Escolar Documentos
Profissional Documentos
Cultura Documentos
Broad Objective
The objective of this study is to determine the recording process, compliance and internal
control.
Specific Objectives
The specific objectives of the study are to
To get an introduction about the organizational structure & how co-ordination among
different set of activities is made.
Primary sources
Practical deskwork
Direct observations
Secondary sources
Audit Report
Website
The duration that is for internship is not enough to learn about a big organization like
Incepta Pharmaceuticals Limited.
For non-availability of secondary data and for time limitation it was not possible to
work on the basis of board data.
Due to restriction of time, I could not get detailed information about every
Departments of IPL.
Lack of confidential information about the organization makes many mistake and
targeted aim.
It was very different to collect the information from various personnel for the job
constrain.
Incepta policy was not disclosing some data and information for obvious reasons.
Lack of experiences has acted as constraints in the way of meticulous exploration on
the topic.
Internet speed is very slow (outside) for collecting necessary data in time.
CHAPTER TWO
AN OVERVIEW OF INCEPTA
PHARMACEUTICAL LIMITED
2.1 History of Incepta Pharmaceutical Limited (IPL)
Incepta Pharmaceuticals Ltd. is a leading pharmaceutical company in Bangladesh
established in the year 1999. The company has a very big manufacturing facility located at
Savar, 35 kilometer away from the center of the capital city Dhaka. The company produces
various types of dosage forms which include tablets, capsules, oral liquids, ampoules, dry
powder vials; powder for suspension, nasal sprays etc. Since its inception, Incepta has been
launching new and innovative products in order to fulfill unmet demand of the medical
community. The focus was to bring more new technologically advanced molecules to this
country.
The company specializes in value added high technology dosage form like sustained release
tablets, quick mouth dissolving tablets, barrier coated delayed release tablets etc. It has
established a modern research and development laboratory for the development of new
advanced dosage forms for various drugs and devices like poorly soluble drugs, dry powder
inhalers, coated pellets, modified release products, taste masked preparation etc.
Incepta quickly developed a very competent sales team, which promotes the specialties
throughout the country. The company virtually covers every single corner of the rural as
well as urban area of Bangladesh. It has its own large distribution network having 13 depots
all over the country. The company has a clear vision to become a leading research based
dosage form manufacturing company with global presence within a short period of time.
The Research and Development department for various dosage forms has been very well
developed. Incepta intends to bring newer products of advanced technology through
research hitherto unknown in this country. Such activities will not only benefit the company
but also the total pharmaceutical sector of the country. In the post 2005 era, the company
also intends to embark into the production of Active Pharmaceutical Ingredient (API). Plans
are underway to get into reverse engineering and analogue research in order to produce new
API.
The company is now expanding its activities beyond the geographical boundary of
Bangladesh. The products are of high standard and therefore these will be exported to both
developed and developing countries. The company is open to collaborate with interested
parties in various countries. The future is wide open and the opportunities
Incepta will continue to strive to provide high quality medicine at affordable prices to the
people here in Bangladesh and other parts of the globe.
Square
(Total 100%)
19.48%
Incepta
8.24%
Beximco
7.72%
Acme Laboratories
4.81%
4.76%
Eskayef
4.59%
Reneta Pharma
4.54%
ACI
4.48%
Aristopharma
4.07%
Drug Int.
3.00%
Others
33.43%
Incepta was ranked the 2th largest company of the country with the highest growth rate
among the top Ten.
Highlight of the fastest growing Pharmaceuticals sectors in Bangladesh.
Mission
Provide people globally with high quality health care products at affordable prices in order
to improve access to medicine and to improve employees an enabling environment that
facilities realization of their full potential.
Table 2:
December 16, 1998, the construction of the factory began.
1998/99
2000
2001
By the end of 2000 Incepta become the number 31st company of the
country.
A total of 18 new generics with 37 presentations were launched this
year. 11 of these generics were first ever in Bangladesh.
