) Begum, Rukshana; Saha, Abhinaya Chandra; Alam, Md. Shah
In the context of Bangladesh, presently the magnitude of loan default is quite enormous. It has been riddled with high default rates leading to increasing default culture and deteriorating customer service standards, low income rate, corruption, political interference and lack of productive utilization of available resources. The achievements of the banking system arc being overshadowed by staggering the volume of default loans and even threatening the existence of the banking system at this moment. As the 'default Culture' is a sensitive issue there are very limited writings on it. As a result, this field has attracted the attention of the researcher and academicians in recent years. The present chapter attempts to review some of the important literature relevant to the present study. 2.1. Review of Literature A study on debt default in Bangladesh has been carried out by a team led by Sobhan (1991) titled "Debt Default to the Development Finance Institution: The crisis of State Sponsored Entrepreneurship in Bangladesh': The study has, however, limited its scope to Development Finance Institutions (DFI). In an attempt to look at the social background of the borrowers from DFI, the study used the data available from application forms and did not supplement it by an in-depth interview of a structured random sample of entrepreneurs. The conclusion of the study is that the borrowers are relatively new first generation, enter in the business world after the liberation of the country without useful experience of running a modern enterprise for any significant length of time. According to them, the borrower groups could be broadly classified as industrialist-cum-traders, traders, civil or military bureaucrats and professionals and service holders. These borrowers groups accounted for 34.2%, 34.3%, 16.44% and 12.12° 10 respectively. The large scale lending to private entrepreneurs started in the second half of the 1970s and the 1980s. Not only that these new class of entrepreneurs lacked experience, the credit-worthiness measured in terms of loan-asset ratio indicated high degree of pervasive dependence on DFI loanable fund which is ultimately guaranteed by tax payers through the government. In this context, it was noticed that in nearly two-thirds of these (entrepreneurs) family controlled or their friends controlled business, the age of the managing directors was around forty or less and nearly two thirds of the entrepreneurs had five years or less working experience. The authors found that as of end of 1980-81, only about 6% of firms paid their debt liabilities to the two DFis fully, 27.5% firm paid less 10% of what was due and 78.6% firms had substantial overdue loan. The study further concluded that no sector stood out as having a noticeably good or bad record of debt repayments. After 1981-82 and till 1984-85, the general repayment performance fell and repayment by private sector was markedly worse. By 1985, it was found that concentration of overdue loan in these two DFis was with 45 top defaulting projects i.e., few influential business house. By 1987 loan recovery situation did not improve. One conclusion that emerged from the study was that the economic factors did not meaningfully explain the default phenomenon…………………………………………….
Financial Reporting Practices in Private Sector Commercial Banks of Bangladesh
(University of Rajshahi, 2014) Rahman, Md. Tahidur; Uddin, Mohammad Main
Banks as the most important functionary of the financial system play a dynamic role in the economic development of a nation through mobilization of savings and allocation of credit to productive sectors. Most individuals and organization make use of banks either as depositor or borrow or investor. Hence, there is a considerable and wide-spread interest in the well-being of banks and in particular their risks, solvency, liquidity and profitability. It is expected that these aspects of banks will be disclosed fairly and timely basis through financial and other reports prepared by the management of the banks so that the users of these reports can make wile decisions. The present study on Financial Reporting Practices in Private Sector Commercial Banks of Bangladesh has been conducted to evaluate the accounting and reporting practices of the banking sector in private sector. Accounting and reporting practices are guided by a multiplicity of rules, regulations, and professional requirement and also depends on the willingness of management. The objectives of the study were: to identify the reporting requirements of private sector commercial banks in Bangladesh; examine the extent of disclosure in the financial reporting by private sector commercial banks in Bangladesh; examine the consistency of disclosure among different categories of information; examine the difference between the reporting practices of Islamic and Conventional Private Commercial Banks; determine the factors influencing the extent of disclosure in the annual reports of listed Commercial Banks in Bangladesh; and provide constructive suggestion for better financial reporting of the Banking sector on the basis of the findings of the study. In examine the legal requirements of financial reporting; it has been found that The Companies Act, 1994 and The Bank Companies Act, 1991 plays the most vital role in financial disclosure of banking companies in Bangladesh. In addition, banks in Bangladesh are bound to follow the circulars issued by Banking Regulation and Policy Departments (BRPD) of Bangladesh Bank (BB) and The Bangladesh Securities and Exchange Commission from time to time. Securities and Exchange Rules, 1987 requires compliance with IASs/IFRSs as adopted in Bangladesh (these are known as Bangladesh Financial Reporting Standards and Bangladesh Accounting Standards). Among the IASs/BASs and IFRSs/BFRSs IAS-1: Presentation of Financial Statements” and “IFRS-7: Financial Instruments: Disclosure” are the widely followed standard in financial reporting of private sector commercial banks in Bangladesh. To examine the extent of disclosure in financial reporting by private commercial banks, five years’ annual reports of six sample banks that cover about 27.5% of the eligible population were studied by using a researcher developed Unweighted Disclosure Index (UDI) that contains 247 disclosure items and follows the dichotomous method where one (1) is given for any disclosed item and zero (0) is given for any undisclosed item of information incorporated in the disclosure index. Empirical findings from the analysis of the