An Internship Report On “Internal Audit & Control Practice of Garments Manufacturing Company - A Study on Lantabur Group”

Lantabur Group
Corporate Office, Uttara, Dhaka.
DAFFODIL INTERNATIONAL UNIVERSITY
Faculty of Business Administration
An Internship Report
On
“Internal Audit & Control Practice of Garments Manufacturing
Company - A Study on Lantabur Group”
Prepared By:
Talukder Abdulla-Al-Mamun
ID No: 133-14-474
MBA Program
Daffodil International University
A report submitted in partial fulfillment of the requirements for the Professional
degree of Master’s of Business Administration (MBA) Major in Finance.
Supervised By:
Professor Dr. Md. Abul Hossain
Coordinator (MBA Program)
Date of Submission: 23rd May, 2015

Lantabur Group
On
Supervised By:
Professor Dr. Md. Abul Hossain

Lantabur Group
On
Prepared By:
Talukder Abdulla-Al-Mamun
ID No: 133-14-474
MBA Program

Lantabur Group
“Internal Audit & Control Practice of Garments Manufacturing Company - A Study on Lantabur Group” I
LETTER OF TRANSMITTAL
April 08, 2015
Professors Dr. Md. Abul Hossain
Uttara Campus
Subject: Submission of Internship Report on an “Internal Audit & Control Practice of
Garments Manufacturing Company - A Study on Lantabur Group”
Dear Sir,
With profound respect and honor I would like to inform that, It’s my pleasure to submit the internship
report an “Internal Audit & Control Practice of Garments Manufacturing Company - A Study
on Lantabur Group” within due time. This report presented in partial fulfillment of the requirements
for the Degree of Master’s of Business Administration
It was a great opportunity for me to acquire practical knowledge & experience of empirical study.
During the preparation of my report, with the help of the company & my institution I tried my best to
bring up the need of Internal Audit & Control Practice of Garments Manufacturing Company &
utilization in our country. Under this paper I hope that you will find all the necessary information of
our procedures into our findings and analyses.
I would like to thank all the staff of Lantabur Group for their kind co-operation & making me familiar
with the environment. I would not have been so enjoyable there without their friendliness.
Now I am glad to submit my report to you. Your kind acceptance will be highly appreciated.
Yours Sincerely
(Talukder Abdulla-Al-Mamun)
ID No: 133-14-474
MBA Program, Major: Finance
Daffodil International University, Uttara Campus.

Lantabur Group
“Internal Audit & Control Practice of Garments Manufacturing Company - A Study on Lantabur Group” II
CERTIFICATE Of APPROVAL
I am enormously please to certify that Talukder Abdulla-Al-Mamun is a student of the
Department of Business Administration, 36th Batch, ID. No: 133-14-474, Daffodil
International University have been completed his Internship Program under my supervision.
He has completed his Internship Report is “Internal Audit & Control Practice of
Garments Manufacturing Company - A Study on Lantabur Group”. He exploded the
subject matter reviewed all the relevant literatures and examined the necessary sources for
collecting relevant information.
I therefore certify and convinced to allow Talukder Abdulla-Al-Mamun, to submit his
report as I am pleased to declare that this report is solely completed under my supervision and
has not been submitted elsewhere previously to any other institution.
I wish him all the success.
.............................................
(Professor Dr. Md. Abul Hossain)

Lantabur Group
“Internal Audit & Control Practice of Garments Manufacturing Company - A Study on Lantabur Group” III
ACKNOWLEDGEMENT
First of all I would like to express my gratitude to almighty Allah for his blessings that help
me to complete this report. This Internship Report has been prepared on the basis of four
months successful completion of Internship program at Lantabur Group, Corporate
Office: House #51/C, Road # 13/B, Sector # 03, Uttara, Dhaka with the help of large group
of companies.
I would like to express my profound gratitude to my supervisor Professor Dr. MD. Abul
Hossain (Coordinator, MBA Program), Department of Business Administration, for his
cooperation in a discipline manner & providing the best effort for preparing this report. I
would like to thank my internship supervisor & my honorable teacher for giving me the
chance to work on such a tremendously topic. Without his help it was quite difficult for me to
complete this report successfully in time.
This report is the outcome of my internship program, I am very much grateful to the entire
employees of Lantabur Group for helping me to complete this report successfully. They
always guided me to finish my task in a successful way. Without their help it was quite
impossible for me to finish this report properly in time.
I am also grateful to the HRD of the Lantabur Group for offering me the Internship training.
My special thanks to the Md, Mahbub Hossain, Sr. Executive (Audit) for his great co-
operation who has given me the practical knowledge about the internal audit and control
activities.
At the very outset, my cordial thanks to Md. Abu Baker Khan, Director (Audit) of
Lantabur Group who gave me necessary information and excellent guidance during working
time in Lantabur Group.
I would like to record my sincere gratitude to the authority of Daffodil International
University for their kind co-operation.
Finally, I would like to thank my family who has been with me not only these few weeks, but
during all my life. They have been extremely patient and always willing to sacrifice when it
came to my studies and now work.

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“Internal Audit & Control Practice of Garments Manufacturing Company - A Study on Lantabur Group” IV
ABSTRACT
Internal audit and control practice has a pivotal role in ensuring sustenance of any industry
because it plays an important role in preventing and detecting fraud and protecting the
organization's resources. This study has found many factors that are relevant for internal
control practices in readymade garments (RMG) sector. These vary from maintenance of
employees’ job description to bonding employees with special access. In many variables
these companies are practicing acceptable level of internal control, while in some they are not
doing so good and have ample scope to improve that level. RMG sector is mainly populated
with sole proprietorship firms and they do not allocate much resource to such practice. Even
then the concern for internal control has to be implemented to ensure long lasting role in the
economy.
Lantabur Group is one of the largest private groups of company which is limited by shares
incorporated in Bangladesh 23 May, 2007 under the Companies Act 1994. It has established
business solely and started its functioning by opening full-fledged operation in garments
sector to provide the highest level of services in accordance with the principles of Islamic
thinking.
In this report, First Chapter is the introductory part as usual. In this part some discussion
about Introduction, Objectives, Scope, Methodology and Limitation of the report.
Second Chapter will show about History, Vision, Mission, Goal & Objectives, Various
Business Units, Major Product, Customer, Various Department & Section, Design Studio of
the Company, Management & Board of Member, Operation Activity, Company at a Glance
and SWOT Analysis of the Company.
Third Chapter shows the Concept of Auditing, Internal audit, Internal auditor, Basic
Requirements, Internal Audit Process, Common Audit Findings, Concept Internal Controls,
An internal control system , Role ,Objectives, Components, Process of Internal Control,
Audit evidence, Internal Audit and control practice of Lantabur group
Fourth Chapter shows the About Internal Audit Department, Organogram of Lantabur
Group, Duties and Responsibilities, Format of Daily Work Report, Promise to company
Fifth Chapter shows the Findings,
Sixth Chapter shows the Recommendation and Conclusive opinion of the company
Finally, I have shown the Bibliography.