By end of the year incepta was ranked the 12 th company of the
country.
A total of 32 new generics with 49 presentations were launched. 14 of
these generics were first ever in Bangladesh. New office for the sales
and distribution operation was also taking shape.
2002
By the end of the year Incepta was ranked the 10 th company of the
country.
2003
2004
2005
2006
2007
2008
2009
2010
Corporate Headquarters
Year of establishment
24/02/1999
Assistant General
Commercial Production
Manager April-1999
Status
Private Company Limited.
Senior
Manager Manufacturing Company.
Type of business
Pharmaceuticals
Number of employees
3500
Manager
Deputy Manager
Assistant Manager
Executive Officer
Officer
Assistant Officer
Administration
Human Resources
Finance & Accounts
Financial System
Management Information System
Planning & Commercial
Legal Affairs
Marketing Strategy
Sales Secretariat
Sales Service Research
Factory
Financial
Accountin
g
Trusty
Treasury
Accounts &
Finance
Departmen
t
Legal
Affairs
Costing, Budgeting,
Controlling &
Industrial operation
Fund Management
Maintaining banking transaction, loan, and leases
Party payments & receipts
Employee payroll. etc.
13
Budgeting
Costing
Cost control
Internal Reporting
Factory inspection. etc
2.9.1 Teamwork
We know that to be a successful company we must work together, frequently transcending
organizational and geographical boundaries to meet the changing needs of our customers.
2.9.2 Performance
We strive for continuous improvement in our performance, measuring results carefully, and
14
2.9.3 Community
We aim to become nations most admirable business enterprise through our honest and
intelligent approach to everything that we do. We strive to support the community where we
live and to also support our nation as far as possible at the time of its need. We truly believe
that we can only survive and grow if our nation remains healthy.
As it commitment to society the company donates medicine to the government Relief Fund
during natural disaster. Incepta also provides financial assistance for expensive treatment
including heart and cancer and disburses its corporate zakat for relief of distressed people
every year.
Incepta also products life saving import-substitute medicines at affordable price for the
people of Bangladesh as an expression of a true love and compassion for the people. All
these activities are evidence of socially responsible and carrying company.
CHAPTER THREE
PROJECT PART LITERATURE
REVIEW
3.1Concepts of Accounts Payable
Accounts payable are unpaid obligations for goods and services received in the ordinary
course of business. It is classified as a current liability account and as such normally has a
credit balance. It is classified as a Current Liability because the obligation is generally due
within 12 months from the initial transaction date.
This kind of liability usually arises from a purchase of merchandise, materials, or supplies.
The accounts normally do not include accrued salaries payable, accrued interest payable, or
rent payable. This list is kept in the ordinary course of the debtor's business. Aside from
materials and supplies from outside vendors, accounts payable might include such expenses
as taxes, insurance, rent (or mortgage) payments, utilities, and loan payments and interest.
16
It is sometimes difficult to distinguish between accounts payable and accrued liabilities, but
it is useful to define a liability as account payable if the total amount of the obligation is
known and owed at the balance sheet date. Even as it is a debt owed by a business that arises
in the normal course of its dealings, that has not been replaced by a note from another
debtor, and that is not necessarily due or past due.
According to Britannica concise encyclopedia1, Accounts payable is any amount owed as
the result of a purchase of goods or services on a credit basis. Although a firm making a
purchase issues no written promise of payment, it enters the amount owed as a current
liability in its accounts. Companies often incur this type of short-term debt in order to
finance their inventories, especially in industries where inventory turnover is rapid.
Wikipedia2 describes accounts payable as one of a series of accounting transactions
covering payments to suppliers owed money for goods and services. The average household
performs this task by writing cheques each month to such suppliers as the electric company,
telephone company, cable television or satellite dish service, newspaper subscription, and
other such regular services.
