Internship Report on Accounting System of Wings Air Cargo Ltd
Subject: Organizational Behavior | Topics:


Accounting is concerned primarily with the measurement and communication of financial information to aid decisions and control in a variety of business and other organizations. Accounts are, therefore, at the heart of information systems- the fastest growing area of business activity.

This study content includes the nature of accounting, data processing and analysis and use of accounting information in the freight forwarding business.

In the backdrop of economic liberalization and transportation sector reforms, a group of successful entrepreneurs conceived an idea of floating a transportation of goods with different outlook. For them, it was competence, excellence and consistent delivery of reliable service with superior products.

Freight forwarding is a service used by companies that deal with international business. While the freight forwarders do not actually move the freight itself, it acts as an intermediary between the client and various transportation services. Sending products from one international destination to another can involve a multitude of carriers, requirements and legalities. A freight forwarding service handles the considerable logistics of this task for the client, relieving what would otherwise be a formidable burden.

Freight forwarding services guarantee that products will be reached to the proper destination by an agreed upon date, and in good condition. The freight forwarding service utilizes established relationships with carriers of all kinds, from air freighters and trucking companies, to rail freighters and ocean liners. Freight forwarding services negotiate the best possible price to move the product along the most economical route by working out various bids and choosing the one that best balances speed, cost and reliability.

A freight forwarding service generally provides one or more estimates to the clients along with advisement, when necessary. Considerations that effect price will range from origin and destination to special requirements, such as refrigeration or, for example, transport of potentially hazardous materials. Assuming the client accepts the forwarder’s bid, the freight is readied for shipping. The freight forwarding service then undertakes the responsibility of arranging the transport from point of origin to destination.

One of the many advantages of using freight forwarding service is that it handles ancillary services that are a part of the international business. Insurance, customs documentation and clearance are some examples. As a consolidator, a freight forwarding service might also provide Non-Vessel Operating Common Carrier (NVOCC) documentation, or bills of lading. Warehousing, and management, and methods of international payment are also commonly provided to the client by the freight forwarding service.

A good freight forwarding service can save the client’s untold time and potential headaches while providing reliable transportation of products at competitive rates. A freight forwarding service is an asset to almost any company dealing in international transportation of goods, and is especially helpful when in-house resources are not versed in international shipping procedures.

Accordingly, Wings Air Cargo Ltd (WAC) was created and commencement of business on 17th April, 1989. The Management personnel are reputed personalities in the field of trade and commerce and their stake ranges form garments to shipping as fully licensed International Freight Forwarder, a highly professional and dedicated team are managing the organization with long experience in the international freight forwarding by ocean & air and constantly focus on understanding and anticipating customer needs. As the international transportation & logistics services scenario undergoes changes so is the WAC and it repositions itself in the changed market condition. WAC has already made significant progress with a very short period of its existence and the company has been graded as a top class international freight forwarding in the country through internationally accepted various aspects. WAC has already occupied an enviable position among its competitors after achieving success in all areas of international freight forwarding by air & ocean service covering all segments of society within the frame work of international transportation company. Various international Acts, rules and regulations lay down, diversification of services include warehousing, air freight forwarding, ocean freight forwarding and custom house brooking right from manufacturer, importer & exporters.

WAC has consistently turned over good return on asset and capital. During the year 2007-08, the company has posted and operating profit of Tk. 27.61 million and its capital funds stood at Tk.119.54 million. Out of this, Tk. 5 million consists of paid of capital by share holders and Tk. 114.54 million represents reserves and retain earning. WAC’s current capital adequacy ration of 12.43% is in the market and much above the stipulated line of 8% (Annexure-A).  Since its beginning has attached more important in technology integration in order to retain competitive edge investment in technology is always a top agenda and under constant focus. Keeping the network within the reasonable limit, our strategy is to serve the customers through capacity building across multi delivery channels. Our past performance gives indication of our strength, we are better placed and poised to take our customers through fast changing times and enable them compete more effectively in the market they operate.

Objectives of the Study:

  To evaluate the performance of an international freight forwarding company named WINGS AIR CARGO LTD. (WAC).

  To make familiar with Accounting System of an International freight forwarding company.

  To highlight on the practical operations & services of WINGS AIR CARGO LTD. (WAC).

  To focus on the role played by an international freight forwarding company in the country’s economy.

  To submit an internship report on overall activities and accounting procedures of my current job.

Rationale of the Study:

As the business becomes very competitive and profitable, the common interests to the business communities have been augmented and result of it, the businessman are exposed to know about the business, it’s operation as well as accounting system. Moreover, entrepreneurs, business researchers and marketers are showing increasing interests for this business.

 Methodology of the Study:

The Study is based on both primary and secondary sources of Data. Data have been collected from office records, discussion with other department’s managers and annual report. For the report preparation, concepts, technologies and most of the relevant information’s and documents are gathered from the Finance & Accounts department of WINGS AIR CARGO LTD. (WAC).

 Limitations of the Study:

Like any other study the limitations of this study is not out of questions. The time constraint- is one of the main limitations of this study. As a finance manager, all the time I had to remain busy with my daily official activities. As a result, I have prepared this report within a shortest period of time. However, a worthwhile study requires the analysis of as much data as possible covering various aspects of the study. I had easy access to the various data, books of accounts and other documents of finance and accounts department but I had been requested by corporate finance officials not to disclose some confidential information regarding Finance & Accounts of WAC. Moreover, some other department managers were very much cautious and selective in providing information regarding various aspects of practical operation of freight forwarding business for the sake of confidentiality of business.

Conceptual framework of Accounting:

Conceptual framework -Coherent set of rules and standards for comparability and consistency. On the other hand, Conceptual frameworks are a type of intermediate theory that have the potential to connect to all aspects of inquiry (e.g., problem definition, purpose, literature review, methodology, data collection and analysis). Conceptual frameworks act like maps that give coherence to empirical inquiry. The frameworks are linked to particular research purposes (exploration, description, gauging, decision making and explanation/prediction). When purpose and framework are aligned other aspects of empirical research such as choice of methodology (survey, interviews, analysis of existing data, direct observation, focus groups etc) and type of statistical technique become obvious.

Conceptual framework of accounting “seeks to identify the nature, subject, purpose and broad content of general-purpose financial reporting and the qualitative characteristics that financial information should possess”. (Deegan, 2005, p.1184). Development of framework: not universally accepted nor static

Purpose of Conceptual framework of Accounting:

A. Define the boundaries of accounting by providing:

                                          1. The basic objectives and users

                                           2. Definitions of key terms

                                           3. Establish fundamental concepts

B. Assist the FASB in standard setting by providing a basis for developing new and revised standards.

C. Provide a description of current practice and a frame of reference for new issues.

D. Assist accountants and others in selecting between acceptable accounting alternatives.

Moreover, conceptual framework serves

–As an aid in developing more useful, consistent standards.

–As an aid in solving practical problems by reference to an existing framework of basic theory.

–In combination with good judgment, a sound body of theory will help accountants focus on logical and consistent solutions to accounting problems as they arise.

