This policy is issued to ensure that Podder & Associates remains Independent as Professional Accountant & Business Adviser. The policy seeks to cover all aspects mentioned in the Guidance note of the Institute of Cost & Management Accountants of Bangladesh headed Ethics & Independence of Auditors, the Cost & Management Accountants Ordinance, 1977 and the Companies Act, 1994. A set of procedures are given under the policy which are mandatory to all partners and employees.

Policy for Consultants:

I. The firm will not accept statutory audit of

• an organization where one of the partners is a Director / Partner / Trustee / Managing Committee member;
• an organization where relative of a partner is a Managing Director or whole time Director. Where, however, such a relative is a Director then while the firm may accept the audit the related partner should not conduct the audit;
• an organization where either the firm or one of the partners has substantial interest* in the organization. Where such audit of such an organization is conducted then appropriate disclosure should be made of the substantial interest;
• a Company where either the firm or one of the partners holds any shares / securities carrying voting rights;
• an organization where one of the partners is an employee or officer;
• an organization where one of the partners is a partner of a person in employment of an officer or of an employee of the organization;
• an organization where a partner is or becomes indebted for an amount exceeding BDT.1000;
• an organization where a partner has or gives a guarantee or provides any security in connection with indebtedness of any third person to the organization for any amount exceeding BDT. 1000.

* Substantial interest is defined as 20% or more shareholding with fixed rate of dividend or the entitlement to share of profit is 20 percent or more.

NOTE:

1. The above will also apply to such body's subsidiary, co-subsidiary or holding company.
2. It is possible that circumstances not mentioned above arise and impact independence then the decision whether such a relationship is to be treated as non-independent will be decided by the designated person. He will record reasons for the decision made.
3. The firm will not accept fees which are contingent upon results of employment. For example, percentage of refund obtained.
4. Fees as percentage of paid-up capital can be accepted in the case of co-operative society.
5. Similarly, in the case of appointment as valuer under the Estate Duty Act and the Wealth Tax Act fees as percentage of the value of Property can be accepted.

Policy for Employees:

Where an employee is a director / Partner / Trustee / Managing Committee member he will not be assigned to such an organization for audit.

• An employee will not be assigned to audit an organization where he is related to a Director [including Managing Director or Whole Director] / a Partner / Trustee / Managing Committee member.
• An employee will not be assigned to audit an organization where he has substantial interest*.
• An employee will not be assigned to audit of a Company where he holds any shares / securities with voting rights.
• An employee will not be assigned to conduct statutory audit of an organization where he is an officer or an employee.
• An employee will not be assigned to conduct statutory audit of an organization to which he is indebted for an amount exceeding BDT. 1,000 or where employee has given any guarantee or provided any security for an amount exceeding BDT. 1,000.

* substantial interest is defined as 20% shareholding or more with fixed rate of dividend or the entitlement to share of profit is 20 percent or more.