Corporate Income Tax | Bangladesh

Accounting Manual is internal accounting recording rules and guideline of an organization for accounting staff. It contains several direction and guideline such as accounting method, book keeping procedure, time frame of recording, requirement and method of keeping supporting documents, maintain chart of accounts, method of resolve unusual items, method of reporting and authorization accounting records. It is complete set of instruction and job description for maintaining and keeping accounting record and rules that required to be followed by accounting staff and related departments of the organization. It is established internally by the senior personnel of the organization or with help of hired consultant who are experienced in this field by following accounting standard and tools. The size and content of accounting manual may vary depending on the size and nature of the business. 

An Accounting manual helps an organization to follow the acceptable accounting standard and maintain compliance related to recording accounting transaction and reporting those report to the respective authority by most convenient way for the benefit the organization.

An accounting manual specify chart of accounts that followed by accounting staff for maintaining record of accounting transaction and reporting purposes. It is very important to maintain same chart of accounts and methods of accounting of different companies when prepare group accounts for same companies of groups regarding performance and situation of different companies of groups and compare the result and ration. It is very important to maintain accounting manual for a multinational companies to coordinate and collaboration accounting practices of parent company and its subsidiaries’  accounting standards which followed by specific accounting standard of the country where they operate business for maintaining statutory compliances. For example, An American Company follows GAAP as accounting practices but a Bangladeshi company follows IAS and IFRS for statutory accounting practices. If an American multinational entity have subsidiary in Bangladesh which have followed different method of accounting practices then it need to coordinate and collaboration both accounting practices to get best understanding and analyzing the performance of individual companies and groups as a whole. In that case an accounting manual gives specific guideline and rules of collaboration and coordination two accounting practices.

Some accounting standards permits the choices of methods for maintaining accounting records such as inventory recording process, one company can follow FIFO, LIFO, and Average cost method. Property, plant and equipment recording process, company can calculate depreciation from inception of usage or full depreciation on first year and not calculating depreciation of last year. There are also several method of depreciation such as straight line method, reducing balance method, double declining method etc. Accounting standards also permits the choices of methods for presenting investment such as fair value and initial cost method depending on the nature of investment. In the same way some standards permits the choices of methods but entity need to follow specific method for continuity and compliance purpose.  Companies of the groups should follow one specific methods for the maintaining similarity in group accounts. If a company of the groups follow different methods without any specific reason then give different results which create problem for analyzing performance. An accounting manual give the specific guideline to follow accounting method which should be followed by the individual company for time period and by the group as whole for continuity and similarity purposes. Sometime changes of method is required for specific or compliance reason  and  those changing process and coordination process also guided by accounting manual.

An accounting manual also gives the time frame regarding time of recording a transaction such as a transaction may be recorded when receiving informal information or supporting documents or after authorization transaction procedure. 

An accounting manual also provides guideline of maintaining and keeping supporting documents such as which documents and authorization process is required as supporting documents corresponding to a transaction. This manual also guides approval and authorization process and personnel depending on the amount and nature of transaction.

Accounting manual provides guideline for resolving unusual transactions which arises time to time and also provide guideline regarding communication pattern with external consultant.

Accounting Manual also provide  guideline and timeframe of statutory reporting for maintaining compliances of regulatory body and groups such as different regulatory bodies require different pattern accounting report for an individual companies and group as whole such as quarterly unaudited report, half yearly report , statutory audit report, FDI return, quarterly return etc. , those compliance report has specific deadline. An accounting manual helps accounting staff for following those deadline and criteria of compliances.

FMCI is well reputed and experienced organization in the field accounting and financial service consultancy. FMCI can design and prepare a modern accounting manual as requirement of local and multinational companies in light of local and international accounting standard to keep updated and compliant in respective to local and international regularities body. FMCI also provides guideline and train accounting staff regarding method of following accounting manual and to maintain compliance.