Components of the Conceptual framework:

FASB has issued (from 1976 on) 5 Statements of Financial Accounting Concepts (SFAC) for business enterprises. These are as follows:

SFAC No. 1. “Objectives of Financial Reporting by Business Enterprises” presents the goals and purposes of accounting.

SFAC No. 2. “Qualitative Characteristics of Accounting Information” examines the characteristics that make accounting information useful.

SFAC No. 6. “Elements of Financial Statements,” defines the broad classifications of items found in financial statements and replaces SFAC No. 3, expanding its scope to include not-for profit organizations.

SFAC No. 4. “Objectives of Financial Reporting for Non business Organizations” provides guidelines for not-for-profit and governmental entities.

SFAC No. 5. “Recognition and Measurement in Financial Statements of Business Enterprises” giving guidance on what information should be formally incorporated into financial statements and when. That is,

– Fundamental recognition criteria on what should be incorporated into the financial statements.

– Assumptions, principles and constraints

A. Defines the users of accounting information

          1. Present and potential investors and creditors

          2. Defines the user as the average prudent user with a reasonable

    understanding  of economic and business situations.

B. Defines the objectives of financial reporting.

1. To provide information that is useful in making rational investment, credit  

    and similar decisions

2. To help users assess the timing and uncertainty of cash flows.

3. To provide information on economic resources, claims and changes in


SFAC No. 2. “Qualitative Characteristics of Accounting Information”

Concepts Statement no. 2 identifies primary and secondary qualitative characteristics of accounting information that distinguish better (more useful) information from inferior (less useful) information for decision-making purposes.

  1. Primary Qualities

The primary qualities that make accounting information useful for decision making are relevance and reliability.

Relevance: Accounting information is relevant if it is capable of making a difference in a decision. For information to be relevant, it should have

  1. predictive or feedback value, i.e.; Helpful in making predictions about ultimate outcomes of past, present and future events: Predictive value.

 b.  it must be presented on a timely basis.

Reliability: Accounting information is reliable to the extent that it is verifiable, is a faithful representation and is reasonably free of error and bias. To be reliable, accounting information must include:

  1. Verifiability – The ability to arrive at the same conclusion, given the same information, by independent evaluators or users

 b. Representational faithfulness –Representational faithfulness is an important element of reliability in that it means the information represents what really existed or happened.

 c. Neutrality – Neutrality is the characteristic that the information presented is free from bias.  The information presented does not favor one party’s interests over another.

        2. Secondary Qualities

The secondary qualities identified are comparability and consistency.

Comparability: Accounting information that has been measured and reported in a similar manner for different enterprises is considered comparable. Information is more useful if it lends itself to comparison with similar information about another enterprise. Information is measured and reported in a similar manner for different enterprises This characteristic allows users to identify real differences between enterprises, not those due to non-comparable accounting methods. Thus, it allows for the allocation of resources to the areas of greatest benefit

Consistency : Accounting information is consistent when an entity applies the same accounting treatment to similar events from period to period. Accounting principles may be changed when it can be demonstrated the result would be preferable.

SFAC No. 6. “Elements of Financial Statements

Basic Elements

Assets: Probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events.

Liabilities: Probable future sacrifices of economic benefits that arise from present obligations of a particular entity to transfer assets or provide services to other entities in the future as a result of past transactions or events.

Equity: Residual interest in the assets of an entity that remains after deducting its liabilities. In a business enterprise, the equity is the ownership interest.

Investment by Owners:  Increases in net assets of a particular enterprise resulting from transfers to it from other entities of something of value to obtain or increase ownership interests (or equity) in it. Assets are most commonly received as investments by owners, but that which is received may include services or satisfaction or conversion of liabilities of the enterprise.

Distribution to Owners: Decreases in net assets of a particular enterprise that result from transferring assets, rendering services, or incurring liabilities by the enterprise to owners. Distributions to owners decrease ownership interests (or equity) in an enterprise.

Comprehensive Income: Change in equity (net assets) of an entity during a period from transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period, except those resulting from investments by owners and distributions to owners.

Revenues: Inflows or other enhancements of assets of an entity or settlement of its liabilities (or a combination of both) during a period from delivering or producing goods, rendering services, or other activities that constitute the entity’s ongoing major or central operations.

Expenses: Outflows or other using up of assets or incurrences of liabilities (or a combination of both) during a period from delivering or producing goods, rendering services, or carrying out other activities that constitute the entity’s ongoing major or central operations.

Gains: Increases in equity (net assets) from peripheral or incidental transactions of an entity and from all other transactions and other events and circumstances affecting the entity during a period except those that result from revenues or investments by owners.

Losses:  Decreases in equity (net assets) from peripheral or incidental transactions of an entity from all other transactions and other events and circumstances affecting the entity during a period except those that result from expenses or distributions to owners.

SFAC No. 5 “Recognition and Measurement in Financial Statements of Business Enterprises”

Basic Assumptions:

Economic Entity Assumption: The economic activities of an entity can be accumulated and reported in a manner that assumes the entity is separate and distinct from its owners or other business units.

 –The economic entity can be identified with a particular unit of


–The business is separate and distinct from its owners.  No commingling of

   assets and other financial elements.

–Departments or divisions of an entity may be considered separate entities.

–Accounting assumption not necessarily a legal one.

Going-Concern Assumption:  In the absence of contrary information, a business entity is assumed to remain in existence for an indeterminate period of time. The current relevance of the historical cost principle and accrual basis of Accounting are dependent on the going-concern assumption. According to this assumption, liquidation accounting is not followed unless indicated.

Monetary Unit Assumption:  Economic activities of an entity are measured and reported in terms of money which is assumed to remain relatively stable over the years in terms of purchasing power. In essence, this assumption disregards any inflation or deflation in the economy in which the entity operates.

Periodicity Assumption: The life of an economic entity can be divided into artificial time periods for the purpose of providing periodic reports on the economic activities of the entity. That’s why, adjusting entries must be done to bring books up to date at the end of the time period.

Basic Principles   

Historical Cost Principle: Acquisition cost is the most objective and verifiable basis upon which to account for assets and liabilities of a business enterprise. Cost has been found to be more definite and determinable than other suggested valuation methods applies to assets and liabilities. According to this assumption, once a transaction is recorded at its acquisition price it is subsequently not changed.  This is deemed to be more reliable than other valuation methods. Prepares and users find current fair value information to be useful as well.” Mixed attribute” system that permits the use of historical cost, fair value, lower of cost or market and other valuation bases.

Revenue Recognition Principle:  Revenue is recognized when the earning process is virtually complete and an exchange transaction has occurred. Generally, this takes place when a sale to another individual or independent entity has been confirmed. Confirmation is usually accomplished by a transfer of ownership in an exchange transaction. Revenue is recognized when it is realized (or realizable) and earned. Revenue normally recognized at time of sale, with exceptions.

•During production (for example, long-term construction).

•End of production, before sale takes place.  This might occur when there is an active market such as mining.