3.2 Recording
Inventory Process of
Shipping Notice
Receive
Goods
Accounts
or
Payable
Services
Control
Accounts payable is a part of acquisition and payment cycle. The cycle begins with a request
for goods or services and ends with the payment to the vendor. Figure is a data flow diagram
Materials
of the acquisition
and payment cycle.
Requisition
Form
Receiving
Report
Purchase
Requisition
Acknowledgemeant
Purchas
e Goods
or
Services
Purchase
Order
Vendor
Notice of Receipt
1
2
http://britannica.com
http://en.wikipedia.org/wiki/Accountspayable
Maintai
n
Account
s
Payable
17
Accounts
Payable Master
File
Payment
Cash Requirement
Forecast
Management
Purchase Analysis
Casher, Jonathan D.; How to find and Eliminate Erroneous Payments; APA's Employer Practices;
winter 2000.
Arens Alvin A and Loebbecke James K.;Auditing- An Integrated Approach ; Prentice Hall International;
Eighth Edition; 2000.
18
Accounts
Business
Function
Inventory
Services
Property, plant,
equipment
Prepaid expenses
Leasehold
improvements
Accounts payable
Manufacturing
expenses
Selling expenses
Processing
purchase order
19
Administrative
expenses
Receiving goods
and services
Recognizing the
liability
Cash
Disbursement
Accounts payable
Purchase discounts
Processing &
Recording cash
disbursement
Receiving report
Acquisitions journal
Summary acquisitions
report
Vendors invoice
Debit memo
Voucher
Accounts payable master
file
Accounts payable trial
balance
Vendors statement
Cash disbursements journal
Check
If an organization follows some method it could improve its accounts payable procedure.
According to Chris Anderson4 there are nine methods to design accounts payable and
accounting procedures
1. Eliminate Paper
The single biggest cost for any purchasing and payables department is paper, including:
purchase orders, purchase order follow-up, small-dollar purchases, delivery tracking &
receipts, and vendor payments. Utilizing paperless invoices, Web-based supplier selfservicing, centralized vendor files, automated workflows for electronic or imaged invoices
(see ERP below), and payment methods, such as business credit cards, Electronic Data
Interchange (EDI) and Electronic Funds Transfer (EFT), can reduce by paper handling costs
by as much as 90%.
into an 18% return on your capital, and for many organizations this is a good return
on your investment.
5. Review Purchases
4
http://www.bizmanualz.com?src=ART81
21
7. Eliminate Disputes
Disputes with your suppliers are typically the result of a problem with your
purchasing/receiving process. When disputes occur, review your purchasing procedures to
ensure that they are producing the correct metrics and that you are not forced to pay for your
mistakes.
22
ensuring, as far as practicable, the orderly and efficient conduct of its business, including
adherence to management policies, the safeguarding of assets, the prevention and detection
of fraud and error, the accuracy and completeness of the accounting records, and the timely
preparation of reliable financial information. The internal control system extends beyond
those matters which relate directly to the functions of the accounting system and comprises
The control environment means the overall attitude, awareness and actions of directors and
management regarding the internal control system and its importance in the entity. Factors
reflected in the control environment include:
which helps ensure the accomplishment of those goals and objectives. He or she is
responsible for the sound financial condition of the unit, protection of the university's assets
including its human resources, and compliance with federal, state, and University rules,
regulations, and procedures. He or she must ensure that the funds entrusted to the unit are
used appropriately.
The administrator may delegate some of the related duties but cannot delegate
accountability.
