Gazi Anowarul Hoque :
The management authority of Fareast Islami Life Insurance Company Limited has involved in widespread corruption and misappropriated Tk34 crore and 73 lakh in the name of “Development Expenditure” in its Annual Financial Report 2013 and 2012.
There are allegations that in absence of Insurance Development and Regulatory Authority Bangladesh (IDRA)’s supervision, the said company management are being looted customers’ profit through the years.
Reviewing financial report it has found that the company had expensed Tk10 crore and 7 lakh in the year 2013 and Tk17crore, 16 lakh in the previous year showing the title “Development Expense” and Tk7 crore 50 lakh as sundry creditors but the report did not mention the cost of any in details that clearly violating the rules of accounting.
According to the rules of Bangladesh Accounting Standards (BAS) that it is mandatory to show any lawful expense of revenue accounts in details and development expense is an immediate expense. There is no scope to show such cost as “Sundry Creditors.”
According to insurance experts, insurance companies often show misappropriated financial report to embezzle the customers’ money. Only IDRA can force to obey BAS rule for transparent accounts.
Ekramul Ameen, FCA told the New Nation (NN), “Every company should give sub-note with the big expense of Annual Report to make transparent accounts.”
“According to auditing rules, a company can show its development expense at provisionary stage as Sundry Creditors but it must not show finally,” he added.
Neaz Mohammed FCA, Partner-Audit and Consultancy of Howladar Yunus & Co told the New Nation, “Sundry creditors are the liabilities of the firm because the firm is supposed to pay the outstanding amount in future as per terms and conditions agreed upon by both the parties. Moreover, development expense is not a credit liability. So, there is no scope to show it as Sundry Creditors finally.”
In this regard, when asked to Hemayat Ullah, Managing Director of Fareast Islami Life Insurance Compny Limited, he told the NN, “This is an academic matter. I am so busy for the year end closing. So, I cannot make any comments just now.”
The management authority of Fareast Islami Life Insurance Company Limited has involved in widespread corruption and misappropriated Tk34 crore and 73 lakh in the name of “Development Expenditure” in its Annual Financial Report 2013 and 2012.
There are allegations that in absence of Insurance Development and Regulatory Authority Bangladesh (IDRA)’s supervision, the said company management are being looted customers’ profit through the years.
Reviewing financial report it has found that the company had expensed Tk10 crore and 7 lakh in the year 2013 and Tk17crore, 16 lakh in the previous year showing the title “Development Expense” and Tk7 crore 50 lakh as sundry creditors but the report did not mention the cost of any in details that clearly violating the rules of accounting.
According to the rules of Bangladesh Accounting Standards (BAS) that it is mandatory to show any lawful expense of revenue accounts in details and development expense is an immediate expense. There is no scope to show such cost as “Sundry Creditors.”
According to insurance experts, insurance companies often show misappropriated financial report to embezzle the customers’ money. Only IDRA can force to obey BAS rule for transparent accounts.
Ekramul Ameen, FCA told the New Nation (NN), “Every company should give sub-note with the big expense of Annual Report to make transparent accounts.”
“According to auditing rules, a company can show its development expense at provisionary stage as Sundry Creditors but it must not show finally,” he added.
Neaz Mohammed FCA, Partner-Audit and Consultancy of Howladar Yunus & Co told the New Nation, “Sundry creditors are the liabilities of the firm because the firm is supposed to pay the outstanding amount in future as per terms and conditions agreed upon by both the parties. Moreover, development expense is not a credit liability. So, there is no scope to show it as Sundry Creditors finally.”
In this regard, when asked to Hemayat Ullah, Managing Director of Fareast Islami Life Insurance Compny Limited, he told the NN, “This is an academic matter. I am so busy for the year end closing. So, I cannot make any comments just now.”