•Receipt of cash (for example, installment sales)

Matching Principle: Main theme of this assumption is Let expenses follow revenues” Accountants attempt to match (record) expenses to the revenues which they helped generate. Use of accrual accounting procedures assists the accountant in allocating revenues and expenses properly among the fiscal periods that compose the life of a business enterprise. However, there should be a logical, rational association of revenues and expenses.  Some expenses are matched to time periods alone. Where there is no logical basis for matching to periods benefited, expense in the current period. Both product and period costs must be appropriately matched.

Full Disclosure Principle:  It means not too little and not too much! In the preparation of financial statements, the accountant should include sufficient information to permit the knowledgeable reader to make an informed judgment about the financial condition of the enterprise in question.


Cost-Benefit Relationship: This constraint relates to the notion that the benefits to be derived from providing certain accounting information should exceed the costs of providing that information. The difficulty in cost-benefit analysis is that the costs and especially the benefits are not always evident or measurable.

Materiality: Relates to an item’s importance to a firm’s overall financial operations. In the application of basic accounting theory, an amount may be considered less important because of its size in comparison with revenues and expenses, assets and liabilities, or net income. Deciding when an amount is material in relation to other amounts is a matter of judgment and professional expertise. An item must make a difference to be material and be disclosed.

Industry Practices: Basic accounting theory may not apply with equal relevance to every industry that accounting must serve. The fair presentation of financial position and results of operations for a particular industry may require a departure from basic accounting theory because of the peculiar nature of an event or practice common only to that industry.

Conservatism: When in doubt, an accountant should choose a solution that will be least likely to overstate assets and income. The conservatism constraint should be applied only when doubt exists. An intentional understatement of assets or income is not acceptable accounting.

Accounting and Information System:

Accounting is the system used to provide useful financial information. Differently stated, Accounting is an Information system that identifies records and communicates the economic events of an organization to interested users. On the other hand, the system that collects and processes transaction data and disseminates financial information to interested parties is known as the Accounting Information System (AIS). It includes each of the steps in the accounting cycle .It also includes the documents that provide evidence of the transactions and events, and the records, trial balances and financial statements that result. An accounting information system (AIS) consists of:

=> People

=> Procedures

=> Data

                             => Software

=> Information technology infrastructure

Basically, an AIS collects and stores data about activities and transactions. It processes data into information that is useful for making decisions. It provides adequate controls to safeguard the organization’s assets

Efficient and effective Accounting information systems(AIS) are based on certain basic principles; like: cost effectiveness ,usefulness and flexibility. If the accounting information system is cost effective, provides useful output and has the flexibility to meet future needs, it can contribute to both individual and organizational goal. However, some phases are also involved in the development of an accounting system like; Planning and identifying information needs; Creating forms, documents, procedures and job descriptions; Implementing the system and making the system wholly operational and finally monitoring effectiveness  of the system. These phases represent the life cycle of an accounting system.

An Accounting Information System may be either manual or electronic (computerized). My organization has been using computerized Accounting system by using Accounting software named ACCPAC, a renowned accounting solution provider. Each of the steps in the Accounting Cycle of my organization is performed almost  automatically (by using  ACCPAC). It enters each accounting transaction automatically in the Journal; each is posted automatically to the ledger.  The Trial Balance and other Financial Statements are generated automatically. In a word, the entity generates all sort of information automatically.

 Financial Statements as a source of Accounting Information:

Many individuals and organizations use financial statements to improve business decisions. Investors and creditors use them to assess company prospects for investing and lending decisions. Boards of directors, as investor representatives, use them to monitor managers’ decisions and actions. Employees and unions use financial statements in labor negotiations. Suppliers use financial statements in setting credit terms. Investment advisors and information intermediaries use financial statements in making buy-sell recommendations and in credit rating. Investment bankers use financial statements in determining company value in an IPO, merger, or acquisition.

Financial statements help to analyze a company’s Strategic goals and its business environment. Financial statement analysis is an integral and important part of the broader field of business analysis. Business analysis is the process of evaluating a company’s economic ‘prospects and risks. This includes analyzing a company’s business environment, its Strategies, and its financial position and performance. Business analysis is useful in a wide rang of decisions such as whether to invest in equity or in debt securities, Whether to extend Credit  through short- or- long-term  loans, how to value a business in an initial public offering (IPO),and how to evaluate restructuring  including  mergers, acquisitions, and divestures. Financial statement analysis is the application of analytical tools and techniques to general-purpose financial Statements and inferences useful in business analysis. Financial statement analysis reduces reliance on hunches, guesses and intuition for business decisions. It decreases the uncertainty of business analysis.

Major Financial Statements:

  1. 1.    Income Statement
  2. 2.    Balance Sheet
  3. 3.    Statement of Shareholders’ Equity
  4. 4.    Statement of Cash Flows

Balance Sheet:

The accounting equation (also called the balance sheet identity) is the basis of the accounting system. One side of this equation relates to the resources controlled by a company, or assets. These resources are investments that are expected to generate future earnings through operating activities. To engage in operating activities, a company needs financing to fund them.

Another side of this equation identifies funding sources. Liabilities are funding from creditors and represent obligations of a company or, alternatively, claims of creditors on assets. Equity (or shareholders’ equity) is the total of (1) funding invested or contributed by owners (contributed capital) and (2) accumulated earnings in excess of distributions to owners (retained earnings) since inception of the company. From the owners’, or shareholders’ point of view, equity represents their claim on company assets.

A Balance sheet summarizes the financial position of a company at a point in time. Most companies report a classified balance sheet. In a classified balance sheet, assets and liabilities are separated into current and non-current amounts. An individual person can get some sorts of information regarding a company’s  overall activities and performance from a classified Balance sheet . That is, if a company is profitable both investing (assets) and  financing (equity) levels increase. Similarly, when a company is unprofitable, both investing and financing decline.

Income Statement :

An income statement measures a company’s financial performance between Balance Sheet dates. It is a representation of the operating activities of a company. The Income statement provides details of revenues, expenses, gains, and losses of a company for a time period. The bottom line, earnings (also called net income)indicates the profitability of the company. Earnings reflect the return to equity holders for the period under consideration, while the line items of the statement detail how earnings are determined.

The income statement includes several other indicators of profitability. Gross profit (also called grossmargin)is the difference between sales and cost of sales (also Called cost of goods sold).It indicates the extent to which a company is able to cover costs of its products.

Analyzing company profitability is a major part of financial statement analysis. All financial statements are pertinent to profitability analysis, but none is more important than the income statement. The income statement reports a company’s operating result over a period of time. Income statement plays an important role in determining company value, solvency and liquidity.

Income statement is critically important for all users but especially for equity investors and creditors. For equity investors, income is often the single most important determinant of changes in security values. Measuring and forecasting income are another most critical tasks of investors. For creditors ,income and operating cash flows are most common / and desirable sources of interest and principal repayments.