Risk Assessment
Administrators should identify and analyze the relevant risks to the achievement of unit
goals and objectives. He or she should determine what can go wrong, what areas have the
most risk, what assets are at risk, and who is in a position of risk. Risks may include:
Public scandal
Revenues not received or if received, not recorded properly
24
Control Activities
Control activities are those activities that provide a "reasonable" level of assurance that the
unit's goals and objectives will be accomplished. Absolute assurance is not possible due to
costs, collusion, human error, and management's ability to override controls. Control
activities include
The purpose of the information and communication system is to help ensure that employees
are aware of the unit's goals and objectives, how they are to be accomplished, and who is
responsible for the specific tasks to accomplish them. The information and communication
system must also provide administrators with reports containing operational, financial, and
compliance information to monitor progress toward accomplishing established goals and
objectives and to allow administrators to make appropriate decisions. Information and
communication systems include:
Monitoring
Monitoring ensures that the internal control system is operating as expected. It should be
performed by supervisory personnel and focused on high-risk areas Monitoring activities
include:
Assess planned
control
riskFigure 4: Methodology for Designing
Tests
of Controls
and Substantive
acquisitions and cash
Tests of Transactions for the Acquisition and Payment Cycle
disbursements
Audit procedure
Sample size
Items to select
Timing
Internal control can be understood by studying the clients flowcharts, preparing internal
control questionnaires and performing walk through tests for acquisitions and cash
disbursements. There are some key internal controls for all business functions mentioned
earlier in this chapter. These key controls should be examined carefully. After identifying the
weaknesses and assessed control risk, auditor will decide whether substantive tests will be
reduced sufficiently
CHAPTER FOURE
ACCOUNTS PAYABLE
&
RECORDING PROCESS OF IPL
As discussed earlier, accounts payable is a part of acquisition and payment cycle. The
acquisition and payment cycle of Incepta Pharmaceuticals (IPL) begins with a request for
goods or services from various departments and ends with the payment to the vendor by
issuing checks. In some cases the procedure includes budgeting and prior approval of
superior before requesting to the authority.
For the convenience of discussion I have divided this chapter in to four parts. The first part
is about the accounts and classes of transactions in the acquisition and payment cycle of IPL.
The second part is about related document and records kept by IPL. Third part talks about
the procedure of acquisition and payment with related business functions. And in the last
part I have talked about their accounting software in which they maintain a separate module
for accounts payable.
The acquisition and payment cycle of IPL consists of the procedure regarding procurement
activities in order to continue the day to day business and production process. It helps them
to minimize their cost of acquisition as well as control the quality. The cycle includes three
classes of transactions;
These transactions generate different types of accounts. Those accounts are shown in figure
(below). If we note the figure carefully, we can see that each account is affected by accounts
payable. All these accounts are either debited or credited against accounts payable. For
example, acquisitions are debited against accounts payable and cash disbursement is
credited against it.
Material
Property, plant
and equipment
All type of
services
Accounts
Payable
Acquisition
of
Purchase
Account Payable document of IPL returns
Cash
disbursements
Manufacturing
expenses
Repair and
maintenance
Taxes
Supplies
Freight in
Utilities
Insurance
Purchase
Prepaid
Printing
discounts Module
expenses
4.2
Recording and Reporting
of Accounts Payable
Travel expense
System
Supplies
Delivery expense
Officers travel
Repairs
IPL
maintains
a
number
of
documents
and
reports
for
its
own
convenient.
Selling
Administrative
Legal fees It designed its
Advertising
documents
and reports in such
a way that they
can be used inAudit
multiple
expenses
Expenses
fees purposes. The
Promotional
documents
are generated from using
Expenses are mainly prepared in manual system. But the reports Taxes
accounting software. The name of the software is MAPICS which means Manufacturing
6
Here goods refers to inventoriable items like raw material and packing material.
Refers toSubsidiary
tangible fixed assets used by
BPL.
Control
Control
Subsidiary
8
Service refers to all type of short term and long term services like cleaning, plantation, nursery, gardening,
Ledger
Ledger
Ledger
Ledger
postal, software etc.
7
28
Accounting Production Information Control System. The documents and reports maintained
by IPL from acquisition to payment procedure are;
Documents
1.
2.
3.
4.
5.
Purchase requisition
Purchase order
Material receiving report (MRR) / Goods receiving report (GRR)
Invoice / Bill
Quality Assurance (QA) Report
1. Purchase Requisition
Its a requisition generate by respective department. Data elements conveyed by a purchase
requisition of IPL include unique number of purchase requisition, CEP and purchase order
number with date name and description of material and service, unit number, required
quantity, unit price and quantity ordered. It also includes signature and approval of
authorized person, suppliers name; mode of payment, advance payment (if any), terms and
conditions, MRR number, invoice number etc.