annual reports, on the basis of disclosure index, reveal that the mean disclosure of five years is 76.18 percent which was 67 percent in 2008 and 84.6 percent in 2012. The trend shows that the mean disclosure score of the banking sector is increasing. However, the rate of its increase from year to year is very high with a yearly average rate of increase 6.02 percent. The average size of annual report in terms of number of pages was increasing from year to year to a significant extent. The average number of pages in the annual reports of the sample banks was 155.2 pages in 2008 which became 330.6 pages in 2012. On the other hand, it has been observed that in 2008 about 66.67% of the banks used Bengali version beside the English version which was constant in 2009 and it gradually decreased to only 16.67% in 2012. The ranking of the banks on the basis of overall disclosure level features three banks topping the list, they are: Prime Bank Limited with a score of 87.85 percent followed by Islami Bank Bangladesh Limited with a score of 81.86% and then Bank Asia Limited with a score of 77.81 percent. But still there are some mandatory items undisclosed by the banks in Bangladesh and the mean disclosure percentage is 76.18% which implies that there are still some scopes of improving disclosure percentage in private sector commercial banks in Bangladesh. Paired sample t-test rejects the null hypothesis-1 (HO1) that there is no significant difference in the level of disclosure among the Private Sector Commercial Banks in Bangladesh. The paired sample t-test among the disclosure of different years, especially the years before and after 2010, rejects the null hypothesis-2 (HO2) at 5% level and accepts alternative hypothesis that says “There is a significant difference between the disclosure percentages between the periods before and after the supersession of BAS-30 by BFRS-7 in 2010” Among the ten categories of disclosures, a very high degree of consistency was found in the disclosure categories related to basic financial statements of which the highest consistency was seen in “Income Statement Items and Appropriation of Profit (ISA)” category. The minimum percentage of this category is 92% and the maximum is 100% while the average of this part is the highest 96.8% the standard deviation was the lowest 2.44. On the other hand, the highest standard deviation (24.29) was seen in Financial Statements (FS) category; therefore, it was the most inconsistent part of the annual reports of banking sector. Next to this the inconsistent part is General Corporate Information (GCI) category having the minimum 40.63%, maximum 100%, mean 74.79% and standard deviation of 17.11%. The paired sample test among disclosure percentage of different parts of annual report shows that 36 pairs (80%) are statistically significant difference at 95% level of confidence among the pairs. It rejects the null hypothesis-3 (HO3) and concludes that there is a significant difference among the different categories of information disclosed in the annual report of the Private Sector Commercial Banks in Bangladesh. The descriptive statistics of both the Conventional and Islamic banks indicates that Conventional banks had the higher percentage of disclosure 78.41% which was 73.95 in Islamic banks. In order to test hypothesis four, independent samples test of different disclosure categories between Islamic and Conventional banks were conducted. The test accepts null hypothesis-4: “There is no significant difference between the financial reporting practices of Islamic Commercial Banks and that of Conventional Commercial Banks in Bangladesh” at 95% confidence level. In the regression model Overall Disclosure Index (ODI) was the only dependent variable and there were eight independent variables. The model summary in Table-6.19 shows the F-Statistics 12.647 at p < 0.001 which indicates the model as a whole was well specified. The t-statistics were positive for log total asset (LTA), Earnings per Share (EPS), Debt equity ratio (DE), and Capital adequacy ratio (CAR) and negative for Log shareholders (LSH), Return on Equity (ROE), Credit deposit ratio (CD) and Listing age (LA). Log total asset (a size variable) and the listing age were the only two variables that were significantly associated with accounting disclosures at p < 0.01. The other variables, LSH, ROE, CD, DE, and CAR were not found to have explanatory power. Therefore, the null hypothesis-5 is rejected and the alternative hypothesis is accepted that there is a significant association between the extent of disclosure and some selected corporate attributes of Private Sector Commercial Banks in Bangladesh. Though, the impacts of all the variables are not equally significant. The study recommends that adequate steps should be taken by regulatory bodies to ensure full compliance with relevant accounting disclosure requirements applicable in Bangladesh; The Institute of Chartered Accountants of Bangladesh (ICAB), should be given the regulatory power that may results in compliance of reporting and quality disclosure in annual report of the companies; Those who abide by the regulatory and other reporting requirements should be awarded, whereas stern actions should be taken against the culprits in order to ensure that all listed companies comply with the mandatory accounting standards in Bangladesh; the high degree of compliance and disclosure can be related to low disclosure costs which could have resulted by giving tax shield on printing cost of annual reports. All the banks should disclose the compliance status of both the National and International Standards that will in turn enhance the confidence among international users of financial reporting. This will make the financial statements comparable and will, therefore, enhance global competition, inflow of foreign direct and indirect investment, and international listings. In order to enhance the quality and transparency of financial reporting, which is imperative to build up the confidence of a large variety of users (like investors, depositors, regulators etc.); banks should disclose all the necessary information fairly. Besides mandatory disclosure requirements, additional information should be disclosed voluntarily so that the users can take prudent decisions. The study will at least give an idea of how the banking sector of Bangladesh specially the listed private sector commercial banks are disclosing their financial information. The scope of the study can be expanded by including unlisted banks, nonbank financial institutions, manufacturing companies etc.
