Accounting standards
Saturday, 21 June 2008
ACCOUNTING in many areas of business in the country continues to be done in the traditional fashion for which it is nothing more than book-keeping or taking stock of routine expenditures and returns. But modern accounting is much more dynamic. It involves regular and meticulous preparation of balance sheets to provide a thorough view of the business organisation including its assets and liabilities. Even the smallest depreciation in assets, such as capital equipment in the organisation as well as the slightest gain in the form of an acquisition by it is recorded in a balance-sheet. Thus, accounting under this system reflects the true state of the business, about its health, good or bad.
A business firm that employs good accounting practice gets the latest and comprehensive picture of the health of the company on a daily basis. It enables the company to detect any undesirable development, the moment it occurs for taking the corrective action. The modern accounting procedure enables the organisation to constantly present its profile as it stands. The profile is of immense value to investors and other decision makers in relation to the company.
Accounting standards of an international level are, no doubt, practised in some business establishments of Bangladesh. But many business organisations do not have an accounting system, consistent with the international standard. The challenge, therefore, is to achieve a uniform accounting standard in all or nearly all business organisations in the country. This is what the Institute of Chartered Accountants of Bangladesh (ICAB) recommended. The ICAB prepared a manual, the Bangladesh Accounting Standards (BAS), long ago. But as it is not being followed by all the country's business organisations. Compliance with the BAS should be made mandatory for all.
Md Amanullah
Kakrail, Dhaka
A business firm that employs good accounting practice gets the latest and comprehensive picture of the health of the company on a daily basis. It enables the company to detect any undesirable development, the moment it occurs for taking the corrective action. The modern accounting procedure enables the organisation to constantly present its profile as it stands. The profile is of immense value to investors and other decision makers in relation to the company.
Accounting standards of an international level are, no doubt, practised in some business establishments of Bangladesh. But many business organisations do not have an accounting system, consistent with the international standard. The challenge, therefore, is to achieve a uniform accounting standard in all or nearly all business organisations in the country. This is what the Institute of Chartered Accountants of Bangladesh (ICAB) recommended. The ICAB prepared a manual, the Bangladesh Accounting Standards (BAS), long ago. But as it is not being followed by all the country's business organisations. Compliance with the BAS should be made mandatory for all.
Md Amanullah
Kakrail, Dhaka