If the requisition is for fixed asset then a CEP (Capital Expenditure Proposal) is raised by the
user department. In this case, proposed suppliers name, estimated budget, justification for
proposed expenditure and estimated life of proposed expenditure is also required. A sample
of CEP is given in the Annexure A (Figure 8)
2. Purchase Order
Its a document through which an order is made. The heading contains the purchase order
number, purchase requisition number and date. The body contains the description of
required item, quantity required and ordered, amount with unit price, suppliers name and
address, terms and condition of order, due date, other relevant dates etc. Besides, it also
29
describes the mode of purchase, advance payment (if any), purchase reference and other
relevant information. A sample of purchase order is added with Annexure A (Figure 9)
5. Invoice / Bill
This document is generated by supplier/ service provider that mention the quantity and
amount, bill number with date etc. The bill is attached with MUSOK 11, delivery challan
etc.
calculation is made according to section 51(A), 52 of ITO- 19849, rule 16 of ITR-198410, and
the VAT Act-1991 (Musok 11). The reports contain vendor number, vendor name, and
period, total amount due, tax amount, amount excluding tax amount, VAT amount and
amount excluding VAT. A sample of tax and VAT report is added with Annexure (Figure
11)
10
31
5. Processing
recording
Tenderand
/ Quotation
callcash disbursement
Issuing order
By Purchase Department
or by User Department
Payment procedure is
complied with sec
Figure
Acquisitions
51(A),652
of income tax
ordinance-1984 and rule
16 of income tax
Rule1984 and Musok 11
of VAT Act 1991
by the user department. If the departmental head or higher authorities, whichever is required,
approve the proposed budget a purchase requisition is sent to purchase department. And in
case of raw or packing materials, the planning department determines the quantity and
timing of raw materials. This department informs the purchase department when to buy
materials.
When the purchase department got the requisition, it calls for quotation11 or tender12. After
receiving the quotation or tender, supplier has been selected. The supplier may be local or
international. If the terms and conditions are in favor of both IPL and the selected supplier,
an order for the purchase is than issued by the purchase department. In case of raw or
packing material, the purchase order is issued by the factory. A purchase register is
maintained by the purchase department in which they maintain all the required information
relating to a consignment.
QAD inspects standardized items like raw material, packing material etc.
User department inspects non standardized items like services, stationeries etc.
Inspection department inspects machineries, plants etc.
Again at IPL there are some authorized departments for inspection. For example, computer
Packing
Accept
or IT related products are inspected
by IT department,
furniture are byPurchasing
HR department.
order
Slip
Vendor
Delivery by
User
department/
Factory
Packing
slip
by Purchase/
Planning Dept
Goods &
services
Count &
Inspect
MRR/ GRR
Vendor
goods by
respective
departments
11
Quotation is an indication of the price at which a seller might be willing to offer goods for sale.
12
Tender is a means of selecting supplier. The lowest bidder with required quality is selected.
34
MRR/GRR
Goods &
services
Warehouse/ Factory/
Ready for Use
Report on purchase
Vendor account balance
Vendor ledger
Journal register
Tax report
VAT report
35
Purchase order
department
MRR/GRR
Vendor
invoice
Approve
vendor
invoices by
purchase
department
Bill/ Invoice
Purchase Order
MRR/ GRR
VAT (MUSOK 11)
Pay Vendor
(cash
36
disbursements
A/P Payment
Voucher
A/P Provision
Voucher
Checks
Accounts
Payable Module
A. File
Maintenance
B. Transaction
Processing
D. Inquiry
E. Year End
C. Reports
Maintain vendor
master
Journal Register
Reports on Purchase
Vendor Ledger
Both
Vendor Ledger
Maintain item code
Vendor Account
Balance
List item code
In MAPICS IPL maintains a separate accounts payable module for its own convenient.