Lantabur Group
“Internal Audit & Control Practice of Garments Manufacturing Company - A Study on Lantabur Group” V
TABLE OF CONTENTS
“Internal Audit & Control Practice of Garments Manufacturing Company
– A Study on Lantabur Group”
Letter of Transmittal I
Certificate of Approval II
Acknowledgement III
Abstract IV
Table of Content V –VI
List of Abbreviations VII
CHAPTER 01 INTRODUCTORY PART 1-7
1.0 Introductory Summary 1
1.1 Introduction 2
1.2 Background of the Study 3
1.3 Scope of the Study 4
1.4 Objective of the Study 5
1.5 Methodology of the Study 5-6
1.6 Limitation of the Study 7
CHAPTER 02 COMPANYPROFILE 8-23
2.0 Company Profile Summary 8
2.1 About Lantabur Group. 9
2.2 Corporate Logo 9
2.3 Vision, Mission Goal & Objectives 10
2.4 Different (Business Unit) of Lantabur Group 11
2.5 Nature of Business activities 11
2.6 Capital Structure of the Company 11
2.7 Major Customer (Buyer) 12
2.8 Major Products 13
2.9 Various Departments of Lantabur Group 13
2.10 Various Sections for production 14
2.11 Services of Lantabur Group 14-15
2.12 Design Studio of Lantabur Group 15-17
2.13 Members of the Board of Director and Management 18
2.14 Corporate Information at a glance 19
2.15 Corporate Culture 20
2.16 Management of Lantabur Group 20
2.17 Human resource management of Lantabur Group 20
2.18 Performance Analysis of Lantabur Group 21
2.19 Company SWOT Analysis 21-23

Lantabur Group
“Internal Audit & Control Practice of Garments Manufacturing Company - A Study on Lantabur Group” VI
CHAPTER 03 INTERNALAUDIT&CONTROLOFLITERATURE
REVIEW
24-33
3.0 Internal Audit & Control of Literature review 24
3.1 Concept of Auditing 25
3.2 Defined Auditing 25
3.3 Concept of Internal Audit 25
3.4 Defined Internal Auditing 26
3.5 Defined Internal auditor 26
3.6 Why internal audits function 26
3.7 Internal Audits Activities 27
3.8 Internal Audit Process 28-29
3.9 Common Audit Findings 30
3.10 Concept of Internal Controls 31
3.11 Internal Controls Defined 31
3.12 An internal control system 31
3.13 Role in Internal Controls 32
3.14 Components of Internal Control 32
3.15 Internal Control Process Objectives 32-33
3.16 Audit evidence 33
CHAPTER 04 AUDITDEPARTMENTOFLANTABURGROUP 34-42
4.0 Audit Department of Lantabur Group 34
4.1 About Internal Audit Department 35
4.2 Internal Audit and control practice of Lantabur group 36
4.3 Organogram of Internal Audit Department 36
4.3.1 As an Employee My Duties and Responsibilities 37
4.3.2 The Daily Routine 37
4.4 Specific Duties / Responsibilities 37-38
4.5 Format of Daily Work Report 39
4.6 Promise to company 39
CHAPTER 05 FINDINGS 40-46
5.0 Findings Summary 40
5.1 Positive Findings 41
5.2 Negative Findings 42-43
CHAPTER 06 RECOMMENDATIONS&CONCLUSIVEOPINION 44-46
BIBLIOGRAPHY 47

Lantabur Group
“Internal Audit & Control Practice of Garments Manufacturing Company - A Study on Lantabur Group” VII
ABBREVIATION
RMG : Ready Made Garments.
BKMEA : Bangladesh Knitwear Manufacturer & Exporters Association.
BGMEA : Bangladesh Garments Manufacturer & Exporters Association.
BAS : Bangladesh Accounting Standards.
BFRS : Bangladesh Financial Reporting Standard.
ICAB : Institute of Chartered Accountants of Bangladesh.
NBR : National Board of Revenue
BTB L / C : Back to Back Letter of credit
LDBC : Local Document Bill Collection.
FDBP : Foreign Document Bill Purchase
IBP : Inland Bill Purchase.
EPB : Export Promotion Bureau.
GSP : Generalized System of Performance.
CO : Certificate of Origin.
PRC : Proceeds Realization Certificate.
IRC : Import Registration Certificate
ERC : Export Registration Certificate
IT : Income Tax.
AIT : Advance Income Tax.
FDB : Foreign Document Bill.
FDBP : Foreign Document Bill Collection.
B / L : Bill of Lading.
QC : Quality Controller.
PI : Pro-forma Invoice.
TIN : Tax Identification Number
PC : Packing Credit.
ERQ : Export Retention Quota.
UP / UD : Utilization Permission/ Utilization of Declaration.
CI : Commercial Invoice.
C & F : Clearing & Forwarding.
C & F : Cost & Freight

Lantabur Group
“Internal Audit & Control Practice of Garments Manufacturing Company - A Study on Lantabur Group” VIII

Lantabur Group
“Internal Audit & Control Practice of Garments Manufacturing Company - A Study on Lantabur Group”
1
1.1 Introduction
1.2 Background of the Study
1.3 Scope of the Study
1.4 Objective of the Study
1.5 Methodology of the Report
1.6 Limitation of the Study
1.1 Introduction
1.2 Background of the Study
1.3 Scope of the Study
1.4 Objective of the Study
1.5 Methodology of the Report
1.6 Limitation of the Study

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1. INTRODUCTORY PART
1.1 Introduction:
The role of the Ready-Made Garments (RMG) industry in the economy of Bangladesh can
not be denied. Economic history shows that RMG sector provides the largest contribution to
the growing economy of this country. RMG is a success story so far for Bangladesh. The
industry has contributed to export earnings, foreign exchange earnings, employment creation,
poverty alleviation and empowerment of women. Thus, its sustainability is of much
importance for the development of the national economy. Internal audit &control is one of
the main ingredients to ensure the long term sustainability of any organization. It helps to
ensure the attainment of the organizational goals. Thus, the internal audit &control practices
pursued by the companies in the RMG sector are one of the key determining factors of the
sustainability of this sector. Recently, the pressure for increasing labor wages, both from
labor and regulatory bodies, has influence over this sector. The operating costs of RMG
companies are rising and placing profitability and sustainability at stake. The recent political
unrest & also for increasing labor wages has turned the situation more turbulent. All these
risk- factors call for a pioneering study on the control system of this sector, so that it may be
able to manage and control any likely adverse situation in future.
With the globalization and technological innovation in the RMG business has become
competitive. To cope up with this, any employee are facilitated to have vast practical or
empirical experience and professional knowledge to some extent. For the attainment of that
purpose, as a MBA student’s in Daffodil International University (DIU), with Major in
Finance, I feel that RMG sector is my destiny to gather the real practical knowledge.
I prefer my internship in RMG sector in this regard on the report entitled “Internal Audit &
Control Practice of Garments Manufacturing Company - A Study on Lantabur
Group”. Is the result of four months internship program from January up to April 2015 in
Lantabur Group, Corporate Office, which is a 100% Export Oriented Composite knit
Industry.For continuing the study of internshipis an integral part for the completion of MBA
Program under Department of Business Administration in Daffodil International University
(DIU), Uttara Campus, Dhaka - Bangladesh.

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1.2 Background of the study
Bangladesh depends a lot on its RMG sector for export income. The main player in the
continual push for national development is the RMG sector; one could argue that RMG
industry is the sole credible player in the national economy. The sustainability of this highly
valuable sector is therefore, of much concern. This study focuses on the vigilance of internal
control system and policy of companies in the RMG sector
An Overview of RMG in BD:
The ready-made garment (RMG) industry of Bangladesh started in the late 1970s and become
a prominent player in the economy within a short period of time (Haider, 2007). He also
found that Bangladesh needs to improve the factory working environment and various social
issues related to RMG sector. Delahanty (1999) found that average garment manufacturing
labor cost in Bangladesh is $0.16 per hour in 1993, while the corresponding figures for India
and China were $0.27 and 0.25 respectively in the same year. But the recent raise in RMG
minimum wage has created a concern for this sector, which calls for greater control over cost
minimization in the same sector as this was the driver behind the success of this industry.
Moreover, according to Paul-Majumdar (2001) rented factory premises, narrow staircases,
low roofs, closed environments, absence of lunch rooms, unavailability of clean drinking
water and no separate toilets or common rooms for female workers are other concerns in the
garment factories of Bangladesh. These shortcomings in the physical infrastructure threaten
the development of this sector. Thus, previous research has shown that companies in the
RMG industries need to address several shortcomings to maintain their position in the global
market and continue contributing to the national economy. Feng et al (2009) found a positive
association between internal control and management forecast accuracy. They also found a
positive relationship between management ability and implementation of strong internal
controls, suggesting that internal controls may be one way to address these shortcomings. The
concepts of corporate governance also heavily rely on the necessity of internal controls.
Internal controls help ensure that processes operate as designed and that risk responses (risk
treatments) in risk management are carried out. In addition, there needs to be in place
circumstances ensuring that the aforementioned procedures will be performed as intended:
right attitudes, integrity and competence, and monitoring by managers. Yet, previous studies
have not reviewed the internal control practices in the RMG sector, neither internationally nor
locally. While there are some studies on physical problems in the RMG sector, lack of
attention to the system practices and development calls for pioneering research in this area.

