Financial Reporting System in Government Financial Institute

There is no denying the fact that the report prepared by the government for internal and external use are perpetually governed by the principles and concepts of the government accounting system.

Accuracy: The term “financial statement” is general and is probable to cover like chalk and cheese the broader meanings for altered groups. Reports should be appropriate for the intended users and prepared according to specific standards for their form and content. The specification of standards implies a mutual understanding between the user and the provider on the nature and content of financial information and does not necessarily require a decree, an executive order, or legislation. Rather, convention may serve this function.

Significance: The reports should be relevant to the user who is real. But there is no one typical user with defined and immutable characteristics. The important question is: What changes are needed in the presentation of financial reports to be of service to the prospective user? In the process of making these changes, a determination needs to be made to avoid manipulating inherently complex information, because attempts to simplify it may rob it of its significance. In this regard, Likerman suggests, the report should (a) minimize jargon and acronyms and not be patronising, (b) have a logical structure and layout, (c) have a summary of key points, (d) not have an overwhelming amount of detail, (e) not be unduly distorted by public relations considerations.

Reliability: The characteristics of reliable information are somewhat difficult to enumerate and explain. As a discipline, accounting necessarily implies the verification of facts; some reports may contain information derived from estimates. The degree of estimation determines the reliability of the data.

Implication: One common criticism of government financial information is that there is a surfeit, not a shortage. Many accounts are prepared and provided without taking into account the user’s needs. Relevance cannot be assumed. Users must be purposefully identified and distinguished by type and by interest.

Materiality: The data reported should provide a frame of reference for comparing organisations with similar functions so that the costs of providing similar services can be estimated. The provision of comparable data can also involve rearranging data to conform with the classification selected. Thus, annual accounts, which are generally arranged in terms of appropriation categories, would need to be reclassified. Providing comparable data is yet another manifestation of being responsive to user needs.

Appropriateness: If information is supplied long after the event for which it is intended, the message to users is that compliance is perfunctory. In most governments, however, accounting data are not released until they are approved or cleared by the audit agency. Sometimes, delays may result from undue efforts to be precise. Although a lack of precision may affect reliability, there is an inevitable trade-off between precision and timeliness. For the sake of timeliness, some precision may have to be sacrificed.

Steadiness: The reports should be consistent over time in terms of the nature of the entity reporting, classification, and the accounting basis. Consistency facilitates the preparation and use of data and leads to a mutually acceptable framework.

Expediency: The final criterion for financial reporting is usefulness. To be useful both inside and outside an agency, reports should contribute to an understanding of the current and future activities of the agency’s sources and uses of funds and the diligence shown in the use of funds.

The Accounting Standard emphasises that in a financial statements the following qualitative characteristics must exist:

Importance - information must have the ability to influence the economic decisions of users and be provided in time to influence those decisions.

trustworthiness - (a) information must be dependent upon to represent faithfully what it either purports to represent or could reasonably be expected to represent, and therefore reflects the substance of the transactions and other events that have taken place; (b) the information must be free from deliberate or systematic bias and material error and (c) in its preparation under conditions of uncertainty, a degree of caution must be applied in exercising  necessary judgements.

Comparable - information is comparable if it enables users to discern and evaluate similarities in, and differences between, the nature and effects of transactions and other events over time and across different reporting entities.

Understandable – information is understandable if it can be understood by users that have a reasonable knowledge of business and economic activities and accounting and a willingness to study with reasonable diligence the information provided.

It is significant that in order to write on financial reporting mean writing about the lack of information on the financial status of the government. There is a general impression that, notwithstanding periodic pronouncements about transparency and the availability of information about the financial implications of proposed or ongoing policies, there is very little organized information. What is provided is frequently incomplete, incomprehensible, or out of date. Government operates within an environment, where, in most of the cases, information is not focused and judged simply on the basis of ‘bottom line’ profit figures, hence the existence of certain differences between the private and public sectors in terms of the objective of financial reporting.