Financial Reporting Practices in Private Sector Commercial Banks of Bangladesh
(University of Rajshahi, 2014) Rahman, Md. Tahidur; Uddin, Mohammad Main
Banks as the most important functionary of the financial system play a dynamic role in the economic development of a nation through mobilization of savings and allocation of credit to productive sectors. Most individuals and organization make use of banks either as depositor or borrow or investor. Hence, there is a considerable and wide-spread interest in the well-being of banks and in particular their risks, solvency, liquidity and profitability. It is expected that these aspects of banks will be disclosed fairly and timely basis through financial and other reports prepared by the management of the banks so that the users of these reports can make wile decisions. The present study on Financial Reporting Practices in Private Sector Commercial Banks of Bangladesh has been conducted to evaluate the accounting and reporting practices of the banking sector in private sector. Accounting and reporting practices are guided by a multiplicity of rules, regulations, and professional requirement and also depends on the willingness of management. The objectives of the study were: to identify the reporting requirements of private sector commercial banks in Bangladesh; examine the extent of disclosure in the financial reporting by private sector commercial banks in Bangladesh; examine the consistency of disclosure among different categories of information; examine the difference between the reporting practices of Islamic and Conventional Private Commercial Banks; determine the factors influencing the extent of disclosure in the annual reports of listed Commercial Banks in Bangladesh; and provide constructive suggestion for better financial reporting of the Banking sector on the basis of the findings of the study. In examine the legal requirements of financial reporting; it has been found that The Companies Act, 1994 and The Bank Companies Act, 1991 plays the most vital role in financial disclosure of banking companies in Bangladesh. In addition, banks in Bangladesh are bound to follow the circulars issued by Banking Regulation and Policy Departments (BRPD) of Bangladesh Bank (BB) and The Bangladesh Securities and Exchange Commission from time to time. Securities and Exchange Rules, 1987 requires compliance with IASs/IFRSs as adopted in Bangladesh (these are known as Bangladesh Financial Reporting Standards and Bangladesh Accounting Standards). Among the IASs/BASs and IFRSs/BFRSs IAS-1: Presentation of Financial Statements” and “IFRS-7: Financial Instruments: Disclosure” are the widely followed standard in financial reporting of private sector commercial banks in Bangladesh. To examine the extent of disclosure in financial reporting by private commercial banks, five years’ annual reports of six sample banks that cover about 27.5% of the eligible population were studied by using a researcher developed Unweighted Disclosure Index (UDI) that contains 247 disclosure items and follows the dichotomous method where one (1) is given for any disclosed item and zero (0) is given for any undisclosed item of information incorporated in the disclosure index. Empirical findings from the analysis of the annual reports, on the basis of disclosure index, reveal that the mean disclosure of five years is 76.18 percent which was 67 percent in 2008 and 84.6 percent in 2012. The trend shows that the mean disclosure score of the banking sector is increasing. However, the rate of its increase from year to year is very high with a yearly average rate of increase 6.02 percent. The average size of annual report in terms of number of pages was increasing from year to year to a significant extent. The average number of pages in the annual reports of the sample banks was 155.2 pages in 2008 which became 330.6 pages in 2012. On the other hand, it has been observed that in 2008 about 66.67% of the banks used Bengali version beside the English version which was constant in 2009 and it gradually decreased to only 16.67% in 2012. The ranking of the banks on the basis of overall disclosure level features three banks topping the list, they are: Prime Bank Limited with a score of 87.85 percent followed by Islami Bank Bangladesh Limited with a score of 81.86% and then Bank Asia Limited with a score of 77.81 percent. But still there are some mandatory items undisclosed by the banks in Bangladesh and the mean disclosure percentage is 76.18% which implies that there are still some scopes of improving disclosure percentage in private sector commercial banks in Bangladesh. Paired sample t-test rejects the null hypothesis-1 (HO1) that there is no significant difference in the level of disclosure among the Private Sector Commercial Banks in Bangladesh. The paired sample t-test among the disclosure of different years, especially the years before and after 2010, rejects the null hypothesis-2 (HO2) at 5% level and accepts alternative hypothesis that says “There is a significant difference between the disclosure percentages between the periods before and after the supersession of BAS-30 by BFRS-7 in 2010” Among the ten categories of disclosures, a very high degree of consistency was found in the disclosure categories related to basic financial statements of which the highest consistency was seen in “Income Statement Items and Appropriation of Profit (ISA)” category. The minimum percentage of this category is 92% and the maximum is 100% while the average of this part is the highest 96.8% the standard deviation was the lowest 2.44. On the other hand, the highest standard deviation (24.29) was seen in Financial Statements (FS) category; therefore, it was the most inconsistent part of the annual reports of banking sector. Next to this the inconsistent part is General Corporate Information (GCI) category having the minimum 40.63%, maximum 100%, mean 74.79% and standard deviation of 17.11%. The paired sample test among disclosure percentage of different parts of annual report shows that 36 pairs (80%) are statistically significant difference at 95% level of confidence among the pairs. It rejects the null hypothesis-3 (HO3) and concludes that there is a significant difference among the different categories of information disclosed in the annual report of the Private Sector Commercial Banks in Bangladesh. The descriptive statistics of both the Conventional and Islamic banks indicates that Conventional banks had the higher percentage of disclosure 78.41% which was 73.95 in Islamic banks. In order to test hypothesis four, independent samples test of different disclosure categories between Islamic and Conventional banks were conducted. The test accepts null hypothesis-4: “There is no significant difference between the financial reporting practices of Islamic Commercial Banks and that of Conventional Commercial Banks in Bangladesh” at 95% confidence level. In the regression model Overall Disclosure Index (ODI) was the only dependent variable and there were eight independent variables. The model summary in Table-6.19 shows the F-Statistics 12.647 at p < 0.001 which indicates the model as a whole was well specified. The t-statistics were positive for log total asset (LTA), Earnings per Share (EPS), Debt equity ratio (DE), and Capital adequacy ratio (CAR) and negative for Log shareholders (LSH), Return on Equity (ROE), Credit deposit ratio (CD) and Listing age (LA). Log total asset (a size variable) and the listing age were the only two variables that were significantly associated with accounting disclosures at p < 0.01. The other variables, LSH, ROE, CD, DE, and CAR were not found to have explanatory power. Therefore, the null hypothesis-5 is rejected and the alternative hypothesis is accepted that there is a significant association between the extent of disclosure and some selected corporate