Through this module related transactions
records
and reports mentioned earlier are kept.
Journal
Register
Only theMaintain
authorized personnel of IPL are allowed to use this module. The use of the module
implementation
data
is controlled
by user password.
Cash Requirement
Report
Following items are the part of AP module;
Payable
Figure 9: Accounts PayableAged
Module
Tax Report
Vat Report
Vendor37
Business
Position
Create Web Page
CHAPTER FIVE
ACCOUNTS PAYABLE INTERNAL
CONTROL SYSTEMS OF IPL
38
In the literature review section, methodology for designing tests of controls and substantive
tests of transactions has been described. In this section I am going to draw a picture of
internal control system of Incepta Pharmaceuticals Ltd. relating to accounts payable. But
before starting I want to confess that I have some inherent limitations. Internal control
system is very sensitive issue for any organization and I was only an intern at BPL for three
months. So it was not possible for me to do all the theoretical works. The picture that I have
drawn in the following sections is prepared on basis of interviews with Incepta personnel,
internal control questionnaires and my personal observations and assumptions.
Table 4:
Cross examined assets
Computer & Other IT related assets
Office Equipments or Furniture & fixture
Manufacturing Equipments
Raw and Packing materials
So possibility of orders for unneeded goods or more goods than need has been checked by
this cross sectional verification.
To the extent possible, employee duties in this area are to be complementary to or checked
by another employee. Disbursements are to be made by and counter signatures provide an
additional control. Blank checks are to be kept in locked storage under the control of a
designated, responsible employee.
A separate record is maintained for each check series issued or voided. The record for
voided warrants is to include the date voided, inclusive serial numbers, quantity voided,
reason for voiding, and initials of individual taking action.
The bank checks of IPL are pre-numbered. They are completely filled out before being
presented for signature. Someone maintains physical control of checks other than persons
originating disbursement requests. Normally dual signatures are required on all checks.
Bills or vouchers are presented with checks for signature and are marked "Paid only at the
time checks are signed. The same person mails and prepares checks someone approves bills
for payment other than the persons who sign checks. Bank statements are reconciled at least
monthly by an employee not involved in cash receipt or disbursement procedures.
There should be a specified limit. If the ordered amount cross that limit approval of
Board of Directors is required
No purchase order would initiate without purchase requisition
Purchase order should be in written form because its a legal document to buy
The purchase department should not be responsible for authorizing the acquisition or
receiving the goods.
All purchase order should be pre-numbered and have enough space to minimize
unintentional omissions
The receiving department should initiate the receiving report and the inspection
report.
42
Both documents should be prepared in multiple set. Among them one set should be
kept by the receiving department and others should be sent to accounts department
and store room.
Goods should be physically controlled from the time of their receipt to disposal. This
will help to prevent theft and misuse.
The personnel in the receiving department should be independent of the storeroom
personnel and the accounting department.
The accounting records should transfer responsibility for the goods as they are
transferred from receiving department to storage and from storage to manufacturing.
The department should compare the details on the purchase order, receiving report
and the vendors invoice
Extensions, footings, and account distributions should be verified.
Personnel who record acquisitions do not have access to cash, marketable securities,
and other assets.
Adequate documents and records should be kept
Vat report
If the person is satisfied with those documents he will then give the provision voucher. This
person does not have the access to handle the cash, securities or other assets.
Authorization of Payments
Major Internal Control Issue
Its a very important control. This control includes
Checks should be signed by an individual with proper authority
The personnel signs the check and performs accounts payable function should be
separate
The check signer should carefully examine the supporting documents at the time of
signing the check
The checks should be pre-numbered and printed on special paper
CHAPTER SIX
FINDING
&
RECOMMENDATION
44
6.1 Findings
Recording process of Accounts Payable in IPL is the most modern in Bangladesh
Pharmaceuticals Business. The following Findings are made on the basis of the research for
further improvement of the organization.
