Term Paper On Analysis of Audit Report of Listed Bank in Bangladesh

Term Paper on Analysis of Audit
Report of Listed Bank in

Bangladesh
Sl no Description Page No
1 Letter of Transmittal 2
2 Acknowledgement 3
3 Executive Summary of Audit Reports 4
4 Main Body 6-28
5 Conclusion 32
6 Reference 32
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Letter of Transmittal
Date: 11-07-2019
Sujan Chandra Paul
Assistant Professor,
Department of Accounting & Information Systems
University of Barisal
Subject: Submission of Term Paper on “Analysis of Audit Report”
Dear Sir,
Here is the assignment that we assigned on the topic as per your request. The assignment has
been completed by the knowledge that we have gathered from the course “Audit & Assurance I”.
We are thankful to all those persons who provided us important information and gave us valuable
advices. We would be happy if you read the report carefully and we will be trying to answer all
the questions that you have about the assignment.
We have tried our label best to complete this assignment meaningfully and correctly, as much as
possible. We do believe that our tiresome effort will help you to get ahead with this sort of
venture. In this case it will be meaningful to us. However, if you need any assistance in
interpreting this assignment please contact us without any kind of hesitation.
Thanking you.
Yours obediently,
Group-01
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ACKNOWLEDGEMENT
The successful accomplishment of this group work is the outcome of the contribution of number
of people, especially those who have given the time and effort to share their thoughts and
suggestions to improve the report. At the beginning, we would like to pay my humble gratitude
to the Almighty for giving us the ability to work hard under pressure. However, the space involved
does not allow us to mention everybody individually. It gives us immense pleasure to thank a
large number of individuals for their cordial cooperation and encouragement who have
contributed directly or indirectly in preparing this Report. This is a great pleasure for us to be
assigned under the guidance of, Sujan Chandra Paul (Our Super visor) Assistant Professor, Dept.
of Accounting & Information Systems, University of Barisal, Barishal. We are very grateful to
him for all his kind cooperation and guidance in preparing this report. His professional and
practical experience enriched us to a great extent at the time of preparing this study. Without
your Guidance and assistance, this report would not have seen the light of day. Finally, we would
like to thank all those people who have shared their views about our Group work, provided us
with necessary information, criticized us and congratulated us. This acknowledgment is not
enough to tell them how profound the impact of their opinion is on this report, how indebted I
am to them. We express our heartiest gratitude to all of them. This report is not free from
limitations. There might still be some minor mistakes such as typing errors, despite my utmost
care. We apologize for this.
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Executive Summary of Audit Reports
Subject Matter:
These reports are provided for identifying which reports are qualified and which are unqualified
of the listed bank of Bangladesh based on their recent annual report.
Method of Analysis:
We analyze the audit report based on the classification of audit reports, where there is a two
types of audit report, one is qualified and other is unqualified. In qualified report there are many
types. Such as Adverse opinion, Disclaimer opinion, limitation of scope, except for etc. on the
other hand emphasis of matter is a type of unqualified report.
Findings:
We analyzed 10 sample of audit report of Bangladesh Bank. They are
1) Sonali Bank ltd
2) Janata Bank ltd
3) Agrani Bank ltd
4) MTB ltd
5) DBBL
6) BASIC Bank ltd
7) IBBL
8) AB Bank ltd
9) One Bank ltd
10) SIBL
In Sonali Bank ltd Audit Report, the report is unqualified report because it represents that the
financial statements of the company give a true and fair view of the financial state of Sonali Bank
as at 30 June, 2018.It also represents that the Bank complies with applicable sections of the
Companies Act 1994 and other applicable sections of the Companies Act 1994 and other
applicable laws and regulations.
Like Sonali Bank -IBBL, DBBL, One Bank, Janata Bank, MTB, ABBL, SIBL audit reports are
unqualified. So, it also represents true and fair view and complies with proper laws and
regulations of Companies Act 1994.
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In Agrani Bank Audit Report, the report is emphasis of matter which is not qualified report. This
report represents that there is no omission in the report, but the auditor emphasis on a specific
point such as the revenue of the Bank is decreasing year by year. It also problems in going concern
principles.
In Basic Bank Audit Report, the report is qualified report because as disclosed in Note 12 to the
financial statements, the Bank has made provision for loans & advances Taka 2,985.01 million
whereas we have observed that a further provision of Taka 1,359.40 million is required on account
of loans & advances. As a result, provision for loans and advances is understated by Taka 1,359.40
million and net profit after tax as well as Core Capital (Tier-1) is overstated to the same extent.
However, Bangladesh Bank (Central Bank) has allowed to make provision of the said amount i.e.
Taka 1,359.40 million within 30 June 2013 vide Bangladesh Bank letter no. DBI-2
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Analysis of Audit Report on Sonali Bank Ltd.
At a glance Sonali Bank Ltd:
Sonali Bank was established in 1972 under the Bangladesh Banks (Nationalization) Order,
through the amalgamation and nationalization of the branches of National Bank of Pakistan,
Bank of Bahawalpur and Premier Bank branches located in East Pakistan until the 1971
Bangladesh Liberation War. When it was established, Sonali Bank had a paid-up capital of 30
million taka. In 2001, its authorized and paid up capital were Tk 10 billion and Tk 3.272 billion
respectively. Presently, its authorized and paid up capital is Tk 10 billion and Tk 9 billion
respectively The bank's reserve funds were Tk 60 million in 1979 and Tk 2.050 billion on 30 June
2000. In 2013, $250,000 was stolen from the bank by Cyber criminals using the Swift
International payments network. In 2016 the Bank signed an Memorandum of Understanding
with PayPal.
Analysis of Independent Auditors’ Report to the Shareholders of Sonali