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1.3 Scope of the study
The report provides a brief idea about the Business Activities, Management System,
Organizational Structure, Internal audit & Control of Errors, Financial Performance as well as
financial position of the Export-Import RMG business of lantabur group in Bangladesh.
This report mainly focuses on the collection of funds from various Export order (sales
Contract) and Operation mechanism of these funds under investment processes.
The report highlighted the internal financial performance and over operational activities in
the sector of business and its impact overall economy of the country that means the report is
mainly concern with financial achievement of lantabur group as a RMG sectors business
The goal of this study is to obtain a concrete idea of the effectiveness of internal control
practices in the readymade garments sector in Bangladesh. The RMG sector contributes
considerably to the development of the national economy of Bangladesh. Majority of the
foreign export income comes from this sector, thus it has an enormous role on the economy.
The recent unrest in this sector suggests the need for purposeful evaluation of the
sustainability of this industry. The push for minimum wage increase and maintenance of a
safe working environment were the reasons for recent unrest. To avoid such problems and to
ensure the long lasting presence of this promising sector, the control system should be
strengthened. This study presents a picture of the present situation in this respect. This study
includes respondents from management only.
A future study including respondents from representatives of management, labor and
regulatory groups would discover if there is agreement between these stakeholders. No
relationship has been developed between the benefits derived from the internal control
practices and the costs involved. A cost benefit analysis could be done as well. Another
probable research area can be the relationship between organizational profitability and
effectiveness & efficiency of internal control in place in that organization to verify the
contribution of internal control to the profitability.
Focus on: After all, I would like to continue my reporting activities by the permission of
Honorable Managing Director (MD) as well as my respective superior Director (Audit).
Because, I believed that in togetherness with its customers (like Buyer), suppliers,
management, Bankers, as well as employees in its march on the road to growth & progress
with services of the company.

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1.4 Objective of the study:
1.4.1 General Objective:
The General Objective is to prepare & submit a report on the topic “Internal Audit &
Control Practice of Garments Manufacturing Company - A Study on Lantabur
Group”.
1.4.2 Specific Objective:
 To know the concept and overview of internal audit department of the company
 To know about Internal Audit & Control Practice in garments sector in Bangladesh
 To find the current scenario of internal audit & Control status of Lantabur Group.
 To know internal audit department activities and functions of the company
 To find the ways of improving the backward linkage of the internal audit & Control
status of Lantabur Group.
1.5 Methodology of the study
There are two types of sources for collecting data for this report such as-
 Primary sources
 Secondary sources
Primary sources
Primary sources of data collection from Lantabur Group are not available but I have tried to
collect information on internal control practices within the companies in the RMG sector, this
study used survey method. A questionnaire, consisting of various separate questions was
prepared. These questions were primarily close ended; additional questions captured
descriptive comments. With a view to getting an overview of the current situation of
garments sector in Bangladesh. The questions have been placed into five broad categories.
These are as follows:

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6
1. Management philosophy and operating style.
2. Organization structure.
3. Assignment of Authority and responsibility.
4. Human resource policies and practices.
5. Cost Benefit Analysis.
Under each category, there are separate question(s) for the respondents. Respondents are the
members of top management of the company’s. This company has been chosen on a
convenience basis.
But the secondary sources are:
 Various reporting data & printing materials of Lantabur Group.
 Periodicals Manual published by the BKMEA, BTMEA, BGMEA, BB & NBR etc.
 Different publications regarding Garments Business.
 Audited Report by the Audit firm like Khan-Ayub & Co.
 Browsing Internet.
 Different kinds of ICAB books
 www.lantaburbd.com.
 www.bangladesh-bank.org
Techniques used in this report:
 Financial performance analysis of this company by using liquidity ratio, operating
efficiency ratio and profitability ratio.
 Comparison of performance of Lantabur Group. With other different private garments
companies by using total export sales, production capacity, employment opportunity,
capital utilization, loans and advances, total assets volume and total import and export
business.
 Comparison of percentage of cost of production, price earnings ratio & return on
assets ratio, Asset turnover ratio & Inventory turnover ratio etc.

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1.6 Limitation of the study:
This internship tenure far doing the work on such an important topic is not really sufficient.
Moreover this is an individual work where only as individual person need to undertake the
whole process done alone but the time frame work did not permit me and my work done in
my job station as a scientific manner and also it is very difficult for me to make a
comprehensive qualitative survey within a stipulated time. In all respect some limitation and
weakness remain within which I failed to escape by any means. These are follows:
 To continue this report it requires a big deal in time. As an employee I have a very few
time to prepare this report, which is not enough
 It requires lot of assistance from all level officers and staffs but as a garments sector
business everyone are so busy in doing their respective duties.
 As an employee of Internal Auditor, it’s difficult to maintain report after completing daily
works & don’t have enough time to give the information elaborately.
 Its needs to proper support & guideline from respective superior to make this effective
report.
 In many cases the relevant authorities are not aware about internship report& they are
unwillingness to provide data due to confidentiality.
 It is too much difficult to comment and suggest based on only supplied by the internal
audit report.
 Web site of the organization wasn’t up to date to gather valuable information.
 Due to high employee turnover rate and lack of good reporting practices in the factory,
problems with collecting data have been faced.
 Lack of organizing chain of command
 Lack of instruction book, and any change. They are following traditional business.

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2.1. About Lantabur Group
2.2. Corporate Logo
2.3. Vision, Mission & Objectives
2.4. Different (Business Unit) of Lantabur Group
2.5. Nature of Business activities
2.6. Capital Structure of the Company
2.7. Major Customer (Buyer)
2.8. Major Products:
2.9. Various Departments of Lantabur Group
2.10. Various Sections for production:
2.11. Services of Lantabur Group
2.12. Design Studio of Lantabur Group
2.13. Members of the Board of Director and Management
2.14. Corporate Information at a glance:
2.15. Corporate Culture
2.16. Management of Lantabur Group
2.17. Human resource management of Lantabur Group
2.18. Performance Analysis of Lantabur Group
2.19. Company SWOT Analysis

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2.1 About Lantabur Group
Lantabur Group of Industries is country’s one of the leading 100% export oriented group of
companies pertaining to garments sector. Its present position is the outcome of long journey
in the arena of Garments business. Started ready-made garments export business through
establishment of a 100% export oriented knit garments industry and gradually captivated own
position in export market of Bangladesh. Afterwards able to establish a number of export
oriented large industries in garments sector and continued contribution in the development
process of country through earning of valuable foreign currency. Yearly turnover of the group
is now more than US$ 300.00 million. The group has generated employment opportunities
for 22,000 people in its 12 (Twelve) units/industries. Mohammad Salman, Managing Director
of Lantabur Group of Industries got experience in garments export business and other related
fields.
Formation of Libas Knitwear Limited: Libas Knitwear Limited is a private company
limited by shares incorporated on 13 August, 2007 in Bangladesh under the Companies Act,
1994. Its Registration # is C-68065(6/6)/07. The Registered Office of the Company is
situated at Flat # 158 (1st floor), Road # 01, DOHS Baridhara, Dhaka-1212. The
manufacturing plant of the Company is located at Kewa, Boherarchala, Gila Beraeed,
Sreepur, Gazipur, Bangladesh.
Formation of Taqwa Fabric Limited: Taqwa Fabrics Limited is a private company limited
by shares incorporated on 23 May 2007 in Bangladesh under the Companies Act 1994. Its
Registration # is C-66963(4455)/07. The Registered Office of the Company is situated at
House # 51/C Road # 13/B Sector- 3 Uttara Model Town Dhaka. The manufacturing plant of
the Company is located at Kewa, Boherarchala Gila Beraeed, Sreepur, Gazipur Bangladesh.
2.2. Corporate Logo
Bangladesh Export Import Company (Lantabur Group) maintains this logo from the initial
stage of its business. They have a mission of taking Bangladesh to the world. So, with this
logo of Lantabur Group has taken its identity towards the people of the world.