The economic strategy of World Bank by Kh. Atiar Rahman

There is no denying the fact that Motivation is a process in which effective work force environment among the organisations is possible to be developed in a systematic manner. There are so many methods of motivation out of which face to face interview, open ended question, creating awareness by providing proper incentives, facilities provided essential for them to work, congenial atmosphere, equipments as required for producing goods and services are main. According to A.H Masloo, a famous economist, there is a specific need pyramid with which the people can be motivated to achieve economy, efficiency and effective ness. These are: Physiology, safety, security, egoistic and self actualisation need. Under the auspices of such needs, the targeted goals can be achieved virtually. The embryonic countries constantly demonstrate a predisposition to bring in the policy pronouncement of highly developed countries in their delicate resources despite the shifting of overall socio-economic procedure virtually. In bona fide world state of affairs aspects that next to influence the strategy decisions of budding countries are found fictional in progressive countries. It is evident that reserve constraints and technical non-progressive phenomena are two focal setting that formulate the budding countries reliant upon the advanced countries. The highly developed countries make available financial assistance for the economic development of the developing countries through unusual multilateral and bilateral donor agencies, which are officially termed as

Despite continued financial assistance, the alarming poverty rate persuaded the Bank to think about the effectiveness of its financial assistance. Presently the Bank as policy shift has declared its overarching mission in Bangladesh is the ‘Poverty Alleviation’. Five themes underpin the Bank’s strategy to help reduce poverty in Bangladesh:
q    helping to improve macroeconomic management essential for rapid and sustainable economic growth which is a precondition for poverty reduction
q    promoting a competitive private sector as the engine of growth
q    promoting better public-sector management and better public services accessibility by the poor
q    accelerating agricultural growth and rural development where the vast majority of the poor live, and
promoting faster and fairer human development to reduce malnutrition and the burden of ill health and enhance access to education (The World Bank, 1998)

The economic growth of Bangladesh

Suffice it to say that Economic growth is the indicator of the growth of annual income of a country. The rate of economic growth of a country is the percentage annual change in national income. In case of Bangladesh economy where mixed economic system is prevailing, national output in 1994/95 was valued at Tk.117026 crore (27.53 billion US Dollar) and in 1995/96 it was Tk. 130160 crore (30.62 billion US Dollar). Output grew in value by Tk.13134 crore that gives a nominal growth rate between 1994/95 and 1995/96 of 11.1%. On the other hand, this is not the real change in growth because living standards will only be improved by real changes in output. Some of 11.1% increase in output might be due to inflation. If the inflation rate over the period was 4.1% then the real increase in the value of output was 7%. Given the population growth in the country X is 2.17%, this implies that the real value of output per head grew by 4.83 %(7%-2.17%).

The potential economic growth rate is the rate of growth achievable if all wealth were fully employed and used resourcefully. It is the highest rate at which the economy of a country could nurture. Prospective growth will be exaggerated by any change in resources – natural resources, labor or capital.

Bangladesh is an agriculture-based overpopulated developing country. Political instability, natural calamities, poverty and illiteracy are the common feature of Bangladesh. Following table shows the general condition:

Population	124 million(1997)
Population Growth Rate	2.17%
Area	147570 Sq. K.M.
Literacy(Adult)	42.6%
GDP(at current market value)	Tk.140258 crore (1996-97)
Growth Rate	5.7%
Rate of Savings (Domestic)	7.7%	}of GDP
Total Rate of investment	17.4%
Export	13%
Import	22%
ADP financing by domestic resources	48.93%

With poor natural resources and high unemployment rate Bangladesh is trying to improve its economic condition. For financing Annual Development Programme (ADP) it has to depend on foreign loans, debts and grants, which are about 52%. Still Bangladesh has been experiencing steady economic growth since its independence in 1971. Bangladesh was heavily dependent on agricultural sector. In 1973/74 contribution of agricultural sector to GDP was 48.3% where in 1996/97 it was about 32.4%. However industrial sector does not grow as expected. Its contribution remains almost same, as it was 11.1% in 1973/74. Political instability and inconsistent economic and industrial policy might have the consequent reasons. Other professional and commercial service sectors are rising from 36% to about 50%. Rural people living below poverty level were 73% in 1973/74. It falls to 50% in 1991/92. Infant mortality rate fell from 154 per thousand in 1970s to 80 per thousand in 1990s. Females that were ideal are coming to the garments industry. About one million females are now working in the garments industry. Per catia income rises from Tk.3066 in 1980/84 to Tk.11284 in 1996/97.

The following table and graph show the economic growth of Bangladesh over recent seven years.

