ISSN 1817-5090

The Cost and Management

Vol. 35 No. 6
November-December, 2007 pp. 52-64

Audit Committee Disclosure of Listed Companies in

Bangladesh: An Empirical Study
Shilpi Das
Sumon Das
Abstract: This study first has identified the importance of audit committee for an
organization and then tried to find out the quality of audit committee of the listed
Public Limited Companies (PLCs) in Bangladesh. The twelve criteria were identified
from the guidelines suggested by Securities and Exchange Commission (SEC) in
2006 was taken as benchmark for this study. The annual reports of a sample of 81
PLCs have been surveyed to determine the nature and extent of disclosure by
computing total score and an Audit Committee Disclosure Index (ACDI). The
study results show that 59 companies (72.84%) are disclosing audit committee
with a mean score of 7.12 (ACDI 59.32). The results also showed that the
companies are focusing more on composition of audit committee and chairman
of audit committee and little focus is placed on suspected infringement of laws,
reporting to the authorities and report of conflict of interest. As the average score
of the companies are 7.12 (Out of the total scores possible 12), conclusion has
been drawn that the audit committee fails to bring transparency in the management
and protection of shareholders interest up to their desired level.
Keywords: Audit Committee, Internal Control, Independent Auditor.

Introduction
An audit committee is a selected number of members of a company’s board of directors whose
responsibilities include helping auditors, remain independent of management (Arens et al.,
2000). An audit committee can be defined as a sub-committee in the Governing Body (Board
of Directors) that makes arrangements for the audit and also as a subcommittee of the Board,
this committee tries to enhance the ability of the Board to fulfill its legal responsibilities and
ensure the credibility and objectivity of the financial reports (Hossain, 2006 ). Companies
establish an audit committee within the Board of Directors to take active role in overseeing the
company’s accounting and financial reporting policies and practices (Whittington and Pany,
2001). Most audit committees are made up of three to five or sometimes as many as seven
directors who are not a part of company management. The committee should represent the
owners and not the management. Actually, most of the directors who are the parts of the audit
committee should be outside directors who have no other relationship that may impair their
independence (Whittington and Pany, 2001). Independent audit committee members, as outside
Ms. Shilpi Das and Mr. Sumon Das are Lecturers, Faculty of Business Administration, Stamford University, Bangladesh.

52
 Audit Committee Disclosure of Listed Companies in Bangladesh: An Empirical Study

directors, may view the directorate as a means of enhancing their reputation as experts in
decision control (Fama and Jensen, 1983). Among other functions, it is usually assigned the
duty of oversight of the financial reporting and auditing process. The auditor’s major dealing
with the governing body will be through audit committee, although the auditor will usually
meet with the full governing body at least once per year. The key to effective financial reporting
oversight is the competency, strength and independence of audit committee.
A typical audit committee decides such things as which audit firm to retain and the scope of
services the audit firm is to perform. It meets periodically with the audit firm to discuss audit
progress and findings and helps resolve conflicts between the audit firm and management. Audit
committees for larger companies are looked upon with favor by most auditors, users, and
management. The requirement of an audit committee would be costly for smaller companies.
There are two predominant schools of thoughts relating to audit committee :( i) the first school
maintains that the audit committee should be entirely composed of non-executive directors who
have no management responsibilities or affiliations. It is claimed that this is the only way to
ensure the complete independence of the committee in its evaluation of management and audit
representation. (ii) The second school claims that at the very least there should be one management
representative on the committee. It would provide a more balanced perspective to the problems
under committee investigation. The problem with this kind of structures is the potentially adverse
effect that the management representative may have on the committee’s independence.
The audit committee will assist the board in fulfilling its oversight responsibilities including
implementation of the objectives, strategies and overall business plans set by the board for
effective functioning of the organization. Role of the audit committee is also important in
evolving an effective procedure for financial reporting disclosure, developing a suitable internal
control system and maintaining liaison with internal and external auditors to minimize various
business risks. Moreover, new business opportunities and increased competition due to
globalization of markets, increased use of electronics and information technology, increased
complexity of transactions, accounting standards and regulatory requirements are contributing
to essentiality and expansion of the role of audit committee. Responsibilities of the audit
committee typically include:
1. To enhance the ability of governing body to fulfill its legal responsibilities.
2. To add to the credibility and objectivity of financial reports;
3. To oversee the application of appropriate accounting policies and procedures including
appropriate disclosures.
4. To establish and monitor corporate policies to prohibit unethical, questionable or illegal
activities.
5. To establish and monitor effective internal and management control.
6. To provide a communication link between management, auditors and governing body.
7. To approve the annual accounts and approving the annual budget and major capital
expenditures of the company.