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2.3. Vision, Mission Goals & Objectives
Vision of the Company:
The gist of our vision is “Together towards Tomorrow”. It believes in togetherness with its
customers, in its march on the road to growth and progress with services. To achieve the
desired goal it should be vision of our group of companies, there will be pursuit of excellence
at all stage with a climate of continuous improvement its competitive edge of RMG industry.
Mission of the Company:
This report will be prepared in front of some mission statement of this company:
Provide quality service especially foreign trade.
Continue a contemporary technology based professional working environment
Maintain corporate & business ethics & transparency at all levels
Sound Capital Base
Ensure sustainable growth & establish full value to the honorable stakeholders
Fulfill its buyer commitment
Fulfill organizational & social commitment
To ensure job satisfaction at all level
Above all, to add positive contribution to the national economy
My point of view, all mission statement should be implemented by the management decision
because I believed that strength of a company depends on good strengths of the management
team.
Goals & Objectives of the Company:
 To strive hard to optimize profit through conducting of transparent business
operations within the legal & social framework with all in respect of gender disparity,
caste, creed or religion or region.
 To increase productivity.
 To create more jobs with minimum investments.
 To be competitive in the internal as well as external markets.
 To maximize export earning with minimum imported in-puts.
 To reduce the income gap between top & bottom categories of employees.
 To promote corporate social responsibilities (CSR) amongst all.

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2.4. Different Strategic Business Unit of Lantabur Group
 Libas Knitwear Ld.
 Taqwa Fabric Ltd.
 Lantabur Apparels (Mirpur)
 Lantabur Apparels (Dyeing Unit)
 Alanna Apparels Ltd.
 Taqwa Knitting Division
 Lantabur Trading Garments (LTG) Ltd.
 Lantabur Textile Ltd.
 Lantabur Homes Ltd.
 Uneek Clothing
 S. Blue Label
 Pacific Moon Trading
2.5. Nature of Business activities:
The principal activities of the Company shall be to carry on the business of Composite Knit
Textile & Garments Industry to produce Woven Fabrics and making of Clothing item for
Men, Women & Kids and export thereof.
2.6. Capital Structure of the Company:
The Authorized share Capital of in. Company is Tk. 47, 00, 00,000 (Taka Twenty Cores
only) divided into 47, 00,000 (Twenty Lac) ordinary share of Taka 100 each, with the right,
privileges and conditions attaching thereto as are provide by the regulations of the company
for the time being, with power to increase and reduce the capital of the Company and to
divide the shares in the capital for the time being into several classes and to attach thereto
respectively such preferment deferred, qualified or special rights regulations of the company.

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2.7. Major Customer (Buyer)

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2.8. Major Products:
a. Men's, (Polo Shirt, T-Shirt’s, Jacket’s, Hoodies etc)
b. Landis’s, (Polo Shirt, T-shirt’s,)
c. Moa Tank Top
d. Ladies Kart
e. Ladies Nighty
f. Children’s
g. Tops (formal & casual), Skirts, Jackets
h. Knitted tops & bottoms
2.9. Various Departments of Lantabur Group
Figure i: Organogram various department of Lantabur Group
HR & Administration Department
Maintenance Department
Marketing Department
Planning Department
Merchandising Department
Commercial Department
Accounts Department
Audit Department
Store Department
Production Department
DO Department
Research & Development Department

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2.10. Various Sections for production:
Figure ii: Organogram different production sections of Lantabur Group
Lantabur Group is a fully vertical unit from Yarn Spinning to Apparel Manufacturing,
Dyeing, Cutting, Printing, Washing, Embroidery, Sewing, Quality, Finishing & Packaging
and they have different sections for all of these.
2.11. Services of Lantabur Group
Service is related with the product delivery. Lantabur produces products for the clients of
outer Bangladesh. So, here Lantabur represents Bangladesh with their quality and
capabilities. The manufacturing part is very much related with these services. Here it includes
the marketing, planning, designing, procurement departments. These departments are the pre
procedure or, aligned with the procedures of operations. The direct manufacturing part does
not stand alone without the support of these departments.
Knitting Section
Dyeing Section
Cutting Section
Printing Section
Embroidery Section
Sewing Section
Quality Section
Finishing Section

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Speed to Market Opportunities
Supply chain model based on a relationship of trust and simple, short procedures
Marketing model based on affordable, quick change fashion.
Clear projection or commitment and firm booking of capacity.
Maximize design, product development capability of manufacturer, in collaborative
design process.
On-spot placement of order after reviewing of designs.
Focused product development. Higher adoption rate from collection.
Vertical facility enabling quick responses, which allow us to produce from Yarn to
Garment in fifty days and repeated orders in thirty days, leading to reduced
markdowns
2.12. Design Studio of Lantabur Group
To provide design and product development support from fiber to garments to leading
retailers and brands using integrated manufacturing resources, powerful CAD tools,
technology collaboration with major suppliers (like CIBA, DuPont etc.) and interface with
fashion forward customers, rapidly develop and bring trendy, innovative differentiated
products to our strategic partners every season. The Design Studio works to produce entire
collections with Indicted including women’s and men’s clothing, woven and knit tops, casual
and denim bottoms and jackets. They have now introduced a catalogue which will highlight
our concept of complete new looks, products and fabric swatches and we will be sending one
of these to all our key customers almost every eight weeks.

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``

Lantabur Group
17

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2.13. Members of the Board of Director and Management:
Board of Director
Mohammad Salman
Chairman & Managing Director
[Lantabur Group]
Khandker Mohammad Zobair
Vice Chairman
[Lantabur Group]
Maulana Ahmed Iqbal
Director (Production &
Operation)
[Lantabur Group]
Tasnim Saffana
Director
Maulana Abu Taher Mesbah
Director
Management Team
Mohammad Anis
Director (Logistics)
Md. Abu Baker Khan
Director, Audit
ATM Nazrul Islam
Director, Audit
Mohammad Arif-ur-Rahman
AGM, Adimin & Operation

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2.14. Corporate Information at a Glance
Registered Name : LANTABUR GROUP
Address of the Registered
Office :
Corporate Office:
House # 51/C, Road # 13/B, Sector-3
Uttara, Dhaka-1230, Bangladesh
Phone: +88-02-7913038-43, +88-0960650
Fax No: +88-02-8963905
Production Unit : 2. Factory & Head Office:
Lantabur Group (Taqwa Fabric Ltd,
Libas Knitwear Ltd, Lantabur Textile,
Lantabur Apparels, Allanna Apparels)
Kewa, Boherachala, Gila Beraeed,
Sreepur, Gazipur-1740, Bangladesh
Phone: 0088-09606500435.
: 2. Factory (Lantabur Apparels):
142 Senanibas Road, safuraKhatun Market,
8th
, 9th
& 10th
Floor, Mirpur 12,
Dhaka, Bangladesh
E-mail: : info@lantaburbd.com
Web site : www.lantaburbd.com
Date of incorporation : 13th August 2007
Authorized Capital : Tk.47 Core
Paid up capital : Tk.20 Core
Total Export : $ 2,92,31,132.92
Total Import : $ 1,90,47,585.65
Total Investment : TK 2,04,08000.00
Total Liabilities : TK 107, 43,49,989.00
Number of Unit : 12
Total Number of Employee : 3601
Vice Chairman : KHANDKER MOHAMMAD ZOBAIR
Managing Director : MOHAMMAD SALMAN
Auditor : KHAN AYUB, FCA