Earnings from operation refer to the difference between sales and all operating costs and expenses. Earnings before taxes, as the name implies, represents earnings from continuing operations before the provision for income tax. Earnings from continuing operation are the income from a company’s continuing business after interest and taxes. Earnings arc determined using the accrual basis of accounting. Under accrual accounting, revenues arc recognized when a company sells goods or renders services, independent of receiving cash. Similarly, expenses are matched to these recognized revenues, independent of paying cash.

Statement of shareholders’ equity:

The statement of Shareholders equity reports changes in the accounts that   make up equity. This statement is useful in identifying reasons for changes in equity- holders claim on the assets of a company.

Usually details of these changes are shown under five columns:

=> Common Stock,

=> Additional Paid-In Capital,

=> Retained Earnings,

=> Accumulated Other Comprehensive Income (Loss),


=> Treasury Stock.

Common Stock and Additional Paid. In Capital together represent Contributed Capital and are often collectively called share capital.

Statement of Cash Flows:

Earnings do not typically equal net cash flows, except over the life of a company. Since accrual accounting yields numbers different from cash flow accounting, and we know that cash flows are important in business decisions, there is a need for reporting on cash inflows an outflows. For example, analyses involving reconstruction and interpretation of business transactions often require the statement of cash flows. Also, certain valuation models use cash flows. The statement of cash flows reports cash inflows and outflows separately for a company’s Operating, Investing, and financing activities over a period of time.

Financial statements play an important role in the field of business analysis also. Business analysis is the evaluation of a company’s prospects and risks for the purpose of making business decisions. These business decisions extend to equity and debt valuation, credit risk assessment, earnings predictions, audit testing, compensation, negotiations and countless other decisions.

Business analysis aids in making informed decisions by helping structured the decision task through an evaluation of a company’s business environment, its strategies and financial position and performance.

To show how financial statement information helps in business analysis, let’s turn to the data in the following Table. These data reveal that X Company’s net earnings in 1998 were at their highest level for the past five years. This is despite a sales decline in the previous two years. X Company appears profitable-earnings in 1998 are 10 percent of sales, or 35 percent of shareholders’ equity. However, X Company’s increased profitability has come from cost reduction rather than from increased sales, which have actually declined in the most recent two years. This lack of sales growth does not bode well for the future. Still, X Company continues to pay a steady dividend to shareholders and, using its average 1998 price of $73.40, its stock trades at more than 17times earnings and 6 times book value of equity.

The financial statement information in Table-1 enhances our ability to assess X Company’s prospects and risks. Indeed, many investors use the ratio of a company’s stock Price to either its earnings or book value as a preliminary screening tool for investment analysis.

Table-1: X Company’s Summary Financial Data (In million except per share data)*


Sales—$ 13,406$ 14,538$ 15,968$ 14,980$13,557
Total assets14,73313,14514,43814,47714,968
Share holders equity3,9883,1614,7345,1214,017
Net earnings1.39051.2881.252557
Basic earnings per share4.300.013.823.67166
Book value per share12.359.7814.2714.8011.82
Dividend per share1.761.761.601.601.60
Average stock price73.4074.0575.0058.8548.60

Now, let us see how financial statements help in making various decisions:

Credit Decision:

Creditors lend funds to a company in return for a promise of repayment with interest. This type of financing is temporary since creditors expect repayment of their funds with interest. Creditors lend funds in many forms and for a variety of purposes.

Companies often obtain short-term credit from banks or through the sale of commercial paper. Long-term credit usually is obtained from financial institutions in the form of loans, from insurance companies in the form of bonds, or from private lenders in the form of notes. Companies also obtain long-term financing through public sale of their notes or bonds in securities markets. Leasing and conditional sales are additional forms of financing.

However, creditors bear the risk of default. This means a creditor’s interest and principal are jeopardized when a borrower encounters financial difficulties. This asymmetric relation of a creditors risk and return has a major impact on the creditor’s perspective, including the manner and objectives of credit analysis. Therefore, creditors are always interested to assess the creditworthiness of the borrower.

Creditworthiness is the ability of a company to honor its credit obligations. Stated differently, it is the ability of a company to pay its bill. Accordingly, the main focus of credit analysis is on risk, not profitability.

Credit analysis is performed in a variety of decision contexts. For example, a commercial Bank must do credit analysis when extending a new line of credit to a company. In this case, credit analysis helps determine whether the loan is granted and, if it is, how it is structured and priced. Banks also need to periodically analyze the creditworthiness of it’s borrowers, both to ensure the safety of loans granted and to process requests for additional loans.

To determine intrinsic value, an analyst must forecast a company’s earnings or cash flows as determine its risk. This is achieved through a comprehensive, in depth analysis of a company’s financial statements.

Managerial Control: Managers are individuals hired by a company’s owners to effectively and efficiently manage its business activities. Managers are interested in the financial conditions, profitability and prospect of a company because these factors bear on their own well-being and future earnings potentials. Financial statements can also provide managers with clues to strategic changes in operating, investing and financing activities. Managers also analyze financial statements of competing companies to evaluate a competitor’s profitability and risk. Managers also analyze financial statements before making restructuring and financing decisions.

Organization Profile:

Wings group’s scope of business is diversified and covers international freight forwarding, shipping Logistics & distribution, travel related service, Indenting and garments manufacturing.

Established in 1989 as an International Freight Forwarder, WINGS has gone into operation with an answer to the forwarding problems encountered by exporters & importers in meeting with their delivery schedules. The sponsor directors being already involved in the export trade were well aware of these facts and have been able to come up with a proper solution to these problems. This has enabled WINGS to be one of the leading companies in the field of international transportation in Bangladesh within a short period of operation.

In this tightly integrated present world market international transportation is a part of the bridge of the total supply chain of manufacturer, raw materials supply, exporter, carriers, forwarder, custom broker and ultimately the final decision maker. WINGS is a successful key player in this integration team.

WINGS, the total transportation and logistics management organization, address the challenges on a global scale with its expertise and partners around the world, on a real time basis. Becoming the essential part of exporter-importer chain, the company incorporates the mechanism to provide a high quality professional link-up for the mutual benefits. WINGS, through its global network and standard personalized services have developed and is implementing comprehensive international transportation logistics program.

Within a decade of its incorporation, WINGS is now leader in this industry in Bangladesh. The company is specialized in air & Ocean freight forwarding, Custom brokerage, road transportation, container movement and handling of heavy & dangerous goods.

The management believes that an active working environment to grow human resources can run the organization efficiently and effectively to bond long term customer relationships. With advantageous office & warehouse location, equipped with advanced and updated communication system and office automation, conditioned storage facilities, guide by a professionals with complete proficiency and talents WINGS certainly deserve to be a leader in this industry.

WINGS dynamic approach to business is well supported by the concerned authorities in Bangladesh. The objective of the company is to deliver reliable, cost effective transportation and information management. The enterprise’s strategy is based on customer satisfaction, shorter order cycle, and least logistics cost a comprehensive edge in logistics. The vision is to provide a one-stop service. 