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Das & Das

Components of an Audit Committee

Audit committee of the board of an organization can play an effective role in providing a
bridge between the board and management, shareholders, depositors and stakeholders. The
committee will review the financial reporting process, the system of internal control and
management of financial risks, the audit process for monitoring compliance with laws and
regulations and its own code of business conduct. According to Gay (2001) characteristics of
an effective audit committee should include:
a) Audit committees are perceived to be independent and actually exercise independence in
their dealings with management and auditors.
b) These committees are composed of experienced and competent non-executive directors.
c) Audit committees should be established by a resolution of the full board of the governing
body.
d) Audit committees should have limited number of members.
e) Audit committees are given explicit objectives and terms or references that are subject to
regular review.
f) Audit committee members should meet regularly prior to board meetings and make
provisions for adhoc meetings at the request of the auditors and management.
g) Audit committees should circulate agendas and minutes to relevant parties.
In Bangladesh, the existence of audit committee was not mandatory in the earlier/previous
years. But in the year 2006 Securities & Exchange Commission (SEC) provide some conditions
relating to audit committee. SEC Notification No. SEC/CMRRCD/2006-158/Admin/02-08, Dated
the 20th February, 2006 discussed several guidelines related to audit committees in several
ways. This notification suggested that a company should have an Audit Committee as a sub-
committee of the Board of Directors. The Audit Committee should assist the Board of Directors
in ensuring that the financial statements reflect true and fair view of the state of affairs of the
company and in ensuring a good monitoring system within the business. The Audit Committee
shall be responsible to the Board of Directors. The duties of the Audit Committee should be
clearly set forth in writing. The company wants to listed with any stock exchange in Bangladesh
should comply with the following conditions or shall explain the reasons for non compliance:
Constitution of Audit Committee
According to constitution, the SEC suggested the followings:
(i) The Audit Committee should be composed of at least 3 (three) members.
(ii) The Board of Directors should appoint members of the Audit Committee who should be
directors of the company and should include at least one independent director.
(iii) When the term of service of the Committee members expires or there is any circumstance
causing any Committee member to be unable to hold office until expiration of the term of
service, thus making the number of the Committee members to be lower than the prescribed
number of 3 (three) persons, the Board of Directors should appoint the new Committee
member(s) to fill up the vacancy(ies) immediately or not later than 1 (one) month from the
date of vacancy(ies) in the Committee to ensure continuity of the performance of work of
the Audit Committee.
54 The Cost and Management, November-December, 2007
 Audit Committee Disclosure of Listed Companies in Bangladesh: An Empirical Study

Chairman of the Audit Committee

The SEC suggested the followings in relation to the chairman of the audit committee:
(i) The Board of Directors should select 1 (one) member of the Audit Committee to be Chairman
of the Audit Committee.
(ii) The Chairman of the audit committee should have a professional qualification or knowledge,
understanding and experience in accounting or finance.
Reporting of the Audit Committee
The reporting on audit committee matters is suggested in the following threefold ways:
A. Reporting to the Board of Directors: The Audit Committee should report on its activities
to the Board of Directors. The Audit Committee should immediately report to the Board of
Directors on the following findings, if any:
1. Report on conflicts of interests;
2. Suspected or presumed fraud or irregularity or material defect in the internal control
system;
3. Suspected infringement of laws, including securities related laws, rules and regulations;
4. Any other matter which should be disclosed to the Board of Directors immediately.
B. Reporting to the Authorities: If the Audit Committee has reported to the Board of Directors
about anything which has material impact on the financial condition and results of operation
and has discussed with the Board of Directors and the management that any rectification is
necessary and if the Audit Committee finds that such rectification has been unreasonably
ignored, the Audit Committee should report such finding to the Commission, upon reporting
of such matters to the Board of Directors for three times or completion of a period of 9 (nine)
months from the date of first reporting to the Board of Directors, whichever is earlier.
C. Reporting to the Shareholders and General Investors: Report on activities carried out by
the Audit Committee, including any report made to the Board of Directors during the year,
should be signed by the Chairman of the Audit Committee and disclosed in the annual
report of the issuer company.