Bank Limited:
The audit report provided by the independent auditors of Sonali Bank is an unqualified report.
The audit opinion of Sonali Bank represents that the financial statements of the company give a
true and fair view of the financial state of Sonali Bank as at 30 June, 2018 and of the results of its
operations and its cash flow for the year then ended. This audit opinion also represents the bank
complies with the applicable sections of the Companies Act 1994 and other applicable laws and
regulations.
The content of the audit report is regulated by BSA 700. The audit is conducted accordance with
Bangladesh Standards on Auditing (BSA). The audit opinion provides that the financial
statements are free from material misstatements. The audit is conducted based on-
1) a test basis
2) audit evidence which is sufficient and appropriate.
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The Auditor provided opinion based on these conditions:
In accordance with the Companies Act 1994, Securities and Exchange Rules 1987, the Bank
Company Act, 1991 as amended and the rules and regulations issued by Bangladesh Bank, we
also report the following:
a) we have obtained all the information and explanation which to the best of our knowledge and
belief were necessary for the purpose of our audit and made due verification thereof;
b) to the extent noted during the course of our audit work performed on the basis stated under
the Auditors’ Responsibility section in forming the above opinion on the consolidated financial
statements of the Group and the financial statements of the Bank and considering the reports of
the Management to Bangladesh Bank on anti-fraud internal controls and instances of fraud and
forgeries as stated under the Management’s Responsibility for the Financial Statements and
Internal Control:
i. internal audit, internal control and risk management arrangements of the Bank as
disclosed in note 2.33 of the financial statements appeared to be materially adequate;
ii. nothing has come to our attention regarding material instances of forgery or
irregularity or administrative error and exception or anything detrimental committed by
employees of the Bank and its related entities other than matters disclosed in these
financial statements.
c) financial statements of all subsidiaries of the Bank have been audited by other auditors and
have been properly reflected in the consolidated financial statements;
d) in our opinion, proper books of accounts as required by law have been kept by the Group and
the Bank so far as it appeared from our examination of those books and proper returns adequate
for the purpose of our audit have been received from the branches not visited by us;
e) the consolidated balance sheet and consolidated profit and loss account of the Group and the
separate balance sheet and separate profit and loss account of the Bank dealt with by the report
are in agreement with the books of account;
f) the expenditure incurred was for the purposes of the Bank’s business;
g) the consolidated financial statements of the Group and the separate financial statements of
the Bank have been drawn up in conformity with prevailing rules, regulations and accounting
standards as well as with related guidance issued by Bangladesh Bank;
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h) adequate provisions as explained in respective notes have been made for advances,
investments and other assets which are, in our opinion, doubtful of recovery;
i) the records and statements submitted by the branches have been properly maintained and
consolidated in the financial statements;
j) the information and explanation required by us have been received and found satisfactory; and
k) we have reviewed over 80% of the risk weighted assets of the Bank and we have spent around
18,150-person hours for the audit of the books and accounts of the Bank. The auditors assessed
the accounting principles used and significant estimates made by management which were
reasonable according to Bangladesh Accounting Standards (BAS). There's no problem of
limitation of scope, accounting policy and procedures, disclosures and accounting estimates
made by management or other. The auditors conducted audit plan and analytical procedures
properly. So, it is concluded that this audit report is an unqualified audit report.
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Analysis of Audit Report on Janata Bank Ltd.
At a glance Janata Bank Ltd:

Janata Bank Ltd. is a state-owned commercial bank of Bangladesh established in 1972. Its
headquarters is situated at Motijheel in Dhaka, the capital city of Bangladesh. It is the second
largest commercial bank in Bangladesh. Bank Nationalization Ordinance of 1972 was used to
form Janata Bank by merging the assets of United Bank Limited and Union Bank Limited.
Analysis of Independent Auditors’ Report to the Shareholders of Janata Bank

Limited:
The audit report provided by the independent auditors of Janata Bank is an unqualified report.
The audit opinion of Janata Bank represents that the financial statements of the company give a
true and fair view of the financial state of Janata Bank as at 30 June, 2018 and of the results of its
regulations.
statements are free from material misstatements. The audit is conducted based on
1) a test basis

Companies Act 1991 as amended in 2013 and the rules and regulations issued by Bangladesh
Bank, we also report the following:
(a) we have obtained all the information and explanation which to the best of our knowledge and
(b) in our opinion, proper books of accounts as required by law have been kept by the Group and
the Bank so far as it appeared from our examination of those books and proper returns adequate
for the purposes of our audit have been received from branches not visited by us
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(c) the consolidated balance sheet and consolidated profit and loss account of the Group and the
are in agreement with the books of accounts;
(d) the consolidated financial statements of the Group and the separate financial statements of
the Bank have been drawn up in conformity with prevailing rules, regulations and Bangladesh
Financial Reporting Standards as well as with related guidance, circulars issued by Bangladesh
Bank and discussion held in tripartite meeting on 03 April 2018 amongst Inspection Team of
Bangladesh Bank, External Auditors and the Management of Janata Bank Limited and subsequent
letter no. DBI- 2(UB-2) /2230/2018-1051 dated 18/04/2018 issued by Bangladesh Bank.
(e) Provisions as explained in note 07.14 and 13.06.02 have been made for loans and advances in
terms of the Bangladesh Bank letter no DBI- 2(UB-2) /2230/2018-1051 dated 18/04/2018;
(f) the records and statements submitted by the branches have been properly maintained and
(g) the information and explanation required by us, as it appeared from our examination on a
test basis, have been received and reported accordingly;
(h) to the extent noted during the course of our audit work performed on the basis stated under
statements of the Group and the separate financial statements of the Bank and considering the
reports of the management to Bangladesh Bank on anti-fraud internal controls and instances of
fraud and forgeries stated under the Management’s Responsibility for the Financial Statements
and Internal Control:
i) internal audit, internal control and risk management arrangements of the Group and
the Bank appeared to be with immaterial control deficiencies as identified in
management report;
ii) nothing has come to our attention regarding material instances of forgery or
the employees of the Bank and its related entities;
(i) financial statements of subsidiary companies of the Bank namely Janata Exchange Company
Srl Italy, Janata Exchange Co. Inc. USA and Janata Capital and Investment Limited Dhaka have
been audited by Trementozzi Angelo, United Financial CPA P.C and Malek Siddiqui Wali
Chartered Accountants respectively on 31st December 2017. These accounts have been properly
reflected in the consolidated financial statements;
(j) Capital to Risk- weighted Asset Ratio (CRAR) as required by the Bangladesh Bank has been
maintained on consideration of the Bangladesh Bank letter no DBI- 2(UB-2) /2230/2018-1051
dated 18/04/2018. Cash Reserve Requirement (CRR) and Statutory Liquidity Reserve (SLR) have
been maintained as per applicable rules and regulations;
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(k) we are not aware of any other matters, which are required to be brought to the notice of the
shareholders of the Bank; and
(l) we have reviewed over 80% of the risk weighted assets of the Bank and we have spent around
10,540-man hours for the audit of the books and accounts of the Bank.
The auditors assessed the accounting principles used and significant estimates made by
management which were reasonable according to Bangladesh Accounting Standards (BAS).
There's no problem of limitation of scope, accounting policy and procedures, disclosures and
accounting estimates made by management or other. The auditors conducted audit plan and
analytical procedures properly. So, it is concluded that this audit report is an unqualified audit
report.
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Analysis of Audit Report on AB Bank Ltd.
At a glance AB Bank Ltd:

AB Bank (formerly Arab Bangladesh Bank) is a leading private sector bank in Bangladesh
established in 31 December 1981.This was the first joint venture private bank in Bangladesh. On
14 November 2007 Bangladesh bank approved the name change to AB Bank from Arab
Bangladesh Bank. A former deputy managing director was charged with embezzling 3.25 billion
taka from the bank. In 2014 AB bank completed its acquisition of Cash link Bangladesh Limited.
A former vice president and his wife were sentenced to prison terms for embezzlement from the
bank in 2016
Analysis of Independent Auditors’ Report to the Shareholders of AB Bank

Limited:
The audit report provided by the independent auditors of AB Bank is an unqualified report.
The audit opinion of AB Bank represents that the financial statements of the company give a true
and fair view of the financial state of AB Bank as at 30 June, 2018 and of the results of its
regulations.
1) a test basis

In accordance with the Companies Act 1994, Bangladesh Securities and Exchange Rules 1987,
the Bank Company Act 1991 (as amended) and the rules and regulations issued by Bangladesh
Bank, we also report the following:
(a) we have obtained all the information and explanations which to the best of our knowledge
and belief were necessary for the purpose of our audit and made due verification thereof;
(b) to the extent noted during the course of our audit work performed on the basis stated under
the 'auditors' responsibility' section in forming the above opinion on the financial statements of
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the Bank and considering the reports of the management to Bangladesh Bank on anti-fraud
internal controls and instances of fraud and forgeries as stated under the management's
responsibility section for the financial statements and internal control:
(i) internal audit, internal control and risk management arrangements of the Bank, as
disclosed in note 1.15 appeared to be materially adequate;
(ii) nothing has come to our attention regarding material instances of forgery or
employees of the Bank and its related entities;
(c) financial statements of all subsidiaries of the Bank have been audited by other auditors and
have been properly reflected in the consolidated financial statements;
(d) in our opinion, proper books of account as required by law have been kept by the Bank so far
as it appeared from our examination of those books;
(e) the consolidated balance sheet and consolidated profit and loss account of the Group and the
(f) the expenditures incurred during the year were for the purposes of the Bank’s business;
(g) the financial statements of the Bank have been drawn up in conformity with prevailing rules,
regulations and Bangladesh Financial Reporting Standards as explained in note 1.12 as well as
with related guidance’s issued by Bangladesh Bank;
(h) adequate provisions have been made for advances which are, in our opinion, doubtful of
recovery;
(i) the records and statements submitted by the branches have been properly maintained and
(j) the information and explanations required by us have been received and found to be
satisfactory; and
(k) we have reviewed 82% of the risk weighted assets of the Bank and we have spent around 6,990
person hours for the audit of the books and accounts of the Bank
analytical procedures properly. So it is concluded that this audit report is an unqualified audit
report.
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Analysis of Audit Report on Islami Bank Bangladesh Ltd.
At a glance Islami Bank Bangladesh Limited:

Islami bank of Bangladesh became incorporated on 13 March 1983 as a public limited company
under the Companies Act 1913. It has 36.91% local and 63.09% foreign shareholders. Up to Dec
2016, IBBL has 332 branches including 59 AD Branches & 03 Offshore Banking Units as well as
has more than 13,500 staffs. In addition to that IBBL maintains its own 497 ATM Booths, 33 IDM
(IBBL Deposit Machine) along with 6,000 shared ATM network across the country. IBBL mobilizes
around 29% of the country remittance. In 2015, it serves US$3,903.21 million out of US$15,316.75
million of total country remittance. As such, IBBL is the largest private banking network in
Bangladesh. When IBBL was established, it was the first bank in south-east Asia to provide
banking service based on Shariah. The bank is listed with both Dhaka Stock Exchange Ltd. and
Chittagong Stock .
Analysis of Independent Auditors’ Report to the Shareholders of IBBL:

The audit report provided by the independent auditors of IBBL is an unqualified report.
The audit opinion of IBBL Bank represents that the financial statements of the company give a
true and fair view of the financial state of IBBL Bank as at 30 June, 2018 and of the results of its
regulations.
1) a test basis

Companies Act, 1991 as amended and the rules and regulations issued by Bangladesh Bank, we
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the Auditors ‘Responsibility section in forming the above opinion on the consolidated financial
reports of the Management to Bangladesh Bank on anti-fraud internal controls and instances of
fraud and forgeries as stated under the Management’s Responsibility for the Financial
Statements and Internal Control.
1.Internal audit, internal control and risk management arrangements of the Group and
the Bank as disclosed in note 3.24 of the financial statements appeared to be materially
adequate.
2.Nothing has come to our attention regarding material instances of forgery or

employees of the Bank and its related entities other than matters disclosed in note 3.24.8.
c) financial statements of all subsidiary companies of the Bank have been audited by other
auditors and have been properly reflected in the consolidated financial statements.
d) in our opinion, proper books of account as required by law have been kept by the Group and
the Bank so far as it appeared from our examination of those books.
are in agreement with the books of account.
f) the expenditure incurred was for the purposes of the Bank’s business
standards as well as with related guidance issued by Bangladesh Bank.
h) adequate provisions have been made for investments, other assets and off-balance sheet items
which are, in our opinion, doubtful of recovery.
12,400-person hours for the audit of the books and accounts. The auditors assessed the
accounting principles used and significant estimates made by management which were
properly. So it is concluded that this audit report is an unqualified audit report.
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Analysis of Audit Report on Dutch-Bangla Bank
Bangladesh Ltd.
At a glance DBBL:
Dutch-Bangla Bank believes in its uncompromising commitment to fulfill its customer needs and
satisfaction and to become their first choice in banking. Taking cue from its pool of esteemed
clientele, Dutch-Bangla Bank intends to pave the way for a new era in banking that upholds and
epitomizes. Our operating profit and net profit after tax growth increased in 2017. Deposit
growth was 12.8% whereas credit growth was higher than deposits as 19.5%. Import businesses
increased by 12.5% and export businesses by 9.4%. Our strategic investments in IT infrastructure,
branch, ATM network, mobile banking services and human capital continued in 2017. DBBL has
been consciously making these strategically important investments to provide much better
customer service with a wide range of products that will definitely bring long-term stable growth
and a more inclusive banking for all of Bangladesh.
Analysis of Independent Auditors’ Report to the Shareholders of DBBL:

The audit report provided by the independent auditors of DBBL is an unqualified report.
The audit opinion of DBBL Bank represents that the financial statements of the company give a
true and fair view of the financial state of DBBL Bank as at 30 June, 2018 and of the results of its
regulations.
1) a test basis

In accordance with the Companies Act 1994, Securities and Exchange Rules 1987, the Banking
Companies Act, 1991 (as amended) and the rules and regulations issued by Bangladesh Bank, we
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the Auditor’s Responsibility section in forming the above opinion on the financial statements of
the Bank and considering the reports of the Management to Bangladesh Bank on anti-fraud
internal controls and instances of fraud and forgeries as stated under the Management’s
Responsibility for the Financial Statements and Internal Control
i) internal audit, internal control and risk management arrangements of the Bank, as
disclosed in the notes to the financial statements appeared to be materially adequately
ii)nothing has come to our attention regarding material instances of forgery or

employees of the Bank and its related entities;
(c) in our opinion, proper books of account as required by law have been kept by the Bank so far
as it appeared from our examination of those books;
(d) the balance sheet and profit and loss account of the Bank dealt with by the report are in
agreement with the books of account and return;
(e) the expenditure incurred and payments made were for the purposes of the Bank’s business;
(f) the financial statements of the Bank have been drawn up in conformity with prevailing rules,
regulations and accounting standards as well as with related guidance issued by Bangladesh
Bank;
(g) adequate provisions have been made for advances and other assets which are, in our opinion,
doubtful of recovery;
(h) the records and statements submitted by the branches have been properly maintained and
(i) the information and explanation required by us have been received and found satisfactory;(j)
we have reviewed over 80% of the risk weighted assets of the Bank and we have spent around
3,000-person hours for the audit of the books and accounts of the Bank; and
(k) Capital to Risk-Weighted Asset Ratio (CRAR) as required by the Bangladesh Bank has been
maintained adequately during the year.
analytical procedures properly. So it is concluded that this audit report is an unqualified audit
report.
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Analysis of Audit Report on Mutual Trust Bank Ltd.
At a glance MTB:
Mutual Trust Bank Limited started its banking activities on 24 October, 1999 following the
issuance of license by Bangladesh Bank on 05 October of the same year. The vision of Mutual
Trust Bank, as expressed by the initiators was to build a perfect world-class bank in performance
and by choice of the people. At the same time its mission was to be a client-oriented company
equipped with cutting-edge technology and dynamic work force.
Analysis of Independent Auditors’ Report to the Shareholders of MTB:

The audit report provided by the independent auditors of MTB is an unqualified report.
The audit opinion of MTB Bank represents that the financial statements of the company give a
true and fair view of the financial state of MTB Bank as at 30 June, 2018 and of the results of its
regulations.
1) a test basis

ln accordance with the Companies Act, 1994, the Securities and Exchange Rules 1987, the
Banking Companies Act, 1991 and the rules and regulations issued by Bangladesh Bank, we also
report that:
(i) we have obtained all the information and explanations which to the best of our knowledge
and belief were necessary for the purpose of our audit and made due verification thereof;
(ii) to the extent noted during the course of our audit work performed on the basis stated under
the Auditor’s Responsibility section in forming the above opinion on the consolidated financial
statements and considering the reports of the Management to Bangladesh Bank on anti-fraud
internal controls and instances of fraud and forgeries as stated under the Management’s
Responsibility for the financial statements and internal control:
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(a) internal audit, internal control and risk management arrangements of the Group as
disclosed in the financial statements appeared to be materially adequate;
(b) nothing has come to our attention regarding material instances of forgery or
employees of the Group and its related entities;
(iii) financial statements of two subsidiaries namely, MTB Securities Limited, MTB Capital
Limited have been audited by Khan Wahab Shafique Rahman & Co., Chartered Accountants and
MTB Exchange (UK) Limited have been audited by Jahan & Co., Chartered management
Accountants and have been properly reflected in the consolidated financial statements;
(iv) in our opinion, proper books of account as required by law have been kept by the Group so
far as it appeared from our examination of those books;
(v) the records and statements submitted by the branches have been properly maintained and
(vi) the consolidated balance sheet and consolidated profit and loss account together with the
annexed notes dealt with by the report are in agreement with the books of account and
returns;(vii) the expenditures incurred and payments made were for the purpose of the Group’s
business for the year;
(viii) the consolidated financial statements have been drawn up in conformity with prevailing
rules, regulations and accounting standards as well as related guidance issued by Bangladesh
Bank;
(ix) adequate provisions have been made for advance and other assets which are in our opinion,
doubtful of recovery;
(x) the records and statements submitted by the branches have been properly maintained and
(xi) the information and explanations required by us have been received and found satisfactory;
(xii) we have reviewed over 80% of the risk weighted assets of the Bank and spent over 1,500-
person hours; and
(xiii) Capital to Risk-weighted Asset Ratio (CRAR) as required by Bangladesh Bank has been
maintained adequately during the year. April 17, 2018 The auditors assessed the accounting
principles used and significant estimates made by management which were reasonable according
to Bangladesh Accounting Standards (BAS). There's no problem of limitation of scope,
accounting policy and procedures, disclosures and accounting estimates made by management
or other. The auditors conducted audit plan and analytical procedures properly. So it is concluded
that this audit report is an unqualified audit report.
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Analysis of Audit Report on Social Islami Bank Ltd.
At a glance SIBL:
Social Islami Bank Limited is a Shariah compliant bank in Bangladesh which started operations
on 22 November 1995.SIBL was founded by Prof. Dr. M. A. Mannan; Dr. Hamid Al Gabid- Former
Secretary General, O.I.C.; Dr. Abdullah Omar Nasseef-Former Secretary General, World Muslim
League; and Mr. Ahmed M. Salah Jamjoom-Former Commerce Minister, Kingdom of Saudi
Arabia. It is a public limited company registered under the Companies Act of 1994 and regulated
by Bank Company Act 1991. The bank is an Islamic bank, based on Islamic Sharia law forbidding
usury. The Bank engages in corporate social responsibility through donations. This bank is
consistently becoming one of the best banks in Bangladesh.
Analysis of Independent Auditors’ Report to the Shareholders of SIBL:

The audit report provided by the independent auditors of SIBL is an unqualified report.
The audit opinion of SIBL Bank represents that the financial statements of the company give a
true and fair view of the financial state of SIBL Bank as at 30 June, 2018 and of the results of its
regulations.
1) a test basis

Company Act, 1991 as amended in 2013 and the rules and regulations issued by Bangladesh Bank,
we also report the following:
(a) we have obtained all the information an explanation which to the best of our knowledge and
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reports of the management to the Bangladesh Bank on anti-fraud internal controls and instances
of fraud and forgeries as stated under the Management’s Responsibility for the Financial
Statements and Internal Control:
(i) internal audit, internal control and risk management arrangements of the Group and
the Bank as disclosed in note 2.18 appeared to be adequate;
(ii) nothing has come to our attention regarding material instances of forgery or
employees of the Bank and its related entities other than matters disclosed in note 2.18.h;
(c) financial statements of all subsidiary companies of the Bank have been audited by us and have
been properly reflected in the consolidated financial statements;
(d) in our opinion, proper books of accounts as required by law have been kept by the Group and
the Bank so far as it appeared from our examination of those books;
(e) the consolidated balance sheet and consolidated profit and loss account of the Group and the
(f) the expenditure incurred was for the purposes of the Bank’s business;
(g) the consolidated financial statements of the Group and the separate financial statements of
the Bank have been drawn up in conformity with prevailing rules, regulations and Bangladesh
Financial Reporting Standards as explained in note 2 as well as with related guidance, circulars
issued by Bangladesh Bank and decision taken in tripartite meeting amongst Inspection Team of
Bangladesh Bank, External Auditors and the Management of Social Islami Bank Limited held on
19 February 2017 and subsequent letter no. DBI-4/42(2)/2017-348 dated 20 February 2017 issued
by Bangladesh Bank.
(h) provisions have been made for the investments, other assets and off-Balance Sheet items
which are, in our opinion, doubtful of recovery;
(i) the records and statements submitted by the branches have been properly maintained and
(j) the information and explanation required by us have been received and found satisfactory;
and(k) we have reviewed over 80% of risk weighted assets of the Bank and we have spent around
4,032-person hours for the audit of the books and accounts of the Bank. The auditors assessed
the accounting principles used and significant estimates made by management which were
properly. So, it is concluded that this audit report is an unqualified audit report.
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Analysis of Audit Report on One Bank Ltd.
At a glance One Bank Limited:

ONE Bank Limited (OBL) is a private sector commercial bank in Bangladesh. It is in the business
of taking deposits from public through various saving schemes and lending the fund in various
sectors at a higher margin. ONE Bank Limited started its activities in Bangladesh from May
1999.bank is consistently becoming one of the best banks in Bangladesh.
Analysis of Independent Auditors’ Report to the Shareholders of OBL:

The audit report provided by the independent auditors of One Bank is an unqualified report.
The audit opinion of One Bank represents that the financial statements of the company give a
true and fair view of the financial state of One Bank as at 30 June, 2018 and of the results of its
regulations.
1) a test basis

Company Act, 1991 and the rules and regulations issued by Bangladesh Bank, we also report the
following:
a) we have obtained all the information and explanation which to the best of our knowledge and
the Auditor’s Responsibility section in forming the above opinion on the consolidated financial
reports of the Management to Bangladesh Bank on anti-fraud internal controls and instances of
fraud and forgeries as stated under the Management’s Responsibility for the Financial
Statements and Internal Control:
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the Bank as disclosed in note 2.23 of the financial statements appeared to be materially
adequate;
employees of the Bank and its related entities other than matters disclosed in note 2.24
of these financial statements;
c) financial statements of the subsidiary of the Bank have also been audited by us and have been
properly reflected in the consolidated financial statements;
the Bank so far as it appeared from our examination of those books;
f) the expenditure incurred was for the purposes of the Bank’s business;
h) adequate provisions have been made for advances which are, in our opinion, doubtful of
recovery;
3,675-person hours for the audit of the books and accounts of the Bank. Dhaka, 15 April 2018
analytical procedures properly. So, it is concluded that this audit report is an unqualified audit
report.
23 | P a g e
Analysis of Audit Report on BASIC Bank Ltd.
At a glance BASIC Bank Limited:
BASIC Bank Limited is one of seven state owned banks in Bangladesh. In 2016 the finance
minister in a statement described the state of the bank as weak due to graft by top officials of the
bank and would require some time for improvement. BASIC Bank UK Ltd and other international
banks had censured Basic bank over irregularities. Since 2012 Basic bank had been frozen out of
international transactions as a result of the irregularities.
Analysis of Independent Auditors’ Report to the Shareholders of Basic Bank

ltd.
The audit report provided by the independent auditors of Basic Bank ltd. is a qualified report.
Basis for Qualified Opinion:

As disclosed in Note 12 to the financial statements, the Bank has made provision for loans &
advances Taka 2,985.01 million whereas we have observed that a further provision of Taka
1,359.40 million is required on account of loans & advances. As a result, provision for loans and
advances is understated by Taka 1,359.40 million and net profit after tax as well as Core Capital
(Tier-1) is overstated to the same extent. However, Bangladesh Bank (Central Bank) has allowed
to make provision of the said amount i.e. Taka 1,359.40 million within 30 June 2013 vide
Bangladesh Bank letter no. DBI-2
The audit opinion of BASIC Bank represents that the financial statements of the company don’t
give a true and fair view of the financial state of BASIC Bank as at 30 June, 2018 and of the results
of its operations and its cash flow for the year then ended. This audit opinion also represents the
bank doesn’t comply with the applicable sections of the Companies Act 1994 and other applicable
laws and regulations.
Bangladesh Standards on Auditing (BSA).The audit opinion provides that the financial
statements are not free from material misstatements. The audit is conducted based on
1) a test basis
24 | P a g e
The auditor provider opinion based on these conditions:
i) we have obtained all the information and explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit and made due verification thereof except
those matters mentioned in the management letter;
ii) in our opinion, proper books of account as required by law have been kept by the Bank so far
as it appeared from our examination of those books and proper returns adequate for the purposes
of our audit have been received from branches not visited by us;
iii) the balance sheet and profit and loss account of the Bank dealt with by the report are in
agreement with the books of account and returns;
iv) the expenditure incurred was for the purpose of the Bank's business;
v) the financial position of the Bank as at 31 December 2012 & the profit for the year then ended
have been properly reflected in the financial statements & that of the Bank except the matter
described above in the basis for qualified opinion paragraph; the financial statements of the Bank
have been prepared in accordance with the generally accepted accounting principles;
vi) the financial statements have been drawn up in conformity with the Bank Companies Act
1991 and in accordance with the accounting rules and regulations issued by Bangladesh Bank;
vii) adequate provisions have been made except for the matters described above in the basis for
qualified opinion paragraph;
viii) the financial statements of the Bank conform to the prescribed standards set in the
accounting regulations issued by Bangladesh Bank after consultation with the professional
accounting bodies of Bangladesh;
ix) the records and statements submitted by the branches have been properly maintained and in
the financial statements, except those matters mentioned in the management letter;
x) the information and explanations required by us have been received and found satisfactory;
xi) we have reviewed over 80% of the risk weighted assets of the Bank and we have spent around
5,500-man hours for the audit of the books and accounts of the Bank; we have covered 30
branches (15 branches each auditor) which have been selected by the bank authority;
xii) guidelines of Core Risk Management issued by Bangladesh Bank vide BRPD circular no. 17
25 | P a g e
Analysis of Audit Report on Agrani Bank Ltd.
At a glance Agrani Bank Limited:

Agrani Bank Limited was established on 26 March 1972 by combining two abandoned Pakistani
banks Commerce Bank and Habib Bank. The Bank is fully owned by the Government of
Bangladesh. Agrani Bank is governed by a Board of Directors consisting of 12 members headed
by a Chairman. As of 2009, the bank has 11 Circle offices, 34 Divisions in head office, 62 zonal
offices and 941 branches including 27 corporate and 40 AD (authorized dealer) branches. It has
been corporatized on 15 November 2007 and emerged as Agrani Bank Limited (ABL) taking over
assets, liability and goodwill of Agrani Bank. The authorized capital of the Bank was Tk 8 billion.
They are also the owners of Agrani Bank Cricket Club.
Opinion
In our opinion, the consolidated financial statements of the Group and also separate financial
statements of the Bank give a true and fair view of the consolidated financial position of the
Group and the separate financial position of the Bank as at 31 December 2017, and of its
consolidated and separate financial performances and its consolidated and separate cash flows
for the year then ended in accordance with Bangladesh Financial Reporting Standards, as
explained in note # 2 to the financial statements.
Emphasis of Matters
Without qualifying our opinion, we draw attention to the following matters:
1. As disclosed in note # 12.5, 12.6 and 13.5 to the financial statements, the Bank has explained
the basis for recognition and measurement of provision for classified loans & advances,
unclassified loans & advances and also for calculation of regulatory capital amounts.
2. As disclosed in note # 12.14 to the financial statements, the Bank has explained the basis for
recognition and measurement of provision for Employees’ Superannuation Fun
3. As disclosed in note # 13.4 and 13.4(a) to the financial statements, the Bank has maintained
risk-based capital amounting to Tk. 3,463.41 Crore (Solo basis Tk. 3,448.26 Crore) against the
requirement of Tk. 3,416.40 Crore (Solo basis Tk. 3,367.88 Crore) specified by Bangladesh Bank
vide BRPD Circular # 18 dated 21 December 2014 on Guidelines on Risked Based Capital
Adequacy (Revised Regulatory Capital Framework in line with Basel III) as at 31 December 2017.
Consequently, this result in a surplus of Tk. 47.01 Crore on a consolidated basis and a surplus of
Tk. 80.38 crore on Solo basis for Minimum Capital Requirement (MCR) of the Bank. In this regard
26 | P a g e
we draw your attention to note # 13.4 and 13.4(a) to the financial statements. The Bank has
maintained Capital Conservation Buffer amounting to Tk. 47.01 crore (solo Tk. 80.38 crore)
against the requirement of Tk. 427.05 crore (solo Tk. 420.99 crore) specified by Bangladesh Bank
vide BRPD Circular # 18 dated 21 December 2014 on Guide lines on Risk-Based Capital Adequacy
(Revised Regulatory Capital Framework in line with Basel III) as at 31 December 2017.
Consequently, this results in a shortfall of Tk. 380.04 crore on a consolidated basis and Tk. 340.61
crore on solo basis in maintaining Capital Conservation Buffer.
4. The consolidated financial statements of the Group have been prepared on the basis of the
financial statements of the Bank and its six subsidiaries, namely, Agrani Exchange House Private
Limited, Agrani Remittance House SDN, BHD, Agrani Equity and Investment Limited, Agrani
SME Financing Company Limited, Agrani Exchange Company (Australia) Pty. Limited and Agrani
Remittance House Canada Inc. While preparing the consolidated financial statements of the
Group, management of the Bank has considered unaudited financial statements of Agrani
Exchange Company (Australia) Pty. Limited.
5. As disclosed in note # 9.1.ii to the financial statements, the Bank has explained the reason for
continuing the business operation of Agrani Remittance House Canada Inc. without having
further approval from Bangladesh Bank.
Other Matters
The consolidated and separate financial statements of the Group and the Bank for the year ended
31 December 2016 were jointly audited by MABS & J Partners Chartered Accountants and
ACNABIN, Chartered Accountants, who expressed an unmodified opinion on those financial
statements on 30 April 2017.
Auditors analysis the report bases on these conditions:

In accordance with the Companies Act 1994, the Bank Company Act, 1991 and the rules and
regulations issued by Bangladesh Bank, we also report the following:
a) we have obtained all the information and explanations which to the best of our knowledge and
statements of the Group and the financial statements of the Bank and considering the reports of
the management to Bangladesh Bank on anti-fraud internal controls and instances of fraud and
forgeries as stated under the Management’s Responsibility for the financial statements and
Internal Control:
27 | P a g e
the Bank as disclosed in note # 2 to the financial statements appeared to be materially
adequate;
employees of the Bank and its related entities other than matters disclosed in these
financial statements;
c) while preparing the consolidated financial statements of the Group, management of the Bank
has considered audited financial statements of 5 (five) subsidiaries and unaudited financial
statements 1(one) subsidiary, as detailed in para-4 under Emphasis of Matters above.
the Bank so far as it appeared from our examination of those books, and proper returns adequate
for the purpose of our audit have been received from the branches not visited by us;
f) the consolidated financial statements of the Group and the separate financial statements of
g) adequate provisions have been made for advances which are in our opinion, doubtful of
recovery, as explained in note # 12.5 and 12.6 to the financial statements;
h) Capital to Risk Weighted Assets Ratio (CRAR) as required by the Bangladesh Bank was 11.25%
of risk weighted assets. The Bank has maintained CRAR of 10.14% (solo 10.24%). Thus, there is
a shortfall of 1.11% (solo 1.01%) of CRAR;
k) we have reviewed over 80% of the risk-weighted assets of the Bank covering 60 branches as
well as head office and spent approximately 14,800 person-hours for the audit of the books and
accounts of the Bank.
28 | P a g e
Note: - 12.5
Provision for Classified loans and advances:
Balance at the beginning of the year 30,574,462,405 22,445,224,575
Add: Recoveries of amount previously written off 902,969,108 652,630,896
Add: Specific provision for the year - 7,739,815,972
Less: Provision Add back during the year (3,899,757,179) -
Less: Written off/ waived (76,191,805) (263,209,038)
Provision held at the end of the year 27,501,482,529 30,574,462,405
Note: - 12.6
General Provision maintained against UC loans:
Balance at the beginning of the year 4,951,279,282 4,502,549,535
Add: Provision made during the year - 1,167,661,857
Less: Provision add back for the year (1,089,623,013) (718,932,110)
Provision held at the end of the year 3,861,656,269 4,951,279,282
Note: - 12.14
Employees Superannuation Fund
Balance at the beginning of the year 500,000,000 23,612
Amount credited during the year 1,431,261,790 1,296,610,994
Provision made during the year 1,260,000,000 500,000,000
Amount Transferred to SAF's SB A/C (2,911,261,790) (1,296,634,606)
Balance at the end of the year 280,000,000 500,000,000
29 | P a g e
Note: - 13.4
Consolidated Minimum Capital Requirement (MCR) under Risk Based Capital (Basel-III):
A. Regulatory Capital:
1. Tier-1 Capital (Going concern capital) 2,081.47 1,690.03
2. Tier-2 Capital (Gone concern capital) 1,381.94 985.67
3. Total Regulatory Capital (1+2):

3,463.41 2,675.70
B. Total Risk Weighted Assets (RWA):

34,164.00 27,044.97
C. Capital to Risk Weighted Assets Ratio (CRAR) (A3 / B) X 100 10.14% 9.89%
D. Tier-1 Capital to RWA (A1 / B) X 100 6.09% 6.25%
E. Tier-2 Capital to RWA (A2 / B) X 100 4.05% 3.64%
F. Minimum Capital Requirement (10% of RWA)