WING’S Affiliations:

International Federation of Freight Forwarders Associations (IFFA)

International Air Transport Association  (IATA)

Associations of Cargo Agents of Bangladesh (ACAB)

 Dhaka Customs Agents Association (DCAA)

 Dhaka Chamber of Commerce & Industries (DCCI)

Bangladesh Air Cargo Market:

Members of Air Cargo Agents Association of Bangladesh are as follows:

 IATA Cargo Agents                                : 25

 Non IATA Cargo Agents              : 348

 No. of Export Processing Zones   :  08

 No. of existing Factories in Zone

    Dhaka  EPZ                           :  84

  Chittagong EPZ                     : 132

Our Major Partners:

Carriers uplifting Cargo


Shipping Lines Operating


 Air France

 Biman Bangladesh

 British Airways

 China Eastern Airlines

 Cargo Italia

 Dragon Air


 Etihad Airways


 Gulf Air

 Indian Airlines

 American Airlines


 Continental Airlines

 Garuda Indonesia

 Japan Airlines

 Kuwait Airways

Malaysia Airlines

 Pakistan Intl Airlines

 Qatar Airways

 Saudi Arabian Airlines

 Thai Airways

 Singapore Airlines


Korean Air

 Royal Jordanian

 KLM Royal Dutch

 Royal Brunei

 United Airlines








 China shipping


 DSR Senetor Lines


 Emirates line

 Hanjin Shipping

 Hapag Lloyd





 NYK Line



 SAF Marine

 Yang Ming Line

 Maersk Line

 Mitsui OSK Lines

 Wan Hai

 Zim Line






 Global Air Freight

Global Ocean Freight

Customs Brokerage   


 Free Zones & Distribution

Inland Trucking

3.5.1 Global

Air Freight

  Airport to Airport service

  Break bulk service

  Consolidation service

  GOH handling

  Door to Door delivery

  Sea/Air & Air/Sea services


  Freighter Handling

Global Ocean Freight

 NVOCC operation

 Import break bulk

 Door to Door delivery

 Transshipment and distribution

 Inland forwarding/transportation

 Project and heavy lift service

 Multi-Modal transportation

 Warehousing and Distribution:



Personal/Household effect storage

Pick up & delivery

4.1 Basis of Accounting

The accounts have been prepared on a going concern basis under Generally Accepted Accounting Principles (GAAP) on historical cost convention. The financial statements of the firm have been prepared in accordance with Bangladesh Accounting Standards (BAS). The elements included in the financial statements have been measured at historical cost convention.


2. Fixed Assets

An asset is recognized when it is probable that the future benefits will flow to the enterprise and the asset has a cost or value that can be measured reliably. An assets is not recognized when expenditure has been incurred for which it is considered improbable that economic benefits will flow to the enterprise beyond the current accounting period. These are capitalized at cost by acquisition at historical cost method. Fixed assets have been presented at the net of original cost and accumulated depreciation based on historical cost method.


3. Depreciation of office equipment

Depreciation on fixed assets as office equipment is charged on straight-line method.  The organization does not maintain residual value.


4. Revenue recognition

The entity sales services on advance, cash and credit basis. However revenue is recognized when goods have been delivered to customers. In case of advance, the amount is booked under advance account until the services are accomplished.

  1. 5.    Liabilities

Liability is recognized when it is probable that an outflow of resources will result from the settlement of a present obligation and the amount at which the settlement will take place can be measured reliably.

  1. 6.    Inventories

Inventories represents, stock of selling products held for sale in the ordinary course of business with the company’s normal operating cycles. Stock items have been valued following the principle of  BAS-2 i.e. at FIFO. Cost includes the purchase consideration, government duties related to purchase etc.

  1. 7.    Group term insurance scheme

The Company operates unfunded Group Insurance scheme. Provision for Group Insurance is being made annually for the company’s employees.

8. Taxation

As a private limited organization, WINGS pay corporate tax to the government annually. But it deducts tax at source on behalf of NBR as a normal course of business from its employees.

9. Current Assets

Current Assets have been shown in the financial statement at their acquisition costs.

10. General

Figures appearing in the financial statements have been rounded off to the nearest taka.


4.2 Accounting System of WINGS AIR CARGO LTD. at a glance:

The Finance & Accounts department of Wings Air Cargo Ltd. is consists of seven personnel including two cashiers and five accounts staff.  The Head cashier is responsible for maintaining local receivables whereas the petty cashier is liable for maintaining office general expenses like, entertainment bill, conveyance bills and advance payments to employees. Everyday, they have to receive and pay cash and cheques as a result of normal course of our business.

Debit (DR) Vouchers are prepared   for all kind of cash payments and Credit (CR) Vouchers are prepared all sorts of   cash receipts. Then Vouchers are sent to the Corporate Division for auditing. After auditing by the internal auditor the Vouchers are posted to Accounts receivable module (AR module), Accounts Payable module (AP module) General Ledgers (GL) by using Accounting Software (ACCPAC).

We have been maintaining several accounts with some of our local and foreign banks to maintain our overseas and local transactions. At the end of every month we have to prepare Bank Reconciliation Statements and unadjusted bank transactions (bank charges, commissions) are adjusted through DR and CR vouchers.

Moreover, at the end of every month we prepare Journal Vouchers (JV) to adjust employee’s advances, depreciations, bad debts and  various provisions.   Journal Vouchers   are also used for adjusting our various overseas receipts and payments.     The whole accounting system is descried below:

 Preparing Debit Vouchers for cash & bank payments.

  Preparing credit Vouchers for cash & bank receipts.

  Preparing Journal Vouchers for various adjustments.

  Verifying the Vouchers.

  Posting them to different modules (AP, AR GLs) by using Accounting Software (ACCPAC)

  Any adjustment entries can be given at any time by making the system “UNPOSTED”

  Trial Balance is prepared automatically by the software.

 Financial statements are also prepared automatically by the software.

  Closing current year’s revenues & expenditures through closing entries.

  Post closing Trial Balance is produced automatically by the software.

  Passing Opening Journal.

Analyzing financial statements and preparing an overall report (Including explanation of performance, variances & recommendations) on overall business activities for corporate division.

Closing the books:

At the end of the accounting period, the accounts are made ready for the next period. This is called closing the books. In closing the books, it is necessary to distinguish between temporary and permanent accounts. Temporary or nominal accounts is related to a given accounting period. They include all income statement accounts and owner’s drawing. All temporary accounts are closed. In contrast, permanent or real accounts relate to one or more future accounting periods. They consist of all balance sheet accounts, including owner’s capital. Permanent accounts are not closed. Instead, their balances are carried forward into the next accounting period.


Preparing closing entries:

At the end of the accounting period, the temporary account balances are transferred to the permanent owner’s equity account, owner’s capital, through the preparation of closing entries.  Closing entries formally recognize in the ledger the transfer of net income (or net loss) and Director’s drawing to director’s capital. The results of these entries are shown in the owner’s equity statement. These entries also produce a zero balance in each temporary account. These accounts are then ready to accumulate data in the next accounting period separate from the date of prior periods Permanent account are not closed.