Rate of Growth of Gross Domestic Product

Year	Growth Rate of GDP(%)
1990/91	3.4
1991/92	4.2
1992/93	4.5
1993/94	4.2
1994/95	4.4
1995/96	5.3
1996/97	5.7

Table: Growth rate of GDP

(Valued at price 0f 194/85)

From aforementioned table and chart, it is evident that Bangladesh has been practicing a considerable economic growth over the past years. The growth rate given here is adjusted with the inflation rate. Actually, a country’s national economic growth depends on annual demand where savings, government spending as well the trend and overall position of surplus. Such surplus depend on the difference between balance of export and import. Export done more in a year, the nature of consumer price index becomes positive and inflation rate may prevail in favorable side.

How can we prevent over populated countries

There is no denying fact that Bangladesh is an overpopulated country for which its economic as well as financial stringency always remains in shortage stage. Since, the country which is over populated can face lots of problems. These problems are food, shelter, and clothing and even in all levels of development over population cannot be treated as a good symptom. In Asia, Europe Latin America and even in some parts of Australia, there is a tremendous pressure on their national growth. In China, there are lots of problems emanating from heavy rush of population phenomena. Per Capita income of china is 25 dollar but the market prices are higher, so being an over populated country, the resources are always sparse. The birth control system of China is not restricted. The people who are educated and honest can adopt such policy, as compared to China and India, the growth rate of population census in Bangladesh is at satisfactory standard. The land is vastly dominated where the no. of population is at minimum level.

In Great Britain, per capita income of the people is $30 dollar, and as such it is possible for them to survive with the resources what they have. The problems of United Kingdom are as follows:

1) Due to discrimination of castes, and creeds, regional populations are over populated and vast.

2) The people lived by farming cannot take birth control system.

3) Some people in some parts of Great Britain are very conservative and being such clamorous, they are not found so much interested in doing so.

4) Some business men in Wales and Bristol are wealthy and highly influential in respect of family tradition, birth and tribe. They always give their verdict in keeping more children.

5) In London, most of the people are well educated and ambitious and as a result, they are very much hopeful to adopt such birth control system. In 1980, the number of population was 20 million, but presently this population has augmented to 21.5 million.

According to Thomas Malthus and L. Robinson, the power of population is undoubtedly greater than the power in the earth to produce valuables materials for humans. Presently, there are not enough amenities for every man on earth because in order to strike back famine, food is not strewn extensively. The reasons are mainly bedded on political, economic and social factors. In this connection, that the earth’s population is augmenting each year, the forecasting measurement could be realistic to face challenges in near future. In this respect, his prediction has in the meantime become real to some specific issues.

In order to strengthen the population control programme a better awareness among literate and illiterate need to be created so that the over burden of population can be checked. It is evident that the uses of practices of such abortion need to be externalized. Abortion is a useful tool for population control. If it was not practiced, the population would be unjust aim able for the planet. Over population is one of the major problem connected with regions where birth control system are low, although over population is primarily a problem in a developing countries. There are lots of complications that arise when over population occurs. In most developing countries that are over populated, they contain lots of economic problems. There are often high employment rates because there are no jobs in the economy for everyone. As unemployment rates rise, poverty rises as well without adequate supply of food, unemployment rises. This is not lobe alder. As far an example- in crowded regions, where population density is high, there is a higher rustic of handling money, far which curse starts against them.

In view of the above, it is obvious that over population is a great threadbare of economics. It creates unemployment for which the social economic condition of the people situates at low level. Birth control system is highly appreciated nowadays for which the poorer countries are adopting these policies. Abortion is helpful in controlling over population by way of preventing a whole range of other problems. The problems are sequentially great in Africa; these problems are vast and intricate. In South Africa, the people are mostly ignorant and not much educated for which they always suffer from various problems and scarcity of wealth. In one family, it has been found out on a statistics that they possess 10 children each family. As compared to Bangladesh, the birth rate is 21.6% whereas this percentage amounts 40% in South Africa.

The role of donor agency in flourishing the economy of developing countries like Bangladesh

There is no denying the fact that embryonic countries constantly demonstrate a predisposition to bring in the policy pronouncement of highly developed countries in their delicate resources despite the shifting of overall socio-economic procedure virtually. In bona fide world state of affairs aspects that next to influence the strategy decisions of budding countries are found fictional in progressive countries. It is evident that reserve constraints and technical non-progressive phenomena are two focal setting that formulate the budding countries reliant upon the advanced countries. The highly developed countries make available financial assistance for the economic development of the developing countries through unusual multilateral and bilateral donor agencies, which are officially termed as ‘Development Partner’

 

The ‘Development Partner’ all the way through their lending tricks play a vital role in the policy-making method of developing countries. The intact process is now more evident in an interestingly univocal world order that materialize after the collapse of communism as a governing and economic system in the 1980s. The international financial agencies more than ever the World Bank and International Monetary Fund as policy shift pursued a free-market-based world order where the developing countries were urged, cajoled and hard-pressed to initiate market economy through structural modification reforms.