Objectives and Methodology of the Study

The main objectives of this study are:
1. To give an overview of audit committee including its importance in different organization;
2. To analyze the scenario of audit committee disclosure practice in Bangladesh;
3. To compare the current audit committee disclosure practice with the standard suggested
by SEC.
4. To highlight the area of regulatory framework regarding audit committee and reporting
aspects in Bangladesh.
5. To study the real picture of reporting followed by the audit committee in Bangladesh.

The Cost and Management, November-December, 2007 55

Das & Das

For this study, the population was the total number of annual reports of the listed public
limited companies up to November 2006, which was found to be 251(as we consider the
annual reports of 2006). Out of these PLCs, a sample of 81 (32.27 percent) has been selected
under simple random basis. The sample companies’ annual reports have been surveyed
extensively for audit committee since their listing in the Dhaka Stock Exchange (DSE). The
relevant reports were surveyed from the library of the Dhaka Stock Exchange. The population
and sample have been shown below in Table 1 on the basis of various industrial sectors:
Table -1: The population of the study under different industrial sectors
Sector Population Sample Percentage
Banks & Financial Institutions 34 28 82.35%
Insurance 31 12 38.71%
Engineering 22 5 22.73%
Food & Allied 35 9 25.71%
Service 5 2 40.00%
Textile 38 9 23.68%
Paper & Packing 8 1 12.50%
Pharmaceuticals & chemical 24 7 29.71%
Miscellaneous 44 8 18.18%
Total 81

In this study, an attempt has been made to find out the nature and extent of information
disclosed in the audit committee of disclosing companies by comparing with the components
suggested by SEC (2006). We identified the following twelve guidelines as a criterion:
1. Composition of Audit Committee;
2. Audit Committee members appointment;
3. Term of service of Audit Committee;
4. Chairman of Audit Committee;
5. Chairman’s Qualification;
6. Reporting to the Board of Directors;
7. Report of Conflict of Interest;
8. Defect in the internal Control System;
9. Suspected infringement of laws;
10. Reporting to the Authorities;
11. Reporting to the Shareholders; and
12. Any other matter.
In examining each of these components, a dichotomous procedure is followed where each
company was awarded a score of ‘1’ if the company appears to have disclosed the concerned
component and ‘0’ otherwise. The score of each company was totaled to find the net score of
the company. An Audit Committee Disclosure Index (ACDI) was then computed by using the
following formula:
Total Score of the Individual Company
ACDI= × 100
Max. Possible Score
56 The Cost and Management, November-December, 2007
 Audit Committee Disclosure of Listed Companies in Bangladesh: An Empirical Study

In this study, the maximum possible score obtainable by a company is 12. So in particular,
ACDI for this study becomes:
Total Score of the Individual Company
ACDI= × 100
12

Findings of the Study

The study has attempted to examine the state of audit committee disclosure in public limited
companies enlisted with DSE in Bangladesh.
Total Score and Audit Committee Disclosure Index of Listed Public Limited Companies:
The Audit Committee Disclosure Index (ACDI) has been computed by calculating total score
for each disclosing companies. Individual ACDI of each company has been shown in Exhibit-
A1 in the Annexure. Descriptive statistics of Total Score is shown in Table 2:
Table-2: Descriptive Statistics of Total Score
Sector N Minimum Maximum Mean SD
Banks & Financial Institutions 25 2 12 6.96 3.1
Insurance 10 1 11 6.4 3.34
Engineering 3 1 12 8 6.08
Food & Allied 3 1 6 4 2.65
Service 2 1 12 6.5 7.78
Textile 7 1 12 7.29 4.35
Pharmaceuticals & chemical 4 5 12 10 3.37
Miscellaneous 5 1 12 8.4 5.13
Total 59 1 12 7.193 1.746
Source: Compiled and Computed from Exhibit- A1; N: Number of Companies.