attributes of Private Sector Commercial Banks in Bangladesh. Though, the impacts of all the variables are not equally significant. The study recommends that adequate steps should be taken by regulatory bodies to ensure full compliance with relevant accounting disclosure requirements applicable in Bangladesh; The Institute of Chartered Accountants of Bangladesh (ICAB), should be given the regulatory power that may results in compliance of reporting and quality disclosure in annual report of the companies; Those who abide by the regulatory and other reporting requirements should be awarded, whereas stern actions should be taken against the culprits in order to ensure that all listed companies comply with the mandatory accounting standards in Bangladesh; the high degree of compliance and disclosure can be related to low disclosure costs which could have resulted by giving tax shield on printing cost of annual reports. All the banks should disclose the compliance status of both the National and International Standards that will in turn enhance the confidence among international users of financial reporting. This will make the financial statements comparable and will, therefore, enhance global competition, inflow of foreign direct and indirect investment, and international listings. In order to enhance the quality and transparency of financial reporting, which is imperative to build up the confidence of a large variety of users (like investors, depositors, regulators etc.); banks should disclose all the necessary information fairly. Besides mandatory disclosure requirements, additional information should be disclosed voluntarily so that the users can take prudent decisions. The study will at least give an idea of how the banking sector of Bangladesh specially the listed private sector commercial banks are disclosing their financial information. The scope of the study can be expanded by including unlisted banks, nonbank financial institutions, manufacturing companies etc.
Financial Reporting Practices of NGOs in Bangladesh with Special Reference to BRAC and ASA
(University of Rajshahi, 2014) Sayed, Md. Abu; Dey, Madan Mohan
Non-government organizations (NGOs), as a big actor in the development sector of Government of Bangladesh have been facilitating their development programs through utilizing different donors’ fund and from their own. But a question frequently arises in Bangladesh regarding the management and utilization of huge amount of money by the NGOs and whether they follow Companies Act. 1994 and FAS No. 93, 116 &117. In this study, we intend to explore the present condition of financial reporting practices of NGOs in Bangladesh. The objectives of our study are to examine the financial reporting practices of NGOs. In particular, the objectives of our study are as follows : (i) to examine the characteristics of the financial reporting practices of NGOs like BRAC & ASA; (ii)to measure the extent of disclosure items of BRAC and ASA; (iii) to identify the association among disclosure score and variables affecting the disclosure score; (iv) to judge the opinion of the expert groups regarding the qualitative characteristics of accounting information and the compliance of standards by selected NGOs; (v) to suggest for improvement in disclosure by the sample NGOs. Both primary and secondary data have been used for the study. Separate methods and techniques have been followed for collecting both types of data. We have prepared two sets of questionnaire: One for the experts in accounting and other for the NGO executives. The questionnaire is close ended. First set of questionnaire consists of 17 questions which were meant for the experts in accounting and the second set of questionnaire consists of 64 questions which were meant for the NGO executives. The researcher has used quantitative techniques to analyze the collected and classified data. Quantitative analysis has been done through simple Tables. This technique has involved simple calculation of mean, standard deviation, co-efficient of variation, ratio analysis, regression, t-test and Chi-square test. It is evident from our study that the selected NGOs follow GAAP and IASs/BASs such as IASs BASs No. 1, 7, 8, 10, 16, 18, 19, 23, 24, and 37 but the total scores of disclosure are not sufficient. However, the extent of disclosure by the NGOs is moderate, though they follow chart of accounts, use internal check system and comply with the relevant Acts. They also take measure for safeguarding their assets and they use a wide range of depreciation rates. The study finds significant differences in disclosure score regarding accounting policy items, balance sheet items (assets), balance sheet items (liabilities), the income statement items (debit), the income statement items (credit), and the total disclosure score of the selected NGOs. But it has failed to show any significant difference in disclosure score regarding the information as to projection and budgetary disclosure, the information relating to various useful statements and the information useful for measurement and valuation method of the selected NGOs. The univariate regression analysis reveals that the size of NGOs proxied by the total assets, total revenue, and equity capital significantly affects the disclosure score of the selected NGOs while the liquidity as proxied by current ratio, net working capital ratio and leverage as proxied by debt-equity ratio, total debt to total assets ratio do not affect the extent of disclosure score. If we turn towards the result of opinion survey on the respondents we observe that the results of chi-square test on opinion survey documents no significant difference among the respondents regarding the compliance with legal framework, the application of IASs & IFRSs, the extent of understandability, the compliance of decision usefulness, the extent of relevance, the extent of comparability and the extent of consistency by the selected NGOs. But there is significant difference among the respondents regarding the extent of reliability by the selected NGOs. The NGOs play a significant role for the economic development of Bangladesh. This economic development depends to a great extent on the disclosure of accounting information because accurate and relevant accounting information about NGOs help their management as well as the Government to keep them on the right direction. Here, reliable and relevant information about NGOs have a role to play. The study provides testimony to the fact that there is significant difference in disclosure scores and regarding balance sheet and income statement items except for projection and budgetary items and for information relating to valuation methods. The study evidenced significant associations between disclosure score and size as proxied by total assets, revenue and equity capital but no association was found between disclosure score and liquidity as well as leverage. Finally, respondents were unanimous regarding compliance with legal framework, application of IASs & IFRSs and the extent of understandability with the exception of reliability. If the suggestions are implemented then the transparency of the NGOs as well as the disclosure will be improved. Every study has some limitations. Although we have taken due care in selecting the sample, choosing the period, collecting, editing and analyzing the data, selecting the respondents our study has some limitations. The limitations of our study are as follows: We have selected two NGOs to evaluate the financial reporting practices of them. But the inclusion of more NGOs would increase the representativeness of our sample. The Regulatory Acts of the NGOs do not require any disclosure by them. Accordingly, we had to construct disclosure index using Companies Act 1994, since The Society Registration Act and other Regulations do not require any