Accelerated Route offered by CIMA for MBA holders in Bangladesh

I am really in TOTAL doubt about the quality and recognition of CIMA membership. In my view, it is a renowned DIPLOMA MILL which sells Certificates worldwide. Being a student of ICMAB (Bangladesh) and thought to be a member of CIMA by means of Accelerated Route offered by it (CIMA).


Recent decision of CIMA to exempt few Bangladeshi University MBAs from 11 subjects made ICMAB members and these University's MBA holders equivalent. That means, they will also get 11 subjects exemption as ICMAB qualified members.


My question to CIMA, did you really know and assess how much hardship and labour it require to pass a ICMA core subject? Where I can easily guarantee you a pass in any subject in these universities. I can guarantee you a MBA degree in these universities within 2 years but I can NOT guarantee you the CMA degree even within 5 years, being the same student.


I will request ICMAB honorable counselors to cancel MoU with this DIPLOMA MILL (CIMA) to remain with it's (ICMAB) heritage and dignity in Bangladesh. To refer the decision by CIMA please visit CIMA website.

What happens if Auditor Unable to Complete the Engagement?

If the auditor concludes that it is not possible to continue performing the audit as a result of a misstatement resulting from fraud or suspected fraud, the auditor should: 

(a) consider the professional and legal responsibilities applicable in the circumstances, including whether there is a requirement for the auditor to report to the person or persons who made the audit appointment or, in some cases, to regulatory authorities;
(b) consider the possibility of withdrawing from the engagement; and
(c) if the auditor withdraws:
(i) discuss with the appropriate level of management and those charged with governance, the auditor’s withdrawal from the engagement and the reasons for the withdrawal; and
(ii) consider whether there is a professional or legal requirement to report to the person or persons who made the audit appointment or, in some cases, to regulatory authorities, the auditor’s withdrawal from the engagement and the reasons for the withdrawal.
 

The auditor may encounter exceptional circumstances that bring into question the auditor’s ability to continue performing the audit, for example, in circumstances where:
(a) the entity does not take the remedial action regarding fraud that the auditor considers necessary in the circumstances, even when the fraud is not material to the financial statements;
(b) the auditor’s consideration of the risk of material misstatement resulting from fraud and the results of audit tests indicate a significant risk of material and pervasive fraud; or
(c) the auditor has significant concern about the competence or integrity of management or those charged with governance.
 

 Because of the variety of the circumstances that may arise, it is not possible to describe definitively when withdrawal from an engagement is appropriate. Factors that affect the auditor’s conclusion include the implications of the involvement of a member of management or of those charged with governance (which may affect the reliability of management representations) and the effects on the auditor of continuing association with the entity.
 

The auditor has professional and legal responsibilities in such circumstances and these responsibilities may vary in different circumstances. For example, the auditor may be entitled to, or required to, make a statement or report to the person or persons who made the audit appointment or, in some cases, to regulatory authorities. Given the exceptional nature of the circumstances and the need to consider the legal requirements, the auditor considers seeking legal advice when deciding whether to withdraw from an engagement and in determining an appropriate course of action.

Procedures in case of a Possible Misstatement

When the auditor encounters circumstances that may indicate that there is a material misstatement in the financial statements resulting from fraud or error, the auditor should perform procedures to determine whether the financial statements are materially misstated. During the course of the audit, the auditor may encounter circumstances that indicate that the financial statements may contain a material misstatement resulting from fraud or error.

When the auditor encounters such circumstances, the nature, timing and extent of the procedures to be performed depends on the auditor’s judgment as to the type of fraud or error indicated, the likelihood of its occurrence, and the likelihood that a particular type of fraud or error could have a material effect on the financial statements. Ordinarily, the auditor is able to perform sufficient procedures to confirm or dispel a suspicion that the financial statements are materially misstated resulting from fraud or error. If not, the auditor considers the effect on the auditor’s report.

The auditor cannot assume that an instance of fraud or error is an isolated occurrence and therefore, before the conclusion of the audit, the auditor considers whether the assessment of the components of audit risk made during the planning of the audit may need to be revised and whether the nature, timing and extent of the auditor’s other procedures may need to be reconsidered.

For example, the auditor would consider:
♦ The nature, timing and extent of substantive procedures.
♦ The assessment of the effectiveness of internal controls if control risk was assessed below high.
♦ The assignment of audit team members that may be appropriate in the circumstances.