4.3 Books maintained in my Organization:


·        Cash book

  • Bank book
  • Bank Reconciliation Register,
  • House Air Way Bill (HAWB) Register Book
  • Master Air Way Bill (MAWB) Register Book
  • Debit Note and Credit Note Register
  • Airlines Sales Report Register
  • Overseas Invoice register
  • Local Invoice register

4.4 Types of Assets, classification of Assets, Valuation and Depreciation Policy:



Fixed assets are recorded at cost. Improvements, which significantly extend the useful life of fixed assets, are capitalized and maintenance and repairs are expensed. When fixed assets are retired or otherwise disposed-off the cost and accumulated depreciation are removed from the appropriate account and any gain or loss is included in current income.

Full year’s depreciation is charged in case of additions made during the first half of the year and half year depreciation is charged in case of addition made during the last half of the year and no depreciation is charged on asset in the year of disposal. Depreciation is charged on fixed assets on reducing balance method at the rate of 20% except on land developments on which no depreciation is charged.

How Assets are Valued

The assets of WINGS AIR CARGO LTD. are measured and reported on its balance sheet. In general, the assets of a company can be categorized into fixed assets, current assets, intangible assets and financial assets. There seem to be three basic principles that underlie how accountants measure asset value:

  • An Abiding Belief in Book Value as the Best Estimate of Value: Accounting estimates of asset value begin with the book value, and unless a substantial reason to do otherwise is given, the historical cost is viewed as the best estimate of the value of an asset.

  • A Distrust of Market or Estimated Value: When a current market value exists for an asset that is different from the book value, accounting convention seems to view this market value with suspicion. The market price of an asset is often viewed as both much too volatile and easily manipulated to be used as an estimate of value for an asset. This suspicion runs even deeper when values are estimated for an asset based upon expected future cash flows.

  • It is better to under estimate value than over estimate it: When there is more than one approach that can be used to value an asset, accounting convention seems to take the view that the more conservative (lower) estimate of value should be used rather than the less conservative (higher) estimate of value. Thus, when both market and book value are available for an asset, accounting rules often require using the lesser of the two numbers.

The principles governing the accounting measurement of each of these asset categories is provided below, together with key measurement issues.


Principles governing measurement

Measurement Issues

Fixed AssetsFixed assets refer to tangible assets with long lives. Generally accepted accounting principles require the valuation of fixed assets at historical costs, adjusted for any estimated loss in value from the aging of these assets. The loss in value is called depreciation.
  • The accounting depreciation of an asset follows mechanistic rules — straight line (where an equal amount is written off each year) or accelerated. It bears no resemblance to economic depreciation.
  • In the presence of inflation, the use of historical cost can result in significant under valuation of older fixed assets
  • The asset value has little or no relationship to the earning power of the asset.
Current AssetsCurrent assets refer to assets with short lives (generally less than a year). Included here are items like inventory of both Master airway bill and House airway bill, accounts receivable and cash.

The accounting convention is for accounts receivable to be recorded as the amount owed to the firm, based upon the billing at the time of the credit sale. Firms can set aside a portion of their income to cover expected bad debts, from credit sales, and accounts receivable will be reduced by this reserve.


  • The discretion given firms on valuing inventory and considering expected bad debts does give rise to game playing. During periods of inflation, for instance, switching from FIFO to LIFO will decrease reported earnings. If inventory changes are only made for reporting purposes, neither the true income of the firm nor its cash flows is

Depreciation Policy:

Depreciation on fixed assets like Office equipments is charged on straight-line method.  The organization does not maintain residual value.

4. 5    How Liabilities are Valued

The principles that underlie how accountants measure liabilities and equity are the following:

  • The first is a rigid categorization of financing into either debt or equity based upon the nature of the obligation created by the financing. For an obligation to be recognized as a liability, it must meet three requirements :-
  • It must be expected to lead to a future cash outflow or the loss of a future cash inflow at some specified or determinable date,
  • The firm cannot avoid the obligation, and
  • The transaction giving rise to the obligation has happened.

In keeping with the earlier principle of conservatism in estimating asset value, accountants recognize as liabilities only cash flow obligations that cannot be avoided. If an obligation is a residual obligation, accountants see the obligation as equity.

  • The second principle is that the value of both the liabilities and equity in a firm are better estimated using historical costs with accounting adjustments, rather than with expected future cash flows or market value. The process by which accountants measure the value of liabilities and equities is inextricably linked to how they value assets. Since assets are primarily valued at historical cost or book value, both debt and equity also get measured primarily at book value. In the section that follows, we will examine the accounting measurement of both liabilities and equity.

In the following table, we summarize how accountants measure liabilities and equity:


How it is measured

Measurement Issues

Current LiabilitiesCurrent liabilities refer to liabilities that will come due in the next year. It includes short term debt, accounts and salaries payable, as well as long term debt coming due in the next year. These amounts reflect the actual amounts due, and should be fairly close to market value.
  • In general, current liabilities should be recorded at values close to the true value.
Long Term DebtThis can include both long term bank debts. Accountants measure the value of long term debt by looking at the present value of payments due on the loan at the time of the borrowing, using the interest rate at the time of the borrowing. The present value is not recomputed, however, as interest rates change after the borrowing.
  • When interest rates increase after long term debt is issued, the debt reported on the books will be higher than the actual market value of the debt. The book value will be lower than market value if interest rates decrease after the debt is borrowed.
  • When debt is convertible, the debt is shown at book value. When it is converted, it is treated as equity.


 4.6 Nature of Revenue and recognition:


Sales of Master Air Way Bill ( MAWB) are recognized as operating revenue. Revenue is recognized when services are provided and an invoice is submitted to the client. Interest income is recognized on receipt basis. The two basic principles that govern how our accountants measure earnings seem to be the following:

  • The first is the principle of accrual accounting. In accrual based accounting the revenue from selling service is recognized in the period in which the service is performed (in whole or substantially). A corresponding effort is made on the expense side to match expenses to revenues.

Revenue recognition

  • The second is the categorization of expenses into operating, financing and capital expenses. Operating expenses are expenses that, at least in theory, provide benefits only for the current period; the cost of labor and materials expended to deliver services which are provided in the current period would be a good example. Financing expenses are expenses arising from the non-equity financing used to raise capital for the business; the most common example is interest expenses. Capital expenses are expenses that are expected to generate benefits over multiple periods; for instance, the cost of buying land and buildings are treated as capital expenses.

The income statement in where our accountants attempt to measure how profitable the company was during the financial period. In the following table, we summarize the key parts of our income statement, and some key measurement issues:


Accounting Principles

Issues in Measurement

RevenuesOnly revenues from services during the period should be included in revenues (i.e., not cash revenues). Thus, cash received from sales made in previous periods is not included in sales, and sales from the current period, even if not collected, is included.
  • In the case of contract work, or multi-year projects, revenues can be posted as the work in completed.


