PAPER IE01: PRINCIPLES OF ACCOUNTING

Lecture Sheet – 02

(Class 3-4)

Learning outcomes
Indicative syllabus content
On completion of their studies students should be able to:
Lead Component Level
3. Explain the (a) explain the background to the formation of ICMAB 2 • Background, scope and
accounting profession. and ICAB; functions of ICMAB.
(b) Explain the role of ICMAB in developing the practice 2 • Background, scope and
of management accounting. functions of ICAB.
(c) Explain the role of ICAB in developing the practice 2
of financial accounting and reporting.

Order under which ICAB established:

The Institute of Chartered Accountants of Bangladesh (ICAB) is the National Professional
Accounting Body in Bangladesh, established under the Bangladesh Chartered Accountants
Order, 1973 (President's Order No. 2 of 1973) for the purpose of regulating the profession of
accountants and for matters connected therewith.

Administrative Ministry:
The Ministry of Commerce, Government of the People's Republic of Bangladesh is the
Administrative Ministry of The Institute of Chartered Accountants of Bangladesh (ICAB).

Vision:
ICAB members hold a widely respected professional accounting qualification which supports
enterprise, corporate governance and sustainable growth in the business environment.

Mission:
• To promote and regulate high quality financial reporting and auditing in Bangladesh
• To develop and maintain the competence of professional accountants and
• To enhance the reputation of the accounting profession in all sectors of the economy

Values:
• Integrity To uphold the highest professional integrity and ethical standards
• Expertise To conduct professional responsibilities with a high level of knowledge,
competency and skill.
• Transparency To conduct activities in a clear and transparent way.
• Accountability ICAB members to be responsible for their actions.

Strategic Goals:
• Increase number of members, students and financial strength
• Align with members' careers
• Enhance ICAB's image within the country and internationally
• Further enhance the reputation for professionalism and high standards of integrity.
• Ensure compliance with requirements of IFAC (International Federation of Accountants)
membership.

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PAPER IE01: PRINCIPLES OF ACCOUNTING

Roles of the ICAB: The Institute of Chartered Accountants of Bangladesh (ICAB), the National
Professional Accounting Body of Bangladesh established under the Bangladesh
Chartered Accountants Order 1973 (President's Order No. 2 of 1973). The Institute has the
following the roles:
1. Regulates the accounting Profession and matters concerned there within the country
2. Administers its members and students
3. Ensures sound professional ethics and code of conduct by its members
4. Provides specialized training and professional expertise in Accounting, Auditing, Taxation,
Corporate Laws, Management Consultancy, Information Technology and related subjects
5. Imparts Mandatory continuing Professional Education (CPE) to its members
6. Fosters acceptance and observance of International Accounting Standards (IAS)
and International Standards on Auditing (ISA) and adopt IAS &ISA in Bangladesh as
Bangladesh Accounting Standards (BAS) and Bangladesh Standards
on Auditing (BSA) respectively 7. Keeps abreast of latest developments in Accounting
techniques, Audit methodology, Information technology, Management consultancy and
related fields
8. The role of finance and account in will be able to identify the purpose of financial
information produced by businesses and specify how accounting and finance functions
support businessoperations, including the management of working capital.

Legacy of the ICMAB

The Institute has a long heritage of rendering professional services to the nation. The journey of
the glorious Profession of Cost and Management Accounting began in the pre-independent
Bangladesh with the founding of a branch of The Pakistan Institute of Industrial Accountants
(PIIA) in 1958. As we started a fresh journey towards success and prosperity in independent
Bangladesh, the profession entered into a new era. In 1972, the Institute was re-established in
the name of Bangladesh Institute of Industrial Accountants (BIIA). Thereafter, the members of
the Institute through their excellence in various fields proved their credibility in the national and
international outfit which started building the credentials for the Institute for gaining acceptability
from all concerned and to attain confidence of the government and business community of the
country. With the changing need of time the Government of Bangladesh renamed it as The
Institute of Cost and Management Accountants of Bangladesh (ICMAB) through promulgation of
The Cost and Management Accountants Ordinance 1977 (Ordinance No. LIII of 1977), which
was published in the official Gazette on 14 November 1977. Considering the active role of Cost
and Management Accountants for accelerated growth of Bangladesh economy, a new Act of
Parliament “Cost and Management Accountants Act 2018” ( Act No. LXX of 2018) has been
passed by the Parliament on 29th October 2019 and published in the official Gazette on 14
November Now in 2019, after a 48-year arduous journey, the chronicle of success earned by
our predecessors has brought us to the place where we stand today.