Source of documents (which are provide from Purchase Department) are not timely
available to initiate the process of recording transaction and associated works.
Even when purchase department sends the documents timely. Some of these are
missing due to indecent file maintenance. A separate file is maintained in a slapdash
manner, especially without any sequence. Sometimes they are kept in other files. It
requires extra time for searching the right one as and when needed.
Purchase department do not verify all relevant information sincerely. For that reason
finance & accounts department respective person fall in many problem to complete
party bills and record. Its time consuming.
The existing IPL accounts payable software is looking pretty difficult and not enough
friendly for the user. Without trained person fall in difficult to operate it.
Some times documents are received in time but unrecorded and piled up for
processing in the future when some other documents will come.
Incepta provide very good job environment for their personnel. That is very
important for better business.
IPL need to provide priority (Job) for the BBA internees. Other wise may they cant
show their best performance in the work, and also IPL may loss someone they are
looking for.
45
The market share of the company is now around 4.67% with 42.47% annual
growth rate.
There is no financial liabilities of the company and the cash flow is steady and
stable
Over the last five years, the company has successfully launched numerous
products that provided the utmost demand of the customers as well as good
customer satisfaction.
The product quality of the company is better than any other company
The distribution network of the company covers every corner of the country.
The product promotion effort of the company is outstanding and beat the
company in that industry with a big margin.
The sales force of the company is one of the youngest, largest and most dedicated
to lead in the country.
The manufacturing facility of the company is one of the largest and most
advanced in the country.
Weaknesses
46
Although the company has plan for export but at the moment is too occupied in local
market development and recently started to explore market outside the country.
The employees of the company are relatively young and lack of experience,
especially in sales and distribution.
There are very few experts on reverse engineering analogue research and chemical
synthesis available in this country so company is hiring employees from abroad
giving high remuneration.
Opportunities
From 2000 onwards Bangladesh being a member of LDC country will be allowed to
produce cheap copies of patented drugs and their raw materials.
If the government extends necessary support to the industry, it has the potential to
become, a very big export sectors both API and formulation products to all the LDC
countries and off patented formulation products to developing and developing
countries.
As Indian and Chinese companies will not be able to produce patented active
ingredients but they have the necessary technology and expertise in reserve
47
engineering and chemical synthesis they will be more interested in cooperation with
Bangladesh after 2004
Threats
The present regulation does not allow local companies to advertise their OTC drugs
in the mass media whereas these are allowed in neighboring countries already
creating a market for those products. This situation is very likely to worsen in the
post 2010 scenario.
The drug act 1940 & the drug policy of 1982 need to be revised soon on order to
copy with the post 2004 scenario.
In the post 2010 scenario Bangladesh may end up not having the necessary raw
materials for its products .Incepta may also be forced to buy raw materials from the
innovator company at a much higher price leading to price hike and market
shrinkage.
The implementation of WTO, s TRIPS and public Health agreement is very likely to
result in the rise of production cost of medicine and their distribution which may
adversely affect Incepta and the local industry.
48
6.3 Recommendations
The following Recommendations are made on the basis of the research findings for further
improvement of the organization. To make my recommendations more authentic and
realistic I have used primary data. I communicate with the personnels where I was
completed my internship program, for taken their views and tried to make it more
appropriate & precise.
Recording Process
So far I understand the recording process of accounts payable is quite satisfactory as it uses
accounting software. But the software is using only by the accounts department. The
documents are recorded manually. So lots of paper works have to be done by IPL personnel.
Its very time consuming and may create errors in recording and filing. Again if any one
wants to know about any information relating to those documents he has to search for the
right files. Sometimes it is difficult to find out the exact file.
I think integrated software is a solution for this problem. If the same software will be used
by all departments it will be easy to find out required information. You have to press some
keys only for this job. But it is true that integrated software is a very complex one for a large
organization like IPL. To avoid this complexity it could use the same software in the
selected departments.