According to SEC (2006) guidelines, we identified twelve criteria about audit committee of a
company. In this survey, a total of 59 companies (72.84% of the sample size 81) have found to
disclose audit committee in their respective annual reports. Moreover, eleven companies have
been found to disclose maximum twelve criteria (Uttra Finance and Investments Limited, Singer
Bangladesh Limited, Renata Limited, Niloy Cement Industries Limited, Lafarge Surma Cement
Limited, Eastern Housing Ltd, Eastern Bank Limited, Delta Spinners Limited, BEXTEX Ltd,
Beximco Pharma, Apex Tannery Limited ) and another six company to disclose minimum one
criterion (Shinepukur Holdings Ltd, Pragati Insurance Limited, Meghna Cement Mills Limited,
Jute Spinners Limited, Eastern Cables limited, Beximco Fisheries Limited ) in their respective
audit committee. The average score is found to be 7.12 (average ACDI 59.32) with average
standard deviation of 1.7466 (maximum standard deviation is in service sector and minimum
in Food & Allied Sector).
Following table shows frequency distribution of total score and ACDI:

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Das & Das

Table-3: Frequency Distribution of Total Score and ACDI

Score ACDI N Cumulative N % Cumulative %
1.00 8.33% 6 6 10.17% 10.17%
2.00 16.67% 2 8 3.39% 13.56%
3.00 25.00% 2 10 3.39% 16.95%
4.00 33.33% 3 13 5.08% 22.03%
5.00 41.67% 12 25 20.34% 42.37%
6.00 50.00% 6 31 10.17% 52.54%
7.00 58.33% 3 34 5.08% 57.63%
8.00 66.67% 2 36 3.39% 61.02%
9.00 75.00% 0 36 0.00% 61.02%
10.00 83.33% 5 41 8.47% 69.49%
11.00 91.67% 7 48 11.86% 81.36%
12.00 100.00% 11 59 18.64% 100.00%

As shown in the above table, the highest number of companies (12) falls in the ACDI score of
41.67% and in the upper extreme (ACDI 100.00%) as well in the lower extreme (ACDI 8.33%)
there exists eleven and six company respectively. The results shows that the state of audit
committee disclosure in the annual reports of PLCs is not so poor as the average score (7.12) is
above 6 (half of maximum score of 12). But, it is apparent that the listed PLCs do not seem to
be much interested in following SEC guidelines and do not give a proper thought in the audit
committee disclosure.
Extent of Sector-wise and Item-wise Audit Committee Disclosure by the Listed PLCs:
The audit committee disclosure practices of different industrial sectors of Bangladesh with
reference to the selected twelve components are shown in Exhibit-A2 in the Annexure. Based
on the sectors of the companies, the exhibit shows that Pharmaceuticals sector scored the
maximum average of ACDI (83.33) followed by miscellaneous sector (70.00) and then
Engineering Sector (66.67). The lowest average score of ACDI was obtained by Food & Allied
Sector (33.33). This is an indication of the fact that the Pharmaceuticals sector is showing great
commitment towards disclosing their audit committee.
Among the twelve criteria, the survey found that maximum companies (56 companies out of
59) focused on composition of audit committee and focus on suspected infringement of laws
(only 38.98% companies, 23 in numbers) was the minimum.
According to the guidelines suggested by SEC the following are the findings:
1. Composition of Audit Committee: According to the survey, 56 companies out of 59
companies (94.92%) mentioned about their Composition of Audit Committee in the audit
committee disclosure. From the total number of companies Insurance Sector (9 company
out of 10 companies, 90.00%), Pharmaceuticals & Chemical Sector (4 companies out of 4
companies, 100.00%), Miscellaneous Sector (4 companies out of 5 companies, 80%),
Textile Sector (7 companies out of companies, 100.00%), Banks & Financial Institutions
Sector (25 companies out of 25 companies, 100.00%), Engineering Sector (2 companies
out of 4 companies, 66.67%) , Food & Allied Sector (3 company out of 3 companies,
100.00%) and Service sector (2 company out of 2 companies, 100.00%) mentioned about
58 The Cost and Management, November-December, 2007
 Audit Committee Disclosure of Listed Companies in Bangladesh: An Empirical Study