(minus) Operating Expenses (not including depreciation)Only those expenses incurred to create revenues in the current period should be included as part of operating expenses. Labor,  marketing and general and administrative costs are all operating expenses. If HAWB & MAWB bills  purchased in the current period is not used in production, it is carried over as inventory into the next period.

Inventory has to be valued to estimate operating expenses, and company can choose to value inventory based upon what they paid for the material bought at the end of the period (FIFO), at the beginning of the period (LIFO) or an average price.

  • If assets (like Loading Truck, Containers etc.) are leased, and the lease qualifies for treatment as an operating lease, then operating lease expenses are also treated as operating expenses.


  • Finally, one-time restructuring charges can qualify for treatment as operating expenses.
(minus) Depreciation and AmortizationAny expense that is expected to generate income over multiple periods is called a capital expense. A capital expense is written off over its lifetime, and the write-off each year is called depreciation (if it is a tangible asset like machinery) or amortization (if it is an intangible asset such as a copyright).

Since the value that an asset loses each period is subjective, depreciation schedules are mechanized. They can broadly be classified into two groups — straight line depreciation, where an equal amount gets written off each period, and accelerated, where more of the asset gets written off in the earlier years and less in later years.

  • Firms all over the world are allowed to use different depreciation methods for tax and reporting purposes. For tax purposes, they tend to use accelerated depreciation (since it reduces taxable income and taxes). For reporting purposes, they tend to use straight line depreciation.
= Operating Income (EBIT)When operating expenses and depreciation are subtracted from revenues, we estimate operating income. This is designed to measure the income generated by a firm’s assets in place. 

(minus) Interest ExpensesThe most direct source of interest expenses is debt taken on by the company either from a Corporate Office, sister concern or from Bank. Interest expenses also include imputed interest computed on leases that qualify as capital leases.


  • Interest expenses are tax deductible. They need to be subtracted out to arrive at taxable income.
  • Some firms have non-cash interest expenses. While they are tax deductible, they need to be tracked for cash flow purposes.
= Taxable IncomeIf the depreciation reported is the tax depreciation, netting the interest expenses from the operating income should yield the taxable income.
  • To the extent that company  uses different approaches for computation (especially for depreciation) for tax and reporting purposes, the taxable income in the reported statements will be different (and generally higher) than the taxable income in the tax books.
(minus) TaxesThese are the taxes due and payable on income in the current period. Generally speaking, it can be computed as

Tax = Taxable Income * Tax Rate

  • Firms usually report an “effective” tax rate computed by dividing the taxes by the reported taxable income. Since the reported taxable income is usually higher than the true taxable income, the effective tax rate will usually be lower than the firm’s true average tax rate.
= Net IncomeThe income after taxes and interest is the net income. 
(minus) Losses (+ Profits) not associated with operationsThese are expenses (or income) not associated with operations. 
(minus) Profits or Losses associated with Accounting ChangesChanges in accounting methods (such as how inventory is valued) can result in earnings effects. 

Some of major revenue sources of WAC are mentioned below:

·        Airlines Commissions

·        Bill of lading stamp


·        Cargo Air Freight


·        CargoOcean Freight

  • C & F Commission

  • Income from Terminal Handling Charge (THC)

  • Income from Import Document Charges

  • Handling Charge



4. 7 Analyzing Financial Information:

Measuring Profitability:

While the income statement allows us to estimate how profitable a firm in absolute terms, it is just as important that we gauge the profitability of the firm is in terms of percentage returns. There are two basic gauges used to measure profitability. One is to examine the profitability relative to the capital employed to get a rate of return on investment. This can be done either from the viewpoint of just the equity investors, or looking at the entire firm. Another is to examine profitability relative to sales, by estimating a profit margin.

The following table summarizes widely used accounting profitability measures, with measurement issues that come up with each.




Return on CapitalEBIT (1- tax rate) / (Book Value of Debt + Book Value of Equity)
  • If operating income is used (rather than after-tax operating income, this becomes a pre-tax return on capital
  • The book value of capital is used as a measure of capital invested in the firm. To the extent that the book value is not a reasonable estimate of this value, the return on capital will be mis-estimated.
Return on AssetsEBIT (1- tax rate) / (Book Value of Assets)
  • The distinction between assets and capital lies in current liabilities, since the latter does not include it.
  • In finance, the return on capital can be compared to the cost of capital but the return on assets cannot.
Return on EquityNet Income / Book Value of Equity
  • This becomes a measure of the profitability of the equity invested in the firm.
  • A firm can increase its return on equity by raising net income or lowering the book value of equity. (The latter can happen when stock is bought back)
  • In some cases, the book value of equity can become negative (after extended losses). The return on equity can no longer be computed for these firms.

Operating MarginEBIT ( 1- tax rate) / Sales
  • This ratio, since it is based upon income prior to interest expenses, is much more comparable across firms of different leverage.

Financial statements remain the primary source of information for most investors and analysts. While an understanding of every detail and FASB rule may not be necessary, it is important that the basics be understood. This primer attempts to explain the basics of financial statements and the generally accepted accounting principles that underlie their construction, and the various financial ratios that often accompany financial analyses. As long as there is recognition that financial statements and financial ratios are a means to an end, which is understanding and valuing the firm, they are useful.

4.8 Auditing in WAC


After the preparation of accounts, it’s needed to be audited. Under the mentioned ordinance two types of audit are being conducted in WAC internal audit and external audit.

Internal audit:  The internal audit department of WAC carries out internal audit. The head of this department reports to the Managing Director of WAC. The responsibility of this department are-

  1. To ensure regular and systematic audit of financial records & transactions, revenue documents and final settlement
  2. To ensure the rules on financial matters are correctly implemented.
  3. To suggest regarding formulation/ implementation/ amendment of rules and regulations for effective control.

External audit: Pursuant to the provisions of WAC Corporation, WAC appointed an audit firm named ‘A WAHAB & Co.’ to conduct the audit of its Financial Statements. WAC usually changes audit firms after each three years. The audit firm conducts the audit jointly through mutual understanding. The firm carried out audit on all the financial statements. The firm is usually given a fortnight to perform the assigned audit work. The given time frame is hardy complied. The audit firms conduct the audit in accordance with Bangladesh Standards of Auditing. External auditor plans and performs the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement as required by the mentioned standards. They review and assess the internal control environment WAC with a view to establishing a basis for placing reliance thereon for determining the nature, timing and extent of testing in connection with the said auditing. The review of internal controls as well as test of compliance with applicable polices, procedures, rules and regulations sometimes reveal certain instances of errors and omissions, weakness and non-compliance. Constructive suggestions are placed before WAC Management containing modification and improvement of internal controls and of monitoring compliance with financial and administrative practices.

Finally the audit firm submit the audit report containing expression of opinion on the financial statements of WAC along with Management reply, if any, on their findings before WAC management committee. Auditors report for financial year 2007-08 is attached herewith as Annexure.

Major Findings of the Study:

While working on Accounting System of Wings Air Cargo Ltd. (WAC) I have attained a newer kind of experience. After collecting and analyzing data I have some conclusions and findings. These findings are completely my personal view to this study.