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2.15. Corporate Culture
During the last two decades Corporate Culture has become an important theme in business as
an intangible concept which clearly plays a meaningful role in corporations, affecting
employees and organizational operations. It is not only determinant of business success or
failure; a positive culture can be a significant competitive advantage over organizations with
which a firm competes. We, as an amenable this company, believe if the employees identify
with the culture, the work environment tends to be more enjoyable, which boosts morale and
leads to increased levels of teamwork, sharing of information, and openness to new ideas at
all levels.
2.16. Management of Lantabur Group
Management is the process of planning, organizing, leading and controlling the work of
organization members and of using all available organizational resources to reach stated
organizational goals. The strength of a company depends of the strength of its management
team. Lantabur Group is proud to have a team of highly motivated, well-educated and
experienced executives who have been contributing substantially to the continued progress of
the company.
2.17. Human resource management of Lantabur Group
Hunan resource is the fundamental asset of the organization. Human resource approach is
concerned with the growth and development of people toward higher level of competency,
creativity and fulfillment. Therefore, human resources development has been given its due
importance in an environment that values performance, teamwork, fairness and integrity, it
has both qualitative and quantitative dimension. The organization believes that the
professional competence company personnel and its commitment for accomplishing assigned
responsibilities are a first line of defense to prevent irregularities. The objectives of Human
Resource management of Lantabur Group are as follows:
 Conducting job analysis
 Planning employee needs and recruiting job candidates
 Selecting of candidates
 Orienting and training new employees
 Managing wages and salaries (Compensating Employees) and benefits
 Appraising performance
 Communicating (interview, counseling, disciplining)
 Building employee commitment

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2.18. Performance Analysis of Lantabur Group:
Performance evaluation is an important pre-requisite for sustained growth and development
of any situation. It is customary in a company to evaluate the pre-determined goals and
objectives, with the changes goals and objectives, the criteria of revaluation have undergone
changes overtime. Regarding performance evaluation of the Garments Sector in Bangladesh
―Company Efficiency Model‖ has been taken into consideration.
Company Efficiency Model:
Company Efficiency Model (five efficiency test criteria) has been developed to measure the
efficiency of the company. These criteria are measures and expressed as follows:
1. Investment Opportunity Utilization Test
2. Profit Maximization Test
3. Project Efficacy Test
4. Loan Recovery Test
5. Test of Elasticity in Loan Financing
3.19. Company SWOT Analysis
SWOT Analysis means companies Qualitative performance Analysis, it must be considered
for evaluating company’s financial performance. SWOT Analysis means analyzing the
Strengths, Weaknesses, Opportunities and Threats of the organizations to know the
present conditions. This is very common analysis to determine the company’s capabilities of
doing effective business. SWOT Analysis of my own observations is:
Strengths:
1. Company has an interactive corporate culture; working environment is very friendly,
interactive and informal. There are no hidden barriers or boundaries while
communicate between the superior & the employees
2. Lantabur group ltd. has already establish a favorable reputation in RMG sector
industry of the country as well as abroad
3. It has the reputation of being the provider of good quality service to its potential buyer
like as H&M, C&A, MASCOT, INDOCHINE, PUMA, UNEEK, LIDL, BEST
CORPORATION, NEXT, PRENETAL etc.
4. Large scale of equity capital
5. Islamic based working environment

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Weaknesses:
1. Poor Services quality has the major problem of a company like spot lot order,
shipment not done within due time, unrest party payment, delay to disburse liability,
improper utilization of working capital etc.
2. The main important thing is that the company has no clear mission statement &
strategic plan as well as company have no long-term strategies
3. The company failed to provide a strong quality recruitment policy in the lower &
some mid-level position
4. In terms of market promotion, company has to follow aggressive marketing
campaign. It should be progressive, it’s should be wealth maximization not profit
maximization.
5. Management has limited power of decision making. Only head of Management take
almost all decisions
6. Networking system does not maintain within all department as well as between head
office and factory
Opportunities:
1. In a competitive environment lantabur group must expand its product line to enhance
its sustainable competitive advantage.
2. In order to reduce the business risk. Lantbur group has to expand their business
portfolio through various business project of a group
3. All buyer get the same services
4. Free lunch facility
5. Good working Environment ( Air conditioning & sound free room)
6. Separate department with individual corridor
7. Mobile & Transport Allowance facility
8. Well known communication system like (internet, intercom, office transport facility)
Threats:
1. The default risk of all terms loan, time loan, PC loan, BBLC liability, force loan have
to minimize in order to sustain in competitive market.
2. The low compensation package of the employees from mid level to lower level
position that threats to the employee motivations. As a result, good quality employees
leave the organizations and its effects the organizations as a whole.

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3. Because of competitive advantage buyer may switch to other companies
4. Because of political unrest company are bound to face unrest situation like Hartal,
Strike, firing attacked by the workers that’s why, company may looser
5. Because of worker unrest situation company may face unexpected digesters
6. To get high interest Loan
7. Less export, more investment as well as less profit.

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3.1. Concept of Auditing
3.2. Defined Auditing
3.3. Concept of Internal audit
3.4. Defined Internal Auditing
3.5. Defined Internal auditor
3.6. Why internal audits function
3.7. Internal Audits Activities
3.8. Internal Audit Process
3.9. Common Audit Findings
3.10. Concept of Internal Controls
3.11. Internal Controls Defined
3.12. An internal control system
3.13. Role in Internal Controls
3.14. Components of Internal Control
3.15. Internal Control Process Objectives
3.16. Audit evidence

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3.1. Concept of Auditing
During the 1960’s and 1970’s, audit professionals in many countries independently
developed theories of auditing that could be applied to examination of many different areas,
including financial statements. While practitioners may have differences of opinion as to the
application of certain of the underlying concepts, the basic framework is generally accepted
by auditors and the public. This framework has been codified in many countries around the
world and is often called Generally Accepted Auditing Standards (―GAAS‖).
3.2. Defined Auditing
Auditing is a systematic examination of books, accounts, documents and vouchers of an
organization to ascertain how far the financial statements present a true and fair view of the
concern. It also ensures that the books of accounts are properly maintained by the concern as
required by law.
Auditing is defined as a systematic and independent examination of data, statements, records,
operations and performances (financial or otherwise) of an enterprise for a stated purpose. In
any auditing the auditor perceives and recognizes the propositions before him/her for
examination, collects evidence, evaluates the same and on this basis formulates his/her
judgment which is communicated through his/her audit report
3.3. Concept of Internal audit
Internal auditing is an independent, objective assurance and consulting activity designed to
add value and improve an organization's operations. It helps an organization accomplish its
objectives by bringing a systematic, disciplined approach to evaluate and improve the
effectiveness of risk management, control, and governance processes. Professionals called
internal auditors are employed by organizations to perform the internal auditing activity.
"Develop and maintain a system of internal controls and internal audits comprising methods
and procedures to be adopted by each organization that will safeguard its assets, check the
accuracy and reliability of its accounting data, promote operational efficiency, and encourage
adherence to prescribed managerial policies for accounting and financial controls.‖

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3.4. Defined Internal Auditing
Internal audit is an independent appraisal or monitoring activity established within an
organization for the review of operations as a service to management. Internal auditors
examine, evaluate the planning, organizing, and reporting to management and the directors
on the adequacy and effectiveness of components of the accounting and internal control
system.
All systems, processes, operations, functions, and activities within an organization are subject
to evaluations by internal auditors.
a. Internal audit is generally a feature of large companies. It is a function, provided
either by employees of the company or sourced from an external organization to assist
management in achieving corporate objectives.
b. Internal audit exists to assist management in achieving corporate objectives and these
will vary from company to company, and will be found, for example, in company’s
mission statements and strategic plans.
c. In principle, all companies will want good management, and internal audit is
recognized way of ensuring good corporate governance.
3.5. Defined Internal auditor
An auditor who is an employee of the company whose records are audited and who provides
information to the management and board of directors.
Internal auditor is an employee of a company charged with providing independent and
objective evaluations of the company's financial and operational business activities, including
its corporate governance. Internal auditors also provide evaluations of operational efficiencies
and will usually report to the highest levels of management on how to improve the overall
structure and practices of the company.
3.6. Why internal audits function
An internal audit function aids management by improving the quality of the control
environment. These internal auditing policies should provide company’s directors, internal
control officers, internal auditors, and other organizational staff with a background and
approach toward the establishment, as appropriate, of an effective internal audit function.