As a result, over the last one-decade developing countries have made changes in their state oriented development strategy mostly in line with the policy advice of the Development Partners.

Development Partners. tend to justify their role in policy decisions of recipient countries that aids are given from the taxpayers’ money of the advanced countries who preserve the right to know whether money is being utilized in proper ways. Despite continued financial assistance by the Development partners a vast majority of world population in the recipient countries live under the poverty line and unable to meet their basic needs. Increasingly Development partners are becoming concerned with the aid effectiveness and often attribute the underdevelopment of third world countries to their inappropriate internal policies. Although the failure of IMF’s policy advice in managing the financial crisis in East Asia has given rise counter argument that the economic crisis afflicting the developing countries was fundamentally global in nature

The World Bank in its policy research report, “Assessing Aid, What works, What doesn’t, and Why” has laid emphasis on the internal policies of the recipient countries as important factors to make aid effective. In different international forums including the Aid Consortium Meeting that held under the auspices of the World Bank, the Development partners review the policy issues of the recipient countries with top priority; and before making any aid commitment want to make it sure that appropriate policy environment is prevailing in the recipient countries.

Among the Development partners the World Bank (WORLD BANK) is the most important whose confessional financial assistance has allowed it enormous access in the policy making process of developing countries which we can see with particular reference to Bangladesh.

 

The WORLD BANK has been working in Bangladesh since 1972, soon after the Independence. Robert D. McNamara was the First WORLD BANK president visited Bangladesh in the year 1972 to assess the aid requirement of the war devastated country. The then highly nationalistic government that led to the liberation of the country from occupying Pakistani forces was very much critical about the Bank’s close allies with the Pakistani regime. The dispute that emerged between the Bank and GOB was the issue of the Bangladesh’s share of debt liability. GOB declined to take the responsibility of debts taken by the erstwhile Pakistan government from different bilateral and multilateral donor agencies/countries. In the First Aid Consortium meeting of donor countries, which was held in Dhaka in March 1973, the Bank exerted pressure upon the government to come to a solution on the debt issue. After long parley the then government had accepted an inherited debt liability of $483 million against the projects, completed before independence and physically located in the territory of the erstwhile East Pakistan. The process through which Bangladesh resolved it’s past debt liability was viewed as highly instructive and mentioned as a glaring example of the Bank’s pressure on Bangladesh. But dependence upon the external aid left very little option for the government of the newly independent country to reject the Bank’s conditional lending offer. Domestic resources that were available to the economy found inadequate to implement the development projects. As a result, despite the Bank’s controversial role in the liberation struggle, the GOB had to accept conditional external assistance to implement the first five-year plan, which was launched in 1973. In the subsequent years, dependence of the country on the mobilisation and influx of foreign funds into Bangladesh for financing not only the development projects but also the import of food items and essential commodities, has become more institutionalised.

 

 

The WORLD BANK as an important single source of aid to Bangladesh co-ordinate the Aid Consortium for Bangladesh. The creation of the Bangladesh Aid Consortium has institutionalised the leadership of the World Bank. The resident mission of the WORLD BANK, which is the largest in Bangladesh, conducts detailed research on different aspects of Bangladesh’s economy. Since 1972 the Bank’s concessional lending arm, the International Development Association (IDA), has financed more than 167 operations with loans of about $8.2 billion. Till September 1998, Bank loans of more than $2.05 billion fund 21 projects in Bangladesh (The World Bank, 1998). Initially the Bank’s approach was more humanitarian; and, the Bank worked closely with others to revive the war-torn country’s economy. Early projects financed by the Bank were cyclone shelters built in the coastal areas of the country. In the early years, the Bank supported efforts to expand agricultural production, which have helped Bangladesh achieve a self-sufficient food supply, and to develop population and family planning programs that have dramatically lowered the high fertility rates. From the mid-1980s, the Bank expanded support for more energy projects and helped to reduce the country’s dependence on imported energy. Since early 1990s the Bank and other Development partners by keeping pace with the global change pushed the government for allowing more private sector participation in the public sector management and diverted the aid flow for the social sectors like health and education, which have direct impact on poverty alleviation.