Persons responsible for detecting fraud and error

Responsibility of Those Charged With Governance and of Management

The primary responsibility for the prevention and detection of fraud and error rests with both those charged with the governance and the management of an entity. The respective responsibilities of those charged with governance and management may vary from entity to entity. Management, with the oversight of those charged with governance, needs to set the proper tone, create and maintain a culture of honesty and high ethics, and establish appropriate controls to prevent and detect fraud and error within the entity.

It is the responsibility of those charged with governance of an entity to ensure, through oversight of management, the integrity of an entity’s accounting and financial reporting systems and that appropriate controls are in place, including those for monitoring risk, financial control and compliance with the laws and regulations.

It is the responsibility of the management of an entity to establish a control environment and maintain policies and procedures to assist in achieving the objective of ensuring, as far as possible, the orderly and efficient conduct of the entity’s business. This responsibility includes implementing and ensuring the continued operation of accounting and internal control systems, which are designed to prevent and detect fraud and error. Such systems reduce but do not eliminate the risk of misstatements, whether caused by fraud or error. Accordingly, management assumes responsibility for any remaining risk.

Types of Errors in Accounts

Concealed  and  Unconcealed  Errors: As a general rule, mistakes are unconcealed but frauds are deliberately concealed. This proposition does not need any elaboration; but exceptions are in both cases. Mistakes become concealed if compensated by another or more mistakes in the opposite direction; or it may even be greatly minimized by that chance happening. For example, by mistake one or more accounts were short debited by an aggregate figure of Rs. 30,000 and this short debit is compensated by chance error or

say short casting or one or more credit accounts to the tune of say Rs. 30,200 the dimension of the error would apparently be Rs. 200 by which the trial balance would be thrown out of agreement and there may be a temptation to think, “the error is small, let us ignore it”. This attitude towards apparently small errors is dangerous because its true dimensions remain concealed and that may render the statements of account totally unacceptable. Mistakes may as well be concealed for wrong arithmetical calculations or for a faulty process of verification. Depreciation and stocks are examples which immediately come to one’s mind. Wrong calculation of depreciation or omission to include certain stocks in the inventory or wrong valuation of stocks are not apparent. Petty cash defalcation is often unconcealed because petty cash is an item which on many occasions is left out of checking.

Procedural  Errors: Sometimes we become so obsessed with the general ledger and its supporting records that we neglect other important features of the accounting system. An accounting system includes both records and procedure. Errors can appear in either or both. Whatever errors occur in the implementation of the procedures may be termed as procedural errors (which include frauds also). For example, the sales procedure of a company may include the following steps:

(a) Receipt of an order through salesman.

(b) Review of order by the credit department to determine whether the customer should be given credit as requested.

(c) Clearance with inventory department to be sure that the order can be executed.

(d) Preparation of forwarding note with copies to obtain the customer’s acknowledgement of the receipt of goods.

(e) Preparation of invoice and dispatch of the same to the customer.

If the procedure requires that these steps should be taken in the order indicated and if, for any reason, the second step is omitted, or is not completed before subsequent steps have been taken an error in procedure has been made and this may lead the company into financial loss caused by non-recovery of the money. Procedures are established to maintain control over resources and over transactions; any failure to follow the

established procedures lessens the control and may permit errors which do affect ledger accounts. Any breakdown in established procedures thus suggests not only the presence of a procedure type error but also of other consequences.

Other errors of this type include the approving of transactions of documents by some one other than the person authorized to do so, failure to ensure that all preceding steps have been taken before approving a document and substitution of one person by another in a procedural function without proper authority. It is the normal procedure that goods, when received should be inspected for quality by the inspection department staff. If the storekeeper carried out this function it is indeed risky. Similarly, if the procedure requires that the timber go-down should have been given periodical insecticide treatment and management has ignored that, a great loss may be caused to the timber by white ants.

What is needed to be emphasized here is this that a procedural error, which is neither a defalcation nor misappropriation, may involve the company in a sizable loss. This type of error or fraud cannot be located by any rigorous examination of the books of account. All these errors discussed above may be grouped in the following categories in terms of their accounting incidence :

(i) Errors of omission - where a transaction has been omitted either wholly or partially.

(ii) Errors of commission - where a transaction has been mis-recorded either wholly or partially.

(iii) Compensating errors - where there are two or more errors which exactly counter balance each other, so that the trial balance agrees in spite of them.

(iv) Errors of principle - these are errors arising as a result of transactions having been recorded in a fundamentally incorrect manner; for example, a distinction not being made between capital and revenue income or expenditure.

(v) Procedural errors.