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3.7. Internal Audits Activities
The Internal Audit Department performs a wide range of audit services to the company
including: financial audits, compliance audits, operational audits, information technology
audits, consulting/advisory services, and special investigations. Should you have any
questions or concerns regarding specific policies and procedures employed by your
department, we encourage you to contact us.
 Financial Audits A financial audit evaluates the accuracy and correctness of
accounting transactions and reports. The purpose of this type of audit is to verify that
the financial activity of a unit is accurately reflected in financial reports and that
accounting records and financial documentation support the financial reports.
 Compliance Audits determine the degree of adherence to laws, regulations, policies,
and procedures of the company, the garments industry in Bangladesh, the Federal
government of Bangladesh, and other regulatory agencies such as the BGMEA,
BKMEA, BTMEA, and NBR etc.
 Operational Audits review the use of resources and procedures / practices in the
department being audited to determine if goals and objectives are being met in the
most effective and efficient manner. A key component of operational audits is to
assess the internal control environment of the unit to manage and mitigate inherent
risks.
 Information Technology Audits evaluate system processing controls, data security,
physical security, systems development procedures, contingency planning, and
systems requirements.
 Procurement Audits are designed to evaluate independence, objectivity and fairness
of Department procurements.
 Consulting and Advisory Services are requested by management and encompass a
wide range of activities. Internal Audits can provide management with in-house
consultation and advice on internal control procedures, accounting systems, and issues
pertaining to employee improprieties. We are also available to consult on new system
implementations, process and system redesign initiatives, and policy changes.
 Special Investigations are performed in response to allegations received by our
corporate office through the company's hotline or other internal and external sources.
Allegations are prioritized and investigated based on an assessment of potential risk to
the company.

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3.8. Internal Audit Process
The most successful audit projects are those in which the audit client, and Internal Audit have
a constructive working relationship. Our objective is to have your continued involvement at
every stage, so you understand what we are doing and why, while trying to minimize
disruptions of your daily activities.
A typical audit is comprised of four stages: planning, fieldwork, reporting, and follow-up.
Planning
During the planning phase, we notify you of the audit through an announcement letter. An
auditor will contact you to set up an audit planning meeting. The purpose of the meeting is to
discuss the audit process and review the scope and objectives of the audit, discuss any
concerns or suggested scope items, and discuss risks inherent to the business unit.
Fieldwork
In this phase the auditor gathers relevant information about the unit in order to obtain a
general overview of operations and internal controls and performs transaction testing. It is
during this phase that the auditor determines whether the controls identified during the
preliminary review are operating properly and in the manner described by the client. These
procedures usually test the major internal controls and the accuracy and propriety of the
transactions.

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As the fieldwork progresses, the auditor will discuss any significant findings with our audit
director. Hopefully, the audit director can offer insights and work with the auditor to
determine the best method of resolving the finding. Upon completion of the fieldwork, the
lead auditor will summarize the audit findings, conclusions, and recommendations and
review them with our audit purpose.
Reporting
Our principal product is the final report in which we express our opinions, present the audit
findings, and discuss recommendations for improvements. After the fieldwork is completed,
Internal Audit will meet with the management to discuss the findings, conclusions, and
recommendations. The auditor prepares a draft report, taking into account any revisions
resulting from the closing meeting and other discussions. The report consists of several
sections and includes: the distribution list, scope and objects, overall assessment, and our
findings and recommendations. We issue the draft report to management only, along with a
management memorandum detailing any less significant findings.
We request that management provide written responses to the draft report comments,
indicating how and when the recommendations will be implemented. Once the management
responses have been received, Internal Audit incorporates the responses into the draft report,
creating the final report. The final report is distributed to the reporting supervisor and other
appropriate members of the company's senior management. This report is primarily for
internal organization’s management use. All audit information should be treated as
confidential and is reported only to those within the company who need to know.
Finally, as part of Internal Audit's self-evaluation program, we ask clients to comment on
Internal Audit's performance. This feedback has proven to be very beneficial to us, and we
have made changes in our procedures as a result of clients' suggestions.
Audit Follow-Up
After approximately six months of the final report issuance, Internal Audit will perform a
follow-up review to verify the recommendations included in the final report have been
implemented.

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3.9. Common Audit Findings
Findings usually identify a problem related to non-compliance with company policies and
procedures, governmental regulations, operating efficiencies or an improvement from an
overall business perspective. Common audit findings include:
Improper
Segregation of
Duties
Segregation of duties is a type of internal control created to prevent or
reduce the occurrence of omissive errors or fraud. No single employee
should have complete control over all components of a transaction.
This concept can be broken down into four categories: authorization,
custody, record keeping and reconciliation. A separate individual
should be in charge of each aspect of this process, eliminating
exclusive control over the asset.
Inadequate Review
of Procurement
Department
Procurement department are issued as an effort to reduce costs on large
volumes of purchases, reduce delivery time and eliminate order forms.
This policy prohibits the purchase of certain items such as alcohol,
weapons, hazardous materials, poor quality goods, false purchase,
unlawful purchase etc. It is essential that receipts are reconciled to
statements on a monthly basis by the procurement department.
Inadequate Cash
Controls
Because cash is a very liquid asset, strong controls are critical. Cash
should never be left unsecured, and only certain qualified individuals
should be granted access to registers, safes and cash boxes. Cash-on-
hand should be deposited on a daily basis when receipts exceed Tk
20000 or otherwise weekly.
Unallowable
Expenditures
As per Office Circular outlines, expenses that are allowable and
unallowable using funds from federal grants and contracts. Each
expenditure must be reasonable, allowable, allocable, and consistently
accounted for.
Untimely Cost
Transfer for
Sponsored Projects
Under company policy, cost transfers must be processed within ninety
days from the date of expenditure. If unallowable expenses exist, they
must be removed from the sponsored project regardless of
untimeliness.
Inadequate Security
of Electronic
Sensitive Data
Proper internal controls must be in place to safeguard all personally
identifiable data. Unnecessary sensitive data should be properly
destroyed regularly.

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3.10. Concept of Internal Controls
A system of internal control consists of policies and procedures designed to provide
management with reasonable assurance that the organization achieves its objectives and
goals. These policies and procedures are often called controls, and collectively they comprise
an organization’s internal control. Traditionally referred to as ―hard controls,‖ these include
segregation of duties, limiting access to cash, management review and approval, and
reconciliations. Other types of internal controls include ―soft‖ controls such as management
―tone at the top,‖ performance evaluations, training programs, and maintaining established
policies, procedures, and standards of conduct.
3.11. Internal Controls Defined
Internal controls are broadly defined as processes, affected by the board of trustees,
management and other personnel, designed to provide reasonable assurance regarding the
achievement of objectives in the following categories:
1. Reliability and integrity of financial and operational information of the company.
2. Effectiveness and efficiency of operations and programs.
3. Safeguarding of assets.
4. Compliance with laws, regulations, policies, procedures, and contracts.
Internal Audit assists the company in maintaining effective controls by evaluating their
effectiveness and efficiency and by promoting continuous improvement as part our internal
3.12. An internal control system
An internal control system encompasses the policies, procedures, processes, tasks,
behaviors and other aspects of an organization that, taken together:
 facilitate effective and efficient operations by enabling the organization to respond to
its significant risks;
 assist in ensuring the quality of internal and external information and reporting;
 assist in compliance with applicable laws, regulations and internal policies and
procedures; and
 Provide management with the capability to monitor and assess the level of compliance
with organizational internal controls.