disclosure. Another limitation of our study is that our data are not adjusted for price level changes because the relevant NGOs prepare their financial statements using historical cost figures. The Acts are silent regarding the number of financial statements and their contents. So, provision should be made in the said Acts regarding the type of financial statement, number of financial statement, frequency of the issuance of financial statement. The accounting system of the selected NGOs should be computerized. An Act that contains sufficient provision regarding disclosure of its different dimension should be enacted and strict compliance with the Act must be ensured. Disclosure provision regarding receipts and payment of money, accounting policy followed valuation method of assets, purpose of spending the donation, frequency of report preparation, audit lag allowed and rules regarding changes in accounting policy should be clearly mentioned in concerned Act that will deal with NGO affairs. Strict adherence to financial rules regarding NGOs dealing with monetary affairs with the public should be ensured. Sufficient measures should be taken by the Government of Bangladesh so that any NGO cannot receive any money from the foreign donors through illegal means such as hundi since there is a possibility of spending this money in the illegal sector. In fine it can be concluded that the present study has been conducted using two selected NGOs. Further in-depth study on disclosure can be conducted taking more NGOs as sample and covering more dimensions and more time.
Higher Education Budget for Human Resource Development: Bangladesh Perspective
(University of Rajshahi, 2014) Sarkar, Shakhawat Hossain; Hossain, Syed Zabid
The present study is concentrated on higher education budget, its allocation, implementation, and utilization for human resource development (HRD) in Bangladesh. The study also strives to discover the financial and nonfinancial challenges of higher education budget for HRD and to find out the ways to overcome those challenges. The core objective of the study is to analyze higher education budget against local, regional, and global benchmarks. Utilization of higher education budget is dependant variable, while session jam in higher educational institutions, unemployment, and employment nature of higher educated people are three major independent variables of the study. The study is based on both secondary and primary sources of data. Secondary data has been collected from different published sources and primary data has been collected through responses of semi structured questionnaire form 557 alumnae of the public universities who are in job required non-technical entry qualifications and from 63 faculties of public universities in Bangladesh. Collected data has been edited, coded and tabulated in a methodical way. Monetary value has been converted into current value of money based on consumer price index (CPI) of Bangladesh Bureau of Statistics (BBS). Descriptive statistics such as frequency, mean, mode, standard deviation (SD), co-efficient of variation, range, minima, maxima and inferential statistics such as ANOVA, sample mean t-test, Chisquare test along with charts and diagrams have been used to analyze data and to find out results. All the statistical analyses have been conducted with the help of Microsoft Excel and SPSS 15 version. Empirical results demonstrate that the trend of revenue budget allocation on education and UGC grants to public university budget (percentage) in Bangladesh have been decreasing gradually over the period. Public expenditure of higher education as percentage of GDP and government expenditure have been far below than the suggested norms of different Education Commissions in Bangladesh since independence and also the practices of South Asian countries. More discouraging is that the public universities in Bangladesh are spending a notable amount from undisclosed or unidentified or unexplained sources, which is a sheer violation of budget manual. This situation suggests lack of transparency in budget execution. Another most revealing feature of public university budget is that the major portion of the budget has been spent for salaries and pension (about three fourths) where as only one-tenth for education contingencies. Major part (about three fourth) of education contingencies exhausted for exam related expenses and remaining part for education expenses & students’ facilities as against a negligible amount of total budget has been spent for research, fellowship and scholarship during the whole period of review. Expenses on major sub-heads of education contingencies are significantly dissimilar among different categories of universities. Human resource development scenario in Bangladesh is also in a very poor shape compare to other South Asian countries, least developed and developing countries. There is a high positive correlation between national education budget and HDI value of Bangladesh. The adult literacy rate of Bangladesh is lower than the average of least developed countries and South Asian average, not to talk of World average. High unemployment rate is a reality in Bangladesh. A large part of higher education budget has been unproductive mainly because of short-term and long-term unemployment and Bangladesh has been deprived of getting the services from those unemployed higher educated people. On the other hand session jam has been creating extra financial pressure on the government and on the guardians. Students are delayed to start their working life and consequently, the country is deprived of getting the services from the graduates for the period of session jam. Job nature has a pressure on utilization of budget. Technical graduates usually consume 3 to 5 times more money than the general graduates and as such about half of the government expense against any technical graduate is an unproductive investment when s/he works in nontechnical job. Insufficient budget allocation is one of the main budgetary challenges for higher education in Bangladesh. Similarly, inappropriate utilization of budget due to session jam, unemployment and job nature of higher educated people is also a major challenge for higher education budget. There are some other challenges such as lack of appropriate plan and its proper implementation, slavish national politics in higher educational institutions, importance of political identity over merit while selecting as well as promoting academic and nonacademic staff, assigning different charges to them, abuse of public university autonomy, and also absence of quality research, etc. Unmatched between expected and actual study area and or study discipline decreased the interest of the students in higher education. Similarly, unmatched between expected and present job is obstacle to utilized working ability of higher educated employee fully. All these are indirect challenges of higher education budget in Bangladesh. Higher education of Bangladesh is not standard enough to meet the local and international standard. Consequently, unemployed higher educated people are increasing gradually. To defeat all direct and indirect challenges of budget for higher education, budgetary allocation should be increased to a rational level and proper implementation of the same following budget manual should be ensured. Special emphasis should be given on the allocation for research, fellowship and scholarship and create an environment for quality research. Some alternative sources of finance such as arranging loan for students, strengthening relationship with scholarship providers, involving professors in consultancy, research projects, research grant etc in addition to government grant and tuition fees should be looked for by the public universities in Bangladesh to alleviate extra pressure on their budget.