their composition of the audit committee. As example, the Audit Committee of Apex
Tannery Limited is, “.......During the year the Board Audit Committee was set up to review
the financial results audit and compliance with the statutory and regulatory requirements....”.
2. Audit Committee members appointment:
According to the survey, 34 companies (57.63%) mentioned about Audit Committee
members appointment in their audit committee. Banks & Financial institutions (12
companies, 48.00%), Insurance (3 company, 30.00%), Pharmaceuticals & chemical (4
companies, 100%), Textile (6 companies, 85.71%), Engineering (2 companies, 66.67%),
Food & Allied (2 companies, 66.67%), Miscellaneous (4 companies, 80%) and Service (1
company, 50.00%) sectors mentioned about their audit committee members appointment
in the disclosure of audit committee. As example, the audit committee of Pubali Bank
Limited is, “The Board reconstituted the audit committee in its 553rd meeting held on
30.03.2006 comprising following members of the Board of Director———.”
3. Term of service of Audit Committee:
A total of 27 companies (45.76%) mentioned about Term of service of Audit Committee
in the disclosure. Mention about term of service was found in 10 banking companies, 3
pharmaceuticals companies, 3 textile companies, 6 insurance companies and 3
miscellaneous companies. One engineering and one service Sector Company also
mentioned about the term of service. But, Food & Allied sector companies did not mention
anything about their term of service in the disclosure of audit committee. As example, the
audit committee of NCC Bank Limited states: “….The audit committee of the Board of
Directors of the Bank re-constituted earlier in accordance with Bangladesh Bank’s BPRD
circular No. 12 dated 23 December2002, continued up to 30th may 2006,…..subsequently,
the audit committee was re-constituted with its member ...”
4. Chairman of Audit Committee:
A total of 50 companies (84.75%) mentioned about their existence of chairman of audit
committee in the disclosure. For example, Abtab Automobiles Limited is “………..The
audit committee has been formed ..... 12, November, 2006 comprising of the following
member: Chairman: Mr. Syed Masud Hasan, Independent Director………….”
5. Chairman’s Qualification:
According to the survey, 41 companies (69.49%) mentioned about their chairman’s
qualification in the disclosure of audit committee. Banks & Financial institutions (11
companies), Insurance (2 company), Service (1 company) Textile (1 company), Engineering
(1 company), Food & Allied (1 company), and Miscellaneous (1 company), sectors do not
mentioned anything about their chairman’s qualification. As example the audit committee
of IDLC discloses that “……..The committee is headed by a director who has professional
background in accounting and finance…………..”
6. Reporting to the Board of Directors:
According to the survey, 45 companies (76.27%) mentioned about their Reporting to the
Board of Directors in their audit committee. Banks & Financial institutions (20 companies,
80.00%), Insurance (7 companies, 70.00%), Pharmaceuticals & chemical (4 companies,
100%), Textile (6 companies, 85.71%), Engineering (2 companies, 66.67%), Food & Allied
(companies, 33.33%), Miscellaneous (4 companies, 80%) and Service (1 company, 50.00%)

The Cost and Management, November-December, 2007 59

Das & Das

sectors mentioned about their Reporting to the Board of Directors in the disclosure of
audit committee. As example, the audit committee of Brac Bank. is, “….The audit committee
reports directly to the Board of Directors and assists the Board in meeting its
responsibilities……...”
7. Report of Conflict of Interest:
About 44.07% companies (26 in number) mentioned about their reporting on conflict of
interest in their disclosure of audit committee. Banks & Financial institutions (11 companies,
44.00%), Engineering (2 companies, 66.67%), Food & Allied (0 company, 0%), Insurance
(3 companies, 30.00%), Pharmaceuticals & chemical (3 companies, 75.00%), Textile (3
companies, 42.86%) and Miscellaneous (3 companies, 60%) and service (1 company,
50.00%) sectors mentioned about their reporting on conflict of interest in their disclosure
of audit committee. For example, Purabi General Insurance Ltd mentioned about their
report of Conflict of Interest by saying “.... will report to the board....”
8. Defect in the internal Control System:
A total of 29 companies (49.15%) mentioned about their defect in the internal Control
System in their disclosure of audit committee. For example, defect in the internal control
system of Renata Limited state that “….Does not arise....”
9. Suspected infringement of laws:
Out of 59 companies, 23 companies (49.15%) mentioned about their suspected
infringement of laws in their disclosure of audit committee. No company in the Food &
Allied sector mentioned anything about this in the disclosure. As for example, the audit
committee of Munno Jutex Industries Ltd states about suspected infringement of laws that,
“….No such incidence....”
10. Reporting to the Authorities:
A total of 26 companies (44.07%) mentioned about their reporting to the authorities in the
disclosure of audit committee. Mention about reporting to the authorities was found in 9
banking , 3 pharmaceuticals , 3 engineering , 3 insurance, , 3 textile and 3 miscellaneous
companies. One food & allied and one service sector company also mentioned about the
technology. As example, the audit committee of IDLC states:”…………..the audit committee
clearly lay down its authority, responsibility and specific duties”
11. Reporting to the Shareholders:
A total of 34 companies (57.63%) mentioned about their reporting to the shareholders in
the disclosure of audit committee. Mention about reporting to the shareholder was found
in 16 banking, 3 pharmaceuticals, 2 engineering, 5 insurance, 3 textile and 3 miscellaneous
companies. One food & allied and one service sector company also mentioned about the
technology. As for example, the audit committee of Shahjalal Islami Bank reporting to the
shareholders states that, “…. The condition is under review....”.
12. Any other matter:
A total of 29 companies (49.15%) mentioned about any other matter in the disclosure of
audit committee. Only food and allied did not mentioned any thing about this. For example,
reporting of any other matter to the Board of Director, Apex Food Limited disclose-”…..Not
applicable, there was no such event to report…….”.