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3.13. Role in Internal Controls
1. Establish the ―tone at the top‖ and promote an ethical business environment by
providing structure, feedback, and discipline.
2. Assess risks specific to our operations and develop a control system to address risks
that could prevent achieving established goals.
3. Establish and maintain control activities such as reconciliations, approvals, and
review of operating activities.
4. Ensure appropriate access to and use of company information and systems.
5. Monitor control system and activities to identify and correct breakdowns timely.
3.14. Components of Internal Control
Types of Internal Controls:
 Detective controls are designed to detect errors or irregularities that may have
occurred.
 Corrective controls are designed to correct errors or irregularities that have
been detected.
 Preventive controls are designed to keep errors or irregularities from occurring
in the first place.
Types of Control Activities:
 Approvals
 Authorizations
 Verifications
 Reconciliations
 Review of operating performance
 Security of assets
3.15. Internal Control Process
A well-designed process with appropriate internal controls should meet most if not all of the
system’s control objectives. A system of internal control can be evaluated by assessing its
ability to achieve seven commonly accepted control objectives:
 Authorization: All transactions are pre-approved by responsible personnel.
 Completeness: All valid transactions are included in the accounting records.
 Accuracy: All valid transactions are accurate, consistent with the originating
transaction data, and information is recorded in a timely manner.

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 Validity: All recorded transactions fairly represent the economic events that actually
occurred, are lawful in nature, and have been executed in accordance with
management’s general authorization.
 Physical Safeguards and Security: Access to physical assets and information systems
are controlled and properly restricted to authorized personnel.
 Error Handling: Errors detected at any stage of processing receive prompt corrective
action and are reported to the appropriate level of management.
 Segregation of Duties: Duties are assigned to individuals in a manner that ensures
that no one individual can control both the recording function and the procedures
relative to processing a transaction.
3.16. Audit evidence:
Audit evidence consists of the documents you use during an audit to substantiate your audit
opinion. While working on an audit, you encounter many different types of evidence (written,
oral, and so on). Documents can be prepared by employees of the client or by outside parties.
To properly evaluate the strength of evidence you gather, you have to understand the four
concepts of evidence:
 Nature: The form of the evidence — for example, oral, visual, or written.
 Appropriateness: The quality, relevancy, and reliability of the evidence.
 Sufficiency: The quantity of audit evidence — enough evidence to evaluate the audit
client’s management assertions.
 Evaluation: A decision on whether the evidence is compelling enough to allow you
to form an opinion.

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4.1. About Internal Audit Department
4.2. Internal Audit & control practice of Lantabur group
4.3. Organogram of Internal Audit Department at Lantabur Group
4.4. As an Employee My Duties and Responsibilities
4.5. Format of Daily Work Report
4.5. Promise to company

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4.1. About Internal Audit Department
The Internal Audit Department was created as part the work being conducted within the
Company to improve internal controls and audit, on the basis of the resolution adopted by the
Board of Directors of the issuer on 23.06.2011, by merging the Control and audit division
(created on 31.05.1999), the Internal audit division (created on 31.05.2007) and creating a
New Internal audit methodology division.
The main goals of the Internal Audit Department are:
 Assessing the effectiveness of the Company’s internal control system at the corporate
level and the level of business-processes;
 Controlling the effectiveness of investment projects being implemented by the
Company;
 Conducting audits of business activities of the Company, its subsidiaries and
affiliates;
 Assessing the effectiveness of risk management and developing recommendations on
how to improve the risk management processes;
 Assessing the effectiveness of the management processes in the Company and
subsidiaries (affiliates) and developing recommendations on how to improve them.
The main functions of the Internal Audit Department are:
 Interacting with the Company’s governance bodies, the Internal Audit commission
and the Company’s external auditors, Internal audit commissions (auditors) and the
auditors of the Company’s subsidiaries (affiliates);
 Submitting reports to the Board of Directors’ Audit Committee on the Department’s
performance with the deadlines established by the Committee’s work plan;
 Assessing the effectiveness of the risk management system and developing
recommendations on how to improve the risk management processes;
 Assessing the effectiveness of the internal control system at the corporate level and
the level of business processes and consulting the Company’s management on the
matters concerning its effectiveness.

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3.17. Internal Audit and control practice of lantabur group
The lantabur Group is a product and service oriented organization. Here internal audit &
control practice is necessary not only for checking and verifying internal documents of the
company but also necessary for managerial planning and control. It is also necessary for
compliance with legal requirements to fulfill the audit objectives. The company follows the
Generally Accepted Auditing Standards (―GAAS‖) and Institute of chartered Accountant of
Bangladesh (ICAB) Rules and policies.
4.2. Organogram of Internal Audit Department at Lantabur Group
Figure iii: Organogram internal audit department of Lantabur Group

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4.3. As An Employee My Duties and Responsibilities
It was clearly mentioned in my joining letter that I supposed to regular attendance at
corporate office (House #51|C, Road # 13/8, Sector# 03, Uttara, Dhaka-1230) and report to
Director (Audit) for my responsibility & assignment where I would be depend to work on my
Department. As an employee I was supposed to perform the following works:
4.3.1. The Daily Routine
I have worked in the Audit Department of Lantbur Group. I have worked there 6 days in a
week. My office hour is 9 am to 7 pm. But sometime I had to stay more than working hour
for work. At the beginning of my employment they tell me about my duties and then they
introduce me about the whole system of audit department of Lantabur Group. They give me
primary data about the functions of the audit department and correspondence duties with
other department of the company. My job is to communicate with the whole business units of
the group of company and send e-mail as an employee of the organization. Sometimes I have
used to note down the problem when I get findings as well as I report to the management with
recommendation for solving and controlling this problem.
4.3.2. Specific Duties / Responsibilities:
A) To monitor, BBLC documents, PI Statements, Export LC documents, C&F
documents on the basis of Buyer sales contracts.
B) Checking of books records like: Cash Book, Ledgers, Subsidiary ledgers & store In &
Out register, challan, MRR, stock ledger, Gate pass, physical stock
C) Examine inventories and follow up production process, raw material consumptions.
D) Checking and verification of all Bills, Vouchers, petty cash and others.
E) Checking Salary sheet, Bonus sheet & personnel records & compliance with tax laws.
F) Factory and warehouse visit and report on all transactions.
G) Collect analyze data to detect deficient controls, duplicated effort, over-spending,
fraud, or non-compliance with laws, regulations, and management policies.
H) Market verification for different MPR for rate justification.
I) Fixed Assets verification.
J) Execute any other assignment, assigned by the top management time to time.
K) To maintain internal control of errors through cooperation with other departments.
L) To prepare draft of audit report.

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a. Accomplishment work
Since of this point, I have maintain office working time, posting and checking lots of bills &
vouchers, & other documents, maintaining work order as buyer wise, monitoring L/C
document, assist to correct unwilling mistakes and dealing with various out party’s bills as a
thinking of my responsibility.
b. Special audit on physical verification of Stock
This audit has conducted at the direction of Director (Audit) to review the stocks of
Accessories, yarns, Grey Fabrics, Finished Fabrics, stock of Work-in Process and Finished
Goods physically.
c. Conducted work
Work has done by the audit team to meet the different store manager for trying to find gaping
between management thinking with physical stock. Finally, we have some problem and
prepared for this report.
d. Single special Meeting
Besides this, we are individual meeting with various departments for taking appropriate result
of our audit purpose.
e. Visited area
With Accessories stores we also visit Knitting, Dyeing, Embroidery, Yarn, Gray and Finish
Fabrics Stores.
f. Sharing corporate Thinking
We are already share with various formats about maintaining accessories items and running
store smoothly as a demand of management.
4.4. Format of Daily Work Report

Lantabur Group
39
Daily Work Report
By
Audit Department
Reporting Date: 25/01/2015
Reported by: Talukder Abdulla-Al-Mamun,
Executive, Audit
Lantabur Group
Reported by: Md. Abu Bakar Khan
Director (Audit)
Lantabur Group
Re: Today work report and observation.
Items checked/
Description of works.
Irregularities found
if any irregularities
or mention okay.
Steps taken for
regularization or
fulfillment as per
your requirement.
Remarks if
any
Daily Expenses:
Voucher:
Suppliers Bills:
Documents Against L/C:
Approval for Opening
BTB L/C:
Out of Audit Work:
4.5. Promise to company
I have done all the works to take the directions of our honorable Managing Director and
respecting superior, Directors (Audit) very sincerely and efficiently. I would like to give my
best effort as a demand of management to achieve the corporate goal and objectives.