Hospital Management and Patient Satisfaction in Bangladesh: A Comparative Study between Private and Public Sectors
(University of Rajshahi, 2013) Begum, Farhana; Sayaduzzaman, Md.
Health is a basic prerequisite for improving the quality of life. Socio-economic development of a nation mostly depends on the state of health. A large number of Bangladeshi people, particularly in rural areas, remain with no or little access to health care facilities. Their lack of participation in health service is a problem that has many dimensions and complexities. Patient satisfaction with health care is seen as a dimension of quality of care. Expectations of service recipients are increasing day by day due to rapid development of science, technology and management. The quality of care that satisfied patients yesterday or day before yesterday may not satisfy them tomorrow or day after tomorrow. Moreover, satisfaction and utilization of services go hand in hand, which is the rationale behind thousands of satisfaction research being published in the developed world per year. But unfortunately there is hardly any study on patient satisfaction using large series of field level data in Bangladesh. Finding clue from this gap this study has been done in order to evaluate patient satisfaction in Bangladesh. A cross-sectional comparative study has been conducted with the aim of identifying differences in the level of satisfaction among patients in private and public hospitals. We have purposively selected six hospitals- three from public and three from private. Dhaka Medical College Hospital, Mitford Hospital and Sher- E Bangla Medical College Hospital are among the public hospitals and Central Hospital, Bangladesh Medical College Hospital and Ibn Sina Hospital are from private hospital. Primary data has been collected through a structured pre-tested questionnaire from 299 respondent inpatients 150 from public hospitals and 149 from private hospitals. Male patients are 161 and female patients are 138. Half of the patients have been selected from medical wards and the other half from surgical wards. The list of patients ready to be released on a particular date has been obtained from the respective Ward-in-Charge of the respective hospitals. Satisfaction score has been assessed with services of doctors, nurses, aya and ward boy, cleanliness, laboratory and reception. Satisfaction has been categorized into five levels- not at all satisfactory, somewhat satisfactory , more or less satisfactory, appreciable, and excellent, where 1 meant for `'not at all satisfactory' and 5 for 'excellent', 'somewhat satisfactory' 2, 'more or less satisfactory' 3 and 'appreciable' 4 in between them. Dependent variable is satisfaction score. Satisfaction has been further assessed with a close question of future return to the same hospital. Inter personal perceptual variation has been taken into consideration to avoid confounding effect. Age, sex, occupation, educational status, socioeconomic condition, marital status, outcome of treatment, types of treatment and expenditure of treatment have also analyzed to measure the impact of these demographic characteristics on patient satisfaction. Data has been analyzed using SPSS version 20. Hypotheses have been tested using Independent t test. Binary Logistic Regression Model has been built to explore maximum effect of independent variables on dependent variable. Qualitative data has been analyzed with Chi-square test, while one way ANOVA has been done to compare more than two groups. In this study mean age of the public group was 39.01  18.84 years and that of private group was 47.32  20.47 years. However, age and sex have no association with any of the satisfaction scores given to the doctor’s service, nurse’s service, provision of medicine supply, service given at the reception, aya/ ward-boy and cleaner’s service, laboratory service and maintenance of cleanliness. So, age and sex have got no significant effect on total satisfaction score. Satisfaction score does differ between married and unmarried population also. Socioeconomic conditions of this series are dominantly from middle class followed by poor class and a small from (nearly 10 percent) affluent segment of the society. Most of the middle class and rich people are served by the private hospitals and the poor people are served by public hospitals. Most of the patients in this study are primary educated. Higher educated people like private hospitals than that of public hospitals. A handsome number of illiterate people have participated in the study who have been treated both in private and public hospitals. One way ANOVA discovers that occupation and educational status of the study population have no influence on satisfaction. The rich people are more satisfied than the poor people. But age, sex, educational status, occupation, marital status and type of treatment has got no significant influence on satisfaction and future return to the same hospital. Even the amount of expenditure has not considered by the patients in determining their satisfaction in the same type of hospital. Out of 299 patients nearly two thirds have been either completely cured or improved, one third either not improved or deteriorated and a negligible portion that is around 1 percent unfortunately died during the course of hospital admission. Outcome of treatment have logically influenced the satisfaction score. Those patients are more satisfied who are cured or improved than those who are deteriorated or died. Overall satisfaction is higher in private hospitals than that of public hospitals in respect of all services - doctor, nurse, aya/ward boy and cleaner, laboratory services, reception and medicine supply. Availability of essential service, politeness and sympathy of staff, cleanliness, and use of modern equipment has positive influence on patient satisfaction in private hospitals. It is surprising that expenditure of treatment does not influence the satisfaction rather the services of doctor, nurse, aya/ward boy and cleaner, reception, laboratory and cleanliness have influenced the satisfaction score. It indicates patients require service even if it requires reasonable costs. Around 30 percent of the respondents are disappointed with the services. They will not return to the same hospital for consuming service if they would become ill unluckily. It is only the services provided by the hospital that could influence the patient significantly in making decision of future return to the same hospital. But, binary logistic regression analysis explores that future return depends on doctor’s service, aya/ ward boy and cleaner’s service, regular and timely supply of medicines only. Nurse’s service, reception, laboratory service, cleanliness and outcome of treatment do not influence the decision significantly. Most of the people of Bangladesh are of poor socio-economic status and they have to avail themselves of the services from public sector. But it is frustrating that most of the services provide by public providers are not at all satisfactory to a good number of the patients. It gives a red signal for the health system of the country. Till now public sector is the only active system at the doorstep level of the poor and middle class people. Most of the people cannot buy the health services of private sector as they are costly. So it is urgently needed to identify the loopholes of the public sector and fix accountability of the service providers. Besides, the cost of services of the private providers should be reasonable to all segments of the society and the Directorate of Health should influence the price fixing mechanism of the private hospitals.