Legal Status
ICMAB is a statutory organization constituted by the Government under The Cost and
Management Accountants Ordinance 1977 (Ordinance No Llll of 1977) and regulated under the
Cost and Management Accountants Regulations 1980 (as amended up to date). Thereafter The
Cost and Management Accountants Ordinance 1977 has been replaced by the Cost and
Management Accountants Act 2018 (Act No. LXX of 2018), published in the official Gazette on
14 November 2018. It is a member of leading regional and global accounting bodies including
International Federation of Accountants (IFAC).

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PAPER IE01: PRINCIPLES OF ACCOUNTING

Administrative Ministry
The Ministry of Commerce, Government of the People’s Republic of Bangladesh is the
Administrative Ministry of The Institute of Cost and Management Accountants of Bangladesh
(ICMAB).

Vision:
Institute’s vision is to help Bangladesh become an industrialized nation by promoting and
regulating Cost and Management Accounting profession to enhance economic competitiveness
and quality of life.

Mission:
Institute’s mission is to develop, equip and promote Cost and Management Accounting
profession by maintaining highest professional standard of its members in order to enable them
to provide better services to the society.

The Institute is entrusted with the formulation and implementation of National Accounting as well
as Cost Accounting Standards and take other necessary steps with a view to regulating the
Cost and Management Accounting profession commensurate with global standard with the
ultimate objective of developing Bangladesh’s human and natural resources to ensure common
welfare and to enrich our shared future.

Roles of the ICMAB: The Institute of Cost and Management Accountants of Bangladesh
(ICMAB) is the national body of the professional Cost and Management Accountants of
Bangladesh. Established with the prime objective of promoting and regulating the Cost and
Management Accounting profession in the country, the Institute offers education and training to
the students interested to pursue career in this field and provides highly recognized CMA
degree on fulfillment of requisite qualification. The Institute undertakes research in relevant
fields and is the sole authority to issue practicing license to its members.

The major roles of the ICMAB:

• Regulate and develop the Cost and Management Accounting (CMA) profession in
Bangladesh.
• Provide and confer the highest professional degree in Cost and Management Accounting.
• Impart education and training to the members, corporate managers and intending students
of CMA for enhancing their capability in the fields of Cost and Management Accounting
• Develop knowledge, skills and competence of the CMAs needed to support economic
development of the country and, thus, to prepare capable manpower needed for various
national and international development activities
according to the requirements of the business.
• Formulate, adopt and implement Cost Accounting and Auditing Standards (CAAS) in
Bangladesh and international arena.
• Imparts Mandatory Continuing Professional Development (CPD) to its members
• Regulates the accounting Profession and matters concerned there within the country
• Administers its members and students
• Ensures sound professional ethics and code of conduct by its members
• Regulate cost auditing in Bangladesh
• To help Bangladesh become an industrialized nation by promoting and regulating Cost and
Management Accounting profession to enhance economic competitiveness & quality of life.
• To developing Bangladesh's human and natural resources ensure common welfare.

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PAPER IE01: PRINCIPLES OF ACCOUNTING

The CIMA code of ethics is made up of five fundamental principles: integrity, objectivity,
confidentiality, professional competence and due care and professional behavior:
Integrity: being straightforward, honest and truthful in all professional and business
relationships. You should not be associated with any information that you believe contains a
materially false or misleading statement, or which is misleading by omission.

Objectivity: not allowing bias, conflict of interest or the influence of other people to override
your professional judgment.

Professional competence and due care: an ongoing commitment to your level of professional
knowledge and skill. Base this on current developments in practice, legislation and
techniques. Those working under your authority must also have the appropriate training and
supervision.

Confidentiality: You should not disclose professional information unless you have specific
permission or a legal or professional duty to do so.

Professional behavior: comply with relevant laws and regulations. You must also avoid any
action that could negatively affect the reputation of the profession.

ICMAB code of ethics

In order to achieving the objectives of the accountancy profession, Cost and Management
Accountants have to observe fundamental principles, which are:

(a) Integrity: A cost and management accountant should be straightforward and honest in
performing his services.

(b) Objectivity: A cost and management accountant should be fair and should not allow
prejudice or bias or the influence of others to override objectivity.

(c) Competence: A cost and management accountant must refrain from performing any service
which he is not competent to carry out unless proper advice and assistance is obtained to
ensure that the service is performed to the satisfaction.

(d) Confidentiality: A cost and management accountant must not disclose information acquired
during the course of his engagement and should not use or disclose any such information
without proper and specific authority or unless there is a legal or professional right or duty to
disclose.

(e) Professional Behavior: A cost and management accountant should act in a manner
consistent with the good reputation of the profession.

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