Lantabur Group
40

Lantabur Group
41
5.1 . Summary of Audit Findings
We have support to our renowned organization on behalf of Audit Department at Lantabur
Group; have done our regular working activities very sincerely & efficiently.
By this time of work, we have found lots of findings which are following:
5.1.1. Positive Findings:
1. Lantabur Group has established its loyal employees. Among each and every employee
have more loyal punctuality with better relationship.
2. Management always full and free support to the audit department to audit works
smoothly.
3. Especially Audit Department is well-decorated and good working environment of the
company.
4. Audit department is established by effective and efficient manpower. So there is a
good opportunities to build up a suitable and better career.
5. Respectful job. Every person in bottom of their heart to assists us for controlling all
types of detects mistakes or errors.
6. As an auditor have right to access any door of the company as a demand of audit
purpose.
There have no hidden barrier between internal auditor and employer of the company. The
owners of the company want to survive the competitive market and to do business in long-run
and internal auditor helps to management to achieve the company’s goals and objectives.

Lantabur Group
42
5.1.2. Negative Findings:
1. Work order problem:
a) Work order have not found with most of the bill;
b) Although work order is given in some cases but not found rate, signature
and date.
c) Work order is sending to the party for Orders of Taqwa and Libas together.
d) Do not submit work order to the audit department for bill checking, every
types of work order are collecting from concern persons over phone after
submitting party’s bill.
e) Work order is sending to the supplier without name of concerning
merchandiser
f) Overwriting work order.
g) Work order rate is not matched with billing rate.
h) Work order has given without approved signature.
2. Tax is not deducting at source from all parties as per Rules of IT Ordinance-1984.
3. VAT is not deducting at source at the time of making payment.
4. Cash payment is doing by the company which is prohibited more than Tk. 50,000 by
ITO-1984.
5. Money receipts are not found from all parties.
6. Photocopy bill and challan is attached in the vouchers and also submit improper
supporting for bill checking.
7. Still now, supplier submit incomplete & inconsistency bill to the audit department
(concerning person did not appear such inconsistency, that’s why, we kill lots of time
of that bills)
8. Supplier supplied excess qty. but did not clear mention in any challan or any
documents in which we face lots of problem when suppliers submit excess qty. bill
9. Store given to Receive signature all challan of supplier’s that’s why party submits
double challan.
10. Some Receipts of Receiptable amount are not all remain in the vouchers of C & F
Expenses.
11. All Vouchers are not posting in the respective job wise.
12. Yarn store can’t provide clear received & delivery report due to ineffective software
systems.

Lantabur Group
43
13. Overwriting and fluid vouchers are getting in some of the cases.
14. Expense memo is not being clear description all time.
15. Not follow the purchase rule in timing of emergency (In such case, we purchase
goods at higher rate)
16. Even though it is not possible for the organization to pay the workers on schedule all
the time due to various reasons such as cancellation of shipment due to political
strikes or some technical errors, the workers do not want to leave the organization.
17. No evidence was found that the management process requires that audit findings are
summarized and reviewed at the corporate level, and that lesson learned and resulting
changes are communicated in the regions and taken in consideration for training.
Audit management systems have not been successful because of funding constraints:
1) Do not have sufficient manpower for audit department (For Corporate Office, Factory
Office as well as Mirpur Office)
2) Do not have sufficient power for implementing audit demand.
3) Do not fulfill sufficient format for posting voucher.
4) Lack of proper cooperation & coordination for implementing regular activities.
5) Want of sufficient information for taking Corrective Action Planned (CAP).
6) Do not have sufficient power for Implementing Corrective Action Planned (CAP).

Lantabur Group
44

Lantabur Group
45
RECOMMENDATIONS
We think that internal audit activity represents a significant investment of company’s
resources that tracks progress and records action taken in response to audit recommendations
reflecting better practices. We would like to give our best effort as a demand of management
to achieve the corporate goal and objectives effectively. We would like to offer some
recommendations to improve the performance of Lantabur Group regarding Internal Audit
activities.
1. Voucher should be posted as per proper head wise and respective job wise.
2. Overwriting and unclear voucher should be avoided fully
3. Cash payment will be done by the company Cheque which is more than Tk. 50,000 as
per Rules ITO-1984
4. Tax will be deducting at source from all parties as per Rules of IT Ordinance-1984.
5. VAT will be deducting at source at the time of making payment.
6. Work order must be issued favoring supplier in case of any purchase and unit price of
the items must be approved by the higher authority of the company (like Managing
Director or Director).
7. Main copy of bill & challan must be submitted to the audit department as per delivery
challan and order wise and Photocopy bill and challan should not be received from
suppliers.
8. Monthly Periodical Stock report must be submitted to the audit department for
checking.
9. Quarterly Accounts as well as Monthly Accounts must be provided to the audit
department for verifying the financial position of the company.
10. Before submitting Half-Yearly Accounts to the Bangladesh Bank; it must be checked
by the Internal as well as External auditor of the company.
11. Required have sufficient manpower for audit department (For Corporate Office as
well as Factory Office) in audit activities smoothly.
12. Implemented software should be developed as standard based in which all department
keeps their update records by using this software and company reach their targets

Lantabur Group
46
CONCLUSION
The goal of this study is to obtain a concrete idea of the effectiveness of internal audit and
control practices in the readymade garments sector in Bangladesh. The RMG sector
contributes considerably to the development of the national economy of Bangladesh.
Majority of the foreign export income comes from this sector, thus it has an enormous role on
the economy. The recent unrest in this sector suggests the need for purposeful evaluation of
the sustainability of this industry. The push for minimum wage increase and maintenance of a
safe working environment were the reasons for recent unrest. To avoid such problems and to
ensure the long lasting presence of this promising sector, the control system should be
strengthened. This study presents a picture of the present situation in this respect. The
responses to the eighteen questions asked to the respondents suggest that some improvements
need to be made. However, majority of the organization do have control systems in place.
Less than fifty percent of the respondents reported that –1. The institution is actually not
maintaining conservatism while choosing from alternative accounting policies, 2. There is no
proper separation program for employees who leave the firm and 3. Employees are not
bonded who have access to cash and negotiable instruments.
This study includes respondents from management only. A future study including
respondents from representatives of management, labor and regulatory groups would
discover if there is agreement between these Stakeholders. No relationship has been
developed between the benefits derived from the internal audit and control practices and the
costs involved. A cost benefit analysis could be done as well. Another probable research area
can be the relationship between organizational profitability and effectiveness & efficiency of
internal control in place in that organization to verify the contribution of internal control to
the profitability

Lantabur Group
47
BIBLIOGRAPHY
A. Books:
 Study Mannual-Assurance, The Institute of Chartered Accountants in England and
Wailes, March, 2009
 BAS (Bangladesh Accounting Standards) phase 1-37.
 BFRS (Bangladesh Financial Reporting Standard)
 Abdel-khalik, A., Snowball, S., & Wragge, J. (1983). The Effects of Certain Internal
Audit Variables on the Planning of External Audit Programs. The Accounting
Review, LVIII (2), 215-227.
 Ramos, M. (2003). SAS No.99 introduces a new era in auditors’ requirements.
Auditors’ Responsibility for Fraud Detection. Journal of Accountancy, 195(1), 28-35.
 Kizirian,T., Mayhew, B., & Sneathen, D. (2005). The Impact of Management Integrity
on Audit Planning and Evidence. Auditing: A Journal of Practice and Theory, 24(2),
49-67.
B. Journals:
 Company’s Annual Audited Report; (2011, 2012, 2013 and 2014) by the Audit firm
like Khan-Ayub & Co. Ershadullah Patwary & Co. and M. A. Motin & Co.
 Different documents Appraisal of Lantabur Group.
 Different publications regarding Garments Business by the BKMEA, BTMEA,
BGMEA, BB & NBR etc.
 Various written and verbal instructions of the company’s respective persons or
departments.
 Different types of Vouchers’ of Lantabur Group
C. Websites:
 www.lantaburbd.com/index.php/group-info
 www.icab.org.bd
 www.google.com
 http://www.bangladeshinfo.com
 http://www.bangladesh-bank.org

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