Norms and Practices of State-Owned Commercial Banks In Bangladesh
(University of Rajshahi, Rajshahi, 2021) Banu, Mst. Hasna; Sayaduzzaman, Md; Dey, Madan Mohan; Sil, Subhash Chandra
Norms mean the body of principles and measures, which investigate the values and rules that govern the individuals and social relations of the humans from moral viewpoint which is essentially based on the parameters of right and wrong, good and bad and they also regulate the relations between the individual members of a profession and the relations of their members with the rest of the society. In Bangladesh the banking sector is regulated by the selected provisions of different legal frameworks such as the Companies Act of 1994, the Bank Companies Act of 1991, Securities and Exchange Rules of 1987, Securities and Exchange Ordinance of 1969 and Bangladesh Bank Order of 1972, International Accounting Standards, International Financial Reporting Standards and other applicable rules prescribed by the Bangladesh Bank and all are the norms of the banking companies which guide the banking sectors for conducting the different practices as per designated provisions prescribed by the different regulatory authorities of the banking sector. The present study has given emphasis on the financial reporting practice, corporate governance practice, credit risk management practice and corporate social responsibility expenditures practice to evaluate the norms and practices of the stated-owned commercial banks in Bangladesh. For achieving the main purpose of the study researcher has taken four stated-owned commercial banks as sample and employed both primary and secondary data to reach the findings as per objectives of the study.------
Performance Evaluation of the Nationalised Commercial Banks in Bangladesh: A Comparative Study"
(University of Rajshahi, 1989) S. A. Shakoor, S. A.; Saha, Abhinaya Chandra
Since the creation of Bangladesh the Nationalised Commercial Bas have been -playing a commendable role in achieving the economic growth of Bangladesh. Recently there is a greater change in banking sector in Bangladesh. Consultative Committee of Public Enterprise, Ministry of Finance, Bangladesh Bank and other researchers have emphasised the operational efficiency of the same. A host of research has been done on the various aspects of NCBs but as no such specific attempt is found,------------------------
Rural Financing in Bangladesh with Special Reference to Natore District - A Comparative Study of Grameen Bank (GB) and the Bangladesh Rural Advancement Committee (BRAC)"
(2006) Karim, Md. Shaik Romijul; Paul, Priya Brata
Bangladesh is one of the world's least developed and most densely populated country, with 941 person per sq. km. (BER. 2006, XVII). It is predominantly a rural economy. The agriculture that is the prime sector of the economy contributes about 19.59 percent of the total GDP, occupying 51.69 percent of the employed labour force and over 80 percent of total population live in the rural areas (BER, 2006, 8). The majority of the rural people remain unemployed or underemployed for about most of the time. Rural Bangladesh is. characterized by landless, low income and unemployment resulting in high incidence to poverty which was 33.7 percent by using lower poverty line, while this stands 49.8 percent if upper poverty line is used.1 The incidence of poverty is much severe in rural areas much as 53.1 percent in against of 36.6 percent in urban areas (BER, 2003, 147). Incidence of poverty by Administrative Divisions has been shown in Table-1.1,( Page-18) Among the divisions of the country the highest incidence of poverty was observed in Rajshahi Division (61.6%) and the lowest in Sylhet Division (28.4%). In case of poverty gap, the highest poverty incidence was also found in Rajshahi Division (18.1%) and the lowest in Dhaka division (7.7%). Regarding the squared poverty gap, the highest incidence accounted for Rajshahi Division (6.9%) and the lowest was obtained in Dhaka division (2.6%). All these three measures of income poverty show that the highest poverty incidence prevails in Rajshahi Division (BER, 2005, 186). Though land is the main productive asset in the rural areas of Bangladesh, but distribution however is highly skewed. As statistical data show, about 57.1 percent and 70.6 percent of the rural households are landless according to lower line and upper line of poverty respectively, and 42.7 percent households owned up to 0.04 acres of land, 38.1 percent households owned up to 0.5 acres of land and 11.7 percent households owned more than 2.5 acres of land according to lower line of poverty (BER, 2003, 149, 2004, 173). It is evident from Table-1.2,( Page-19) that the gap between the poorest of the poor (bottom 5 percent) and richest of the rich (top 5 percent) is widening so as far as the Distribution aspect of income is concerned. In 1995-96 the accruing to top 5 percent of the households was 23.62 percent while income share of the lowest 5 percent was 0.88 percent implying the gap of income differential by 27 times. Comparatively, in 2000, income accruing to top 5 percent of the households (30.66 percent) is 46 times higher than the income accruing to lowest 5 percent of the household (0.67). The share of income of the bottom 5 percent has decreased from 0.88 percent in 1995-96 to 0.67 percent in 2000. On the contrary, the share of income of the top 5 percent has increased from 23.62 percent to 30.66 percent over the same period indicating highly skewed income distribution. Rising income inequality is also reflected in the Gini Coefficient, which reached to 0.472 in 2000 from 0.432 in 1995-96. In rural area the richest-poorest ratio in 2000 is found to be 35. 7 while in 1995-96 this ratio was 19. 73. in urban area this ratio increased to 53.4 in 2000 from 32.8 in 1995-96. Per capita income of the poor is found lowest in Rajshahi division (Tk. 468.89 and Tk. 526.44 respectively) measured against both lower and upper poverty line. Rajshahi Division shows the lowest per capita expenditure (Tk. 438.25 and Tk. 490.41 respectively) (BER, 2003, 150-151).