Internal Control
According to my view point, the controlling system of accounts payable of IPL is very
strong. Its recording process and disbursement procedure designed in such a way that the
account is controlled automatically. Because in all steps from purchase requisition to cash
disbursement all the documents are reviewed several times by different personnel of
different departments. So the chance of misstatement, theft or fraud is very low. IPL operates
its accounts payable according to their policy designed for recoding and reporting of that
account.
Incepta Pharmaceuticals Ltd is also the largest exporter of pharmaceuticals from
Bangladesh, spreading its presence in many developing and developed countries across the
globe.
In this report, I have tried my level best to identify the existing recording procedure of
accounts payable.. I think that IPL performs an excellent job in compliance with applicable
rules and regulations regarding accounts payable. Its recording and reporting process are
linked with each other in such a way its internal control system of accounts payable is very
much strong.
Incepta believes in creating the difference in the market place by offering impeccable
quality. I believe that the Accounts & Finance department is equipped with knowledgeable,
professional, skilled, experienced and dedicated staffs possess the power necessary to reach
the landmark of quality financial reporting
49
6.4 Conclusion
IPLs every employee computer knowledge is not same to operate their daily works.
So IPLs try to make their employee fit for their works, with the helps of proper
training.
To introduce IPL more attractively in front of the general people (bottom level), to
arrange some special program like- Travel Medicine Show, Free Treatment Festival,
Travel Camp Treatment, Free Treatment with Medicine and etc.
Social-welfares are a positive sight for an organization to get the public sympathy. So
IPL needs to involve itself with social welfares related works.
Advertisement to be given through the various medias about the products of IPL for
the awareness of the general mass.
50
CHAPTER SEVEN
REFERENC,
Annexure A (Sample)
7.1 References
1. Arens Alvin A and Loebbecke James K.; Auditing- An Integrated Approach ;
Prentice Hall International; Eighth Edition; 2000.
2. Schaeffer, Mary S.; Accounts Payable: A Guide to Running an Efficient Department;
Wiley; 2004.
3. Casher, Jonathan D.; How to find and Eliminate Erroneous Payments; APA's
Employer Practices; winter 2000.
4. John Wiley and Sons; Accounting Information Systems- Essential Concepts and
Applications; Fourth Edition; 2000.
5. Wilkinson Joseph W, Cerullo Michael J, Raval Vasant and, Wong-On-Wing Bernard;
6. Romeny Mashall B & Steinbart Paul John; 2003, Accounting Inf. Annormation
Systems; Pearson Education; Ninth Edition
7. Paragraph 2, Risk Assessments and Internal Control, International Standards on
Auditing
8. Study Manual on Auditing, Intermediate Group- A, The Institute of Chartered
Accountants of Bangladesh
9. Annual report 2008,2009.2010
10. http://britannica.com
11. http://en.wikipedia.org/wiki/Accountspayable
12. http://www.bizmanualz.com?src=ART81
13. http://oacr.ufl.edu/Investigations.htm#5
14. http://en.wikipedia.org/wiki/Accountspayable
7.2 Annexure-A
51
Unit
Depth
Date
Serial #
Development
8. Remarks
53
Incepta Pharmaceuticals
..
Voucher No
Vendor No
Invoice / Bill
Due Date
Description
Date:
: ..
Payable
:
Vat
:
Commission :
Item
AP Journal Voucher
..
..
..
Amount Cr.
Amount Dr
Amount Dr
Description
Signature
Prepared by
Checked by
Approved by
Posted by
54
0/00/00
Total (Tk) :
Account no
Date
0/00/00
Notes
Amount
(Tk)
Dr./
Cr
Vendors
no
Vendors
name
AP JV No
JV Date
Date:
Vendor
No
Signature
Check
No
Date
Prepared by
Checked by
Approved by
Posted by
55
type
Account
no
Payee
0/00/00
Amount
(Tk)
Dr.
/Cr