60 The Cost and Management, November-December, 2007

 Audit Committee Disclosure of Listed Companies in Bangladesh: An Empirical Study

Concluding Remarks and Scope of Future Research

There is no doubt , as a monitoring committee consisting of majority of independent directors,
an audit committee ensures better governance in an organization and thus safeguards the
shareholders’ interest. The concept is getting importance in the business world. Now the
information of audit committee becomes mandatory in Bangladesh (by SEC). Though it was
thought that this will bring more transparency in the management and protection of shareholders,
interest, but it fails because many organizations just fill up the SEC status by giving a tick mark
in the complied column. In some cases, the information which is disclosed under the head
audit committee is different from their complied status column. For example – Dutch Bangla
Bank Limited disclosed their chairman’s qualification a by marking tick in the complied
column, but the chairman’s qualification under the head ‘ Disclosure on Audit Committee of
The Board’ is – B.S.C. Engineer (chemical). On the other hand most of the organization (except
Banking and Financial sector) only fill up the format but didn’t provide any explanation of it.
Again Beximco Fisheries Limited and Shinepukur Holdings Ltd only disclose ‘Audit Committee’
but the subheadings of the audit committee are not disclosed in their report.
The survey findings also show that in Bangladesh, 72.84 % of the sampled companies are
disclosing audit committee in the annual reports. It means that about 27.16% companies are
not disclosing audit committee at all. Many organizations misapprehend the nature and
importance of audit committee, while others fail to consider it at all. In case of Bangladesh,
unfortunately it can’t be ignored as it is mandatory from 2006. Bangladeshi companies are still
not successful in using the audit committee as a strategic tool. As a result, the audit committee
is somewhat becoming a tool to make the annual report attractive to the users. Future study
can be undertaken in this area by relating the quality of audit committee with the performance
of the company i.e., role of audit committee in improving corporate governance & quality of
reporting. Besides, study can also be undertaken in case of non-profit organizations as well to
find out its relationship with the performance of the entity.ˆ

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62 The Cost and Management, November-December, 2007