Small and Medium Enterprises’ Financing by the Commercial Banks in Bangladesh: An Evaluation
(University of Rajshahi, 2020) Moulick, Raj Kumar; Sil, Subhash Chandra
Small and Medium Enterprises (SMEs) are of growing importance for all national economies worldwide. SMEs all over the world have been playing a vital role in promoting economic development, improving structure facilities, reducing hunger and poverty, making potential contribution to the overall industry, generating employment, achieving millennium development goals, eradicating gender inequality and increasing women empowerment. Nowadays, it is broadly admitted that SMEs have been playing an elementary role with regard to thorough industrialization by means of entrepreneurship development. Industrialization’s connection to poverty mitigation is by means of – exaggerating the economic growth rate of the country, ennobling of the efficiency of the labor in employment, delivering job opportunity to the unemployed. As a result, SME in Bangladesh adopt numerous strategies to raise themselves and the economy of the country. This sector requires lower energy supply, lower infrastructure facilities and imposes less environmental risk. They contribute towards better utilization of local resources and skills that might otherwise remain unutilized. One of the most pressing troubles of SMEs to make sure their survival and development is accessibility to external finance. The research is empirical in nature. Quantitative approach has been drawn on to find out contribution to GDP, financing gap in Bangladesh. Research reasoning approach of the research is deductive. Since it is quantitative in nature, statistical and mathematical techniques form an integral part of the positivist research paradigm. The primary data in this study have been collected through questionnaire responses from 366 SMEs, 50 from credit officers of sample banks, 40 from academicians and 37 from accounting experts. Secondary data are obtained from the audited annual reports of the sample private commercial banks in Bangladesh. In addition, the relevant secondary data also have been collected from different sources like Bangladesh Bank, Bangladesh Bureau of Statistics, Ministry of Industries, SME foundation, MIDAS, Bangladesh Economic review, Bangladesh Economic Survey, Bangladesh Bank Bulletin, Statistical Year books, Economic Advisor’s Wing, Ministry of Finance and from other SME related organizations. The data were analyzed using the following methods: descriptive analysis, regression analysis, chi-square tests, t-tests, ANOVA tests, correlation tests and analysis of variance and then used to address the hypothesis and to meet the objectives of the study. The objectives of the research are to determine the contribution of SMEs to GDP and enhance the understanding of the attendant factors that facilitate or impair SMEs’ accessibility to bank finance from a demand side perspective as well as supply side perspective as per Pecking Order Theory, Information Asymmetry theory, Trade off Theory and Agency Theory. To achieve the plan, the researcher selects SMEs in Bangladesh as the population as representatives of the demand side. The research findings confirm that different sectors of SMEs such as crops and horticulture sector, animal farming sector, forest and related sector, finishing sector, hotel and restaurants sector, transport sector, real estate sector, auricular sector have significant contribution to GDP in different years in Bangladesh. It was also found that manufacturing sector, construction sector, wholesale and retail trade sector, industry sector, service and other sectors have significant contribution to GDP in different years. The findings have also identified that service sector and trade sector have significant contribution to GDP through employment generation. The findings also confirm that there are some significant influences of the internal finance, collateral and profitability on accessibility to bank loan. It was found also that one of the most important reasons for most owners or managers failing to obtain finance from the commercial banks were lack of collateral and incomplete financial statement prepared by the firm (financial information). The firm’s features (sector, size and age of the firm) have also significant influence on accessibility to bank credit from demand side. From the supply side, the rate of interest, relative financial information opacity of SMEs and reliable collateral have significant influence on accessibility to bank loan. Our finding also corroborates the fact that the financial performance variables, such as net profit before tax, net profit after tax, interest income, non-interest income, loans and advances, total investments, total assets, shareholders’ equity, return on assets and return on equity of the sample banks have influence on SMEs’ financing except those of Eastern Bank Ltd.