Major Findings:

  • The financial statements of WINGS AIR CARGO LTD. have been prepared following the Accrual basis of Accounting and accordingly reflect all significant receivables, payables and other liabilities.
  • The financial reporting period of WAC covers  the period of July to June
  • Wings Air Cargo Limited is accustomed to and is comfortable in dealing with large customers. This is convenient for them keeping in view that they will be dealing with lesser number of big clientele than with large number of small of micro customers. Another words, Wings Air Cargo Ltd is designed to cater to the freight and logistics needs of industry, Trade and commerce, but it will be difficult for Wings Air Cargo Ltd to come out from this situation in future.
  • Last year the organization has formulated its policy to give priority to small and medium business Enterprises but currently its showing less interest in small & Medium Enterprises as bad-debt rate against these enterprises is much more higher.
  • Manpower shortage is one of the major problems of Finance & Accounts Department. Employee turnover ratio of this department is much more higher than that of other departments. Attractive offerings from competitors firms are the main reason behind this. Current employees of this department are overburdened with their daily routine works. Besides their daily activities, they have to provide other financial services for the directors and chairman, which hampers their routine activities severely.  As a result, sometimes it becomes difficult for the department to submit accounts report on due time.
  • Moreover, a major portion of working capital has been provided to   directors and operation personnel as advances, which is not adjusted on a regular basis.
  • WAC does not have any Specific procurement guideline. As a result, quotations are not often collected in connection with the procurement of goods and supplies.
  • WAC offered unusual credit facilities to many of its clients due to strong relationship with the directors. That is a violation of the office order as decided at the board meeting two years back. The organization has been charging insufficient provisions for this.  If WAC would has charged sufficient provisions its real profit performance would be low.
  • WAC Limited is not comparatively efficient in processing and executing legal actions against defaulters for its non-repayment of receivables in due time despite having own advocates for dealing with these cases.
  • WAC maintains some SOD accounts with Dhaka Bank, One bank and Bank Asia. Banks deduct interest on these SOD accounts quarterly. Instead of adjusting interest expenses in every month WAC also adjust the interest expense quarterly. As a result, its per month income does not reflects real position.
  • According to my point of view, WAC’s per month income is satisfactory in terms of its size, capital structure and market position. It has all the ability to pay its current obligations, especially fortnight Airlines Payment from its profit. But due to regular contribution in some other loosing concerns WAC has been experiencing fund crisis while making fortnight airlines payments.
  • WINGS dynamic approach to business is well supported by the concerned authorities in Bangladesh. The objective of the company is to deliver reliable, cost effective transportation and information management. The enterprise’s strategy is based on customer satisfaction, shorter order cycle, and least logistics cost a comprehensive edge in logistics. The vision is to provide a one-stop service.
  • The company does not update its Fixed Assets register regularly. As a result, Management does not have sufficient and specific information on its assets.


  • In order to ensure adequate control on all its tangible assets the management should introduce a fixed asset register where all the information will be systematically recorded, updated and a true position of the company’s fixed asserts will be reflected.

 In order to ensure transparency in financial transactions WAC should develop a procurement guidelines to ensure optimum usage of company’s financial resources.

  • At WAC LTD. usually tax is not deducted at source from salary of employees who cross tax exempt limit. Failing to deduct tax at source may result in disallowance of these expenses at the time of assessment resulting in excess tax burden for the company. Tax should be deducted at source from salary of all employees who cross tax limit to comply with the income tax ordinance 1984.
  • To make the supervision fallow-up and control functions effective in the WAC and its branches the number of qualified and trained personnel should be increased to the optimum level together with the changes in the traditional Psychological attitude of the managers and personnel.
  • Proper training should be conducted for the executives to improve their professional standard. As a result, they will be able to perform their activities in a more efficient way.
  • Each customer should be given a unique registration number for the purpose of identification.
  • Legal system should be made adequate and quick in order to deal with the problems of overdue.
  • The board of directors of the organization should come forward to ensure good governance through transparency and accountability.
  • Supervision and follow-up activities for customers to whom credit facilities have been offered should be carried out on a regular basis.
  • Approval authority should be delegated to individual executives rather than Executive Committee / Board to ensure accountability. This system will not only ensure accountability of individual executives but also expedite the approval process.
  • In some cases the recovery performance of WAC was found to be unsatisfactory during the study period. Efforts should be made as soon as a customer become irregular in respect of repayment and remedial measures should be started as early as possible .The main reasons attributed to such poor and unsatisfactory recovery position of dues were reported to be (a) Inadequate and ineffective supervision and follow up activities (b) Unwillingness to institute any legal proceedings against the defaulters (c) granting and sanctioning of credits depending on personal relationship with the customer.


Good corporate governance is a must for today’s complex and dynamic business environment to ensure long-term sustainability. So, it should be cultivated and practiced regularly within the current structure of the business.  The accounting profession is integral to good corporate governance. Accounting is a process of compiling information for reporting the internal affairs of any entity to different stakeholders at the end of a certain interval. It is defined as the language of business and can play a vital role for ensuring and continuing with Good corporate governance (GCG).  Accounting professionals are the primary providers of financial information to boards, executives, capital market participants and stakeholders. Users rely on others in the accounting profession when making their decisions. Needless to mention, quality accounting provides better information for identifying good and bad investments, disciplining managers, and reducing adverse selection among investors. Good accounting leads to good corporate governance. And good corporate governance enhances the performance of corporations, by creating an environment that motivates managers to maximize returns on investment, enhance operational efficiency and ensure long–term productivity growth.

Good accounting offers enormous benefits, the availability and lower cost of capital, the ability to attract talent clients and business partners, improved competitiveness and financial performance, and truly sustainable long-term growth. To ensure Good Accounting, WAC’s management further decided to go for comprehensive automated live accounting system and therefore, purchased latest version of well known accounting software “ACCPAC”.

Despite having some drawbacks, WAC’s accounting system is satisfactory in terms of its size and capital structure. The failure of international freight forwarding occurs mainly due to bad debts and failure of services. Like other organization WAC also can not sleep well with bad debts in its portfolio. Therefore, management has taken some proactive strategies in this connection which are ultimate result of WAC’s accounting & Information System. But, all things around us are changing at an accelerating rate. Today is not like yesterday and tomorrow will be different from today. Today’s international freight forwarding organizations are increasingly facing acute competition. Given the fast changing, dynamic global economy and the increasing pressure of globalization, liberalization, consolidation and disintermediation, it is essential that WAC has a robust accounting system and procedures that are sensitive to these changes. To improve further, WAC should adopt some of the industry best practices that are not practiced currently. So far, WAC has been able to manage its accounting system reasonably & skillfully and if this situation can be continued it will be able to satisfy stakeholder’s interest.

Wings Air Cargo Ltd

Related Organizational Behavior Paper:

Popular Organizational Behavior Paper:

Report on Pran Food Company

Introduction: In this report, we have also created a new product of the Pran Food Company’s product line that is newly introduced into the market. For that product, we make a marketing plan including essential marketