Accounting System and Financial Reporting of Ngos: Case Study of a Brac’s Project

5254 Words Jan 3rd, 2013 22 Pages
Accounting System and Financial Reporting of NGOs: Case Study of a BRAC’s Project
Munima Siddika1, Mohammad Sarwar Jahan Rekabder2 and A.K.M. Delwar Hossain3

Abstract: In the absence of specific accounting and financial reporting standards and diverse interpretation of certain terms under the laws of the land, it has become a very difficult task to follow a standardized procedure in generation and presentation of accounting and financial information of NGOs. The practices followed by NGOs in Bangladesh are varied and diverse and there by preparation of financial statements are incomparable and difficult for uses to understand. The paper tries to demonstrate financial reporting and accounting system of a BRAC’s
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BEP begun experimentally in 1985, it is an independent education program organized and managed by BRAC with the approval of NGO Bureau of the Government of Bangladesh. The analysis and discussion of reporting systems of BRAC Education Program will give guidance and support to other NGOs about the generation of accounting systems and reporting procedure, and to maintain a transparent system of utilizing grants. 2. LITERATURE REVIEW International Accounting Standards (IAS) doesn’t have specific guidelines for NGOs. Regarding applicability of Accounting Standards to NGOs, the Accounting Standards Board (ASB) has given an opinion in September 1995. “The Institute will issue Accounting Standards for use in the presentation of the general purpose financial statements issued to the public by such commercial, industrial or business enterprises as may be specified by the Institute from time to time and subject to the attest function of its members” It is clear from the above that the Accounting Standards are applicable to NGOs whose some, or more, of the activities are commercial or business in nature. However, it is very difficult to determine what the exact meaning of commercial is or business activities with reference to NGOs. NGOs are not meant for earning profit out of their activities. There are some NGO related laws and regulations in Bangladesh. While registration is not mandatory for any NGOs, 2 types of legal frame work govern NGOs of Bangladesh. a. Laws

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