 

How to enhance the Economic Growth of Bangladesh

Bangladesh is a low-lying riverside country located in South Asia. The country has been enriched with the convergence of the Ganges (Padma), Brahmaputra (Jamuna), and Meghna Rivers and their tributaries which pour out into the Bay of Bengal. Bangladesh is surrounded by India to the east, north, and west and shares a short border with Myanmar (Burma) in the southeast. The country is for the most part flat, with 90% of its landmass less than 10 meters above sea level. With a population of approximately 140 million, Bangladesh is the most densely populated agricultural country in the world. There is no denying the fact that sometimes we cherish to be something which we possibly are not able to achieve in our entire life. One of my sorts of desire is gaining absolute power of my country. I will then definitely take some efficient, corrective, and innovative measures to change Bangladesh’s economy to a different level for the betterment of me as well as for our beloved countrymen. Our country is badly in need of a gradual but an evolutionary change in several sectors for the better flow of the economy. There would be five main steps that I will take to build up Bangladesh’s economy. First thing I would do is set up a perfect strategy for huge industrialization. Though 64.5% countrymen are literate (ICDDRB and ILO report-2006) among which 15% are at least graduate, unfortunately the unemployment rate is still 25% among them because of the less availability for vacancies. Only by making the ground of establishing new industries can give the vacancies and thus reduce the unemployment rate. If I can do industrial revolution then our export will also increase. Moreover, as there will be whiter collar jobs, so brain drain will be reduced which will immensely help to sparkle our economy.

The second one will be related to our morality. Yes, I am talking about self-authorization. I will urge everyone to do their respective duties properly. I will even introduce new laws and punishment to make them do so. I will elide full independence to our law deportment for stopping any sort of conspiracy or corruption. For last six years Bangladesh has become first among all the countries of the world in corruption. Other countries say our country has become a bottomless basket. I will put up my heart and soul effort to turn it from bottom less basket into a flower bouquet. We can only dream of being economically solvent if and only if we can stop the ever increasing corruption in every sector from our country.

The third step will be done considering our geographical structure. Our country is of fauna and flora. Bangladesh’s has so many places of historical interest and so many heavenly places full of natural beauty. On the south, we have the Bay of Bengal. It has the longest and shark free sea beach in the entire world. The hill city Sylhet, Bandar ban, Rangamati, Khagrachori has so many tourist places. Foiz lake, Kaptai, Naaf river, Bhola Heritage Park are some places where there are huge opportunities to gain huge profit by making these places easier to live and visit by foreigners. I would try to make the best use of this natural resource and reestablish those as supreme tourist place to earn a huge foreign currency. The historic ground and structural beauty is also rich in our country. Bagherhat, Shahzalal (R)’s Sat Gambuj mosque are some spectacular places to visit. Moreover Shaheed Minar, Savar Shriti Shoudha etc are some patriotic and pompous sculptures. Dhaka city contains the highest number of mosques. Old Dhaka has there traditional languages, food and dress which attracts the foreigners great deal. Our part city Chittagong is also very beautiful. I will try to turn them to supreme tourist place to earn huge foreign currency.
The next step that I will take is related to our agriculture. Bangladesh is an agricultural country. As 85% of total population are somehow, directly or indirectly related to the sector, so no effort will be successful al all of this sector don’t get established. It is said that Bangladesh will remain alive if its 63 thousand villages live. That means for economic stability we need to work right the root level and that is our village. As our villages have fertile land s and expert farmers so I will give highest portion of subsidy to our agricultural sector. There are some sectors where great economic growth can be achieved. Growing corn, wheat, setting up more fish farm, poultry and dairy farm will help us to help the cause.

In view of the above discussion, the last but not the least thing that I would do is the proper utilization of our natural resources. Bangladesh has huge resources of natural gas that no other countries have. By using this gas we can reduce our production cost in industry , electric plants and also in transports. Jute is also another resource of our country. Once it was regarded as the golden fiber of Bangladesh. I will try to regain its lost glory and in the process earn lots of money. Honey and candle of Sunder band are other famous thing. We also our traditional clothes (Zamdani Sarees), tannery goods, garments, knitwear, prone, hilsa, green vegetables which have great demand in foreign countries. I will definitely ensure the proper exports of these resources. These will be my aim if I get my cherished desire of gaining absolute power once and for all in my entire life. I dearly love my country. I will do whatever it takes to turn it into a real golden Bengal.