 Audit Committee Disclosure of Listed Companies in Bangladesh: An Empirical Study

Annexure
Exhibit-A1 Audit Committee Disclosure Index (ACDI) of listed public limited companies.
S.L Name of the Company Total ACDI
1 Uttra Finance and Investments Limited 12 100.00%
2 Singer Bangladesh Limited 12 100.00%
3 Renata Limited 12 100.00%
4 Niloy Cement Industries Limited 12 100.00%
5 Lafarge Surma Cement Limited 12 100.00%
6 Eastern Housing Ltd 12 100.00%
7 Eastern Bank Limited 12 100.00%
8 Delta Spinners Limited 12 100.00%
9 BEXTEX Ltd 12 100.00%
10 Beximco Pharma 12 100.00%
11 Apex Tannery Limited 12 100.00%
12 The City Bank Limited 11 91.67%
13 Progressive Life Insurance Company limited 11 91.67%
14 NCC Bank Limited 11 91.67%
15 Green Delta Insurance Company Ltd 11 91.67%
16 Beximco Synthetics Limited 11 91.67%
17 Aftab Automobilies limited 11 91.67%
18 ACI 11 91.67%
19 Pubali Bank Limited 10 83.33%
20 Popular Life Insurance Company Limited 10 83.33%
21 Mercantile Bank Limited 10 83.33%
22 Dhaka Bank 10 83.33%
23 Bangladesh Industrial Finance Company Ltd. 10 83.33%
24 Prime Bank Limited 8 66.67%
25 Brac Bank 8 66.67%
26 Uttra Bank Ltd 7 58.33%
27 Pragati Life Insurance Limited 7 58.33%
28 IDLC 7 58.33%
29 United Leasing company Limited 6 50.00%
30 Southeast Bank Limited 6 50.00%
31 Nitol Insurance Company Limited 6 50.00%
32 National Tea Co. Ltd. 6 50.00%
33 Jamuna Bank Limited 6 50.00%
34 EXIM Bank 6 50.00%
35 The IBN SINA Pharmaceutical Industry Ltd 5 41.67%
36 Social Investment Bank Limited 5 41.67%
37 Shahjal Islami BanK 5 41.67%
38 Peoples Insurance company Limited 5 41.67%
39 Monno Jutex Industries ltd. 5 41.67%
40 Monno fabrics Ltd 5 41.67%
41 Monno Ceramic Industries Ltd. 5 41.67%
42 Islamic Finance & Investment Limited 5 41.67%
43 Eastland Insurance Company Limited 5 41.67%
44 Dutch Bangla Bank Limited 5 41.67%
45 Apex Spinning & Knitting Mills Limited 5 41.67%
46 Apex Foods Limited 5 41.67%
47 The Premier bank Limited 4 33.33%
48 Purabi General Insurance Company limited 4 33.33%
49 Central Insurance Company Limited 4 33.33%
50 Trust Bank 3 25.00%
51 Islami Bank Bangladesh Limited 3 25.00%
52 One Bank Limited 2 16.67%
53 Investment Corporation of Bangladesh 2 16.67%
54 Shinepukur Holdings Ltd 1 8.33%
55 Pragati Insurance Limited 1 8.33%
56 Meghna Cement Mills Limited 1 8.33%
57 Jute Spinners Limited 1 8.33%
58 Eastern Cables limited 1 8.33%
59 Beximco Fisheries Limited 1 8.33%

The Cost and Management, November-December, 2007 63

64
Exhibit-A3: Disclosure practice of various sectors under different components of Audit committee
Das & Das

1 2 3 4 5 6 7 8 9 10 11 12 13
Sector Composition Audit Term of Chairman Chairman’s Reporting Report of Defect Suspected Reporting Reporting Any Other Average
of Audit Comm. Service Of Audit Qualification To the Conflict of In the Infringement to the to the Matter ACDI
Comm. Members of Audit Comm. BOD Interest Internal of laws Author Share
Appoint. Comm. Control holders
System
Banks & Financial Institutions 25 12 10 23 14 20 11 13 8 9 16 13
44.64% 35.29% 37.04% 46.00% 34.15% 44.44% 42.31% 44.83% 34.78% 34.62% 47.06% 44.83% 58.00%
Insurance 9 3 6 8 8 7 3 4 4 3 5 4
16.07% 8.82% 22.22% 16.00% 19.51% 15.56% 11.54% 13.79% 17.39% 11.54% 14.71% 13.79% 53.33%
Engineering 2 2 1 2 2 2 2 2 2 3 2 2
3.57% 5.88% 3.70% 4.00% 4.88% 4.44% 7.69% 6.90% 8.70% 11.54% 5.88% 6.90% 66.67%
Food & Allied 3 2 0 2 2 1 0 0 0 1 1 0
5.36% 5.88% 0.00% 4.00% 4.88% 2.22% 0.00% 0.00% 0.00% 3.85% 2.94% 0.00% 33.33%
Service 2 1 1 1 1 1 1 1 1 1 1 1
3.57% 2.94% 3.70% 2.00% 2.44% 2.22% 3.85% 3.45% 4.35% 3.85% 2.94% 3.45% 54.20%
Textile 7 6 3 6 6 6 3 3 3 3 3 2
12.50% 17.65% 11.11% 12.00% 14.63% 13.33% 11.54% 10.34% 13.04% 11.54% 8.82% 6.90% 60.71%
Pharmaceuticals & chemical 4 4 3 4 4 4 3 3 2 3 3 3
7.14% 11.76% 11.11% 8.00% 9.76% 8.89% 11.54% 10.34% 8.70% 11.54% 8.82% 10.34% 83.33%
Miscellaneous 4 4 3 4 4 4 3 3 3 3 3 4
7.14% 11.76% 11.11% 8.00% 9.76% 8.89% 11.54% 10.34% 13.04% 11.54% 8.82% 13.79% 70.00%
Total 56 34 27 50 41 45 26 29 23 26 34 29
100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

The Cost and Management, November-December, 2007