3,416.40 2,704.50
G. Capital Surplus / (Shortfall) (28.80)

47.01
2017 2016
Capital Requirements (Conso.) Required Held Required Held
Tier-1 6.00% 6.09% 5.50% 6.25%
Tier-2 4.00% 4.05% 4.50% 3.64%
Total 10.00% 10.14% 10.00% 9.89%
30 | P a g e
Note: - 13.5
Solo basis Regulatory Capital:
Tier-1 Capital Amount in Crore
Fully Paid-up Capital / Capital lien with BB 2,072.29 2,072.29
Statutory Reserve 779.55 585.94
General Reserve 53.71 57.80
Retained Earnings (103.21) (586.96)
Benefit from Deferred Tax Assets 32.91 16.81
Sub-Total: 2,835.25 2,145.88
Deductions from Tier-1 Capital
Goodwill and all other intangible assets 110.73 118.06
Shortfall in provisions required against classified loans - -
Deferred Tax Assets 658.18 336.25
Sub Total
768.91 454.31
Total Regulatory Tier-1 Capital 1,691.57

2,066.34
Tier-2 Capital
General Provision (UC + SMA + Off B/S exposure+ Consumer 524.00 598.80
Finance)
Subordinated debt/instruments issued by the Bank meeting BB 600.00 -

criteria
Revaluation Reserve (50% of Fixed Assets and Securities & 644.79 644.79
10% of Equities)
Sub Total 1,768.79 1,243.59
31 | P a g e
Deductions from Tier-2 Capital
Revaluation Reserve for Fixed Assets, Securities and Equity 386.87 257.92
Securites
Total Regulatory Tier-2 Capital 1,381.92 985.67
Total Regulatory Capital (Tier-1 + Tier-2) 3,448.26 2,677.24
Conclusion
At the end of our analysis we are able to find out which report is qualified and which is
unqualified. We can also understand the financial situation of a bank and decide whether we
invest or not.
Reference
*Auditors Report – Wikipedia
*Auditors Opinion – Investopedia
* https://www.sonalibank.com.bd/
* https://www.jb.com.bd/
* https://www.agranibank.org/
* https://www.mutualtrustbank.com/
* https://www.dutchbanglabank.com/
* https://www.islamibankbd.com/index.php
* http://abbl.com/
* https://www.onebank.com.bd/
32 | P a g e

Term Paper On Analysis of Audit Report of Listed Bank in Bangladesh

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Term Paper On Analysis of Audit Report of Listed Bank in Bangladesh

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Term Paper on Analysis of Audit

Report of Listed Bank in

3 Executive Summary of Audit Reports 4

4 Main Body 6-28

Sujan Chandra Paul

Department of Accounting & Information Systems

Subject: Submission of Term Paper on “Analysis of Audit Report”

1) Sonali Bank ltd

2) Janata Bank ltd

3) Agrani Bank ltd

6) BASIC Bank ltd

9) One Bank ltd

At a glance Sonali Bank Ltd:

Analysis of Independent Auditors’ Report to the Shareholders of Sonali

2) audit evidence which is sufficient and appropriate.

At a glance Janata Bank Ltd:

Analysis of Independent Auditors’ Report to the Shareholders of Janata Bank

2) audit evidence which is sufficient and appropriate.

The Auditor provided opinion based on these conditions:

At a glance AB Bank Ltd:

Analysis of Independent Auditors’ Report to the Shareholders of AB Bank

2) audit evidence which is sufficient and appropriate.

The Auditor provided opinion based on these conditions:

At a glance Islami Bank Bangladesh Limited:

Analysis of Independent Auditors’ Report to the Shareholders of IBBL:

2) audit evidence which is sufficient and appropriate.

The Auditor provided opinion based on these conditions:

2.Nothing has come to our attention regarding material instances of forgery or

Analysis of Independent Auditors’ Report to the Shareholders of DBBL:

2) audit evidence which is sufficient and appropriate.

The Auditor provided opinion based on these conditions:

ii)nothing has come to our attention regarding material instances of forgery or

Analysis of Independent Auditors’ Report to the Shareholders of MTB:

2) audit evidence which is sufficient and appropriate.

The Auditor provided opinion based on these conditions:

Analysis of Independent Auditors’ Report to the Shareholders of SIBL:

2) audit evidence which is sufficient and appropriate.

The Auditor provided opinion based on these conditions:

At a glance One Bank Limited:

Analysis of Independent Auditors’ Report to the Shareholders of OBL:

2) audit evidence which is sufficient and appropriate.

The Auditor provided opinion based on these conditions:

Analysis of Independent Auditors’ Report to the Shareholders of Basic Bank

Basis for Qualified Opinion:

2) audit evidence which is sufficient and appropriate.

At a glance Agrani Bank Limited:

Auditors analysis the report bases on these conditions:

Provision for Classified loans and advances:

Balance at the beginning of the year 30,574,462,405 22,445,224,575

Add: Recoveries of amount previously written off 902,969,108 652,630,896

Add: Specific provision for the year - 7,739,815,972

Less: Provision Add back during the year (3,899,757,179) -

Less: Written off/ waived (76,191,805) (263,209,038)

Provision held at the end of the year 27,501,482,529 30,574,462,405

General Provision maintained against UC loans:

Balance at the beginning of the year 4,951,279,282 4,502,549,535

Add: Provision made during the year - 1,167,661,857

Less: Provision add back for the year (1,089,623,013) (718,932,110)

Provision held at the end of the year 3,861,656,269 4,951,279,282

Employees Superannuation Fund

Balance at the beginning of the year 500,000,000 23,612

Amount credited during the year 1,431,261,790 1,296,610,994

Provision made during the year 1,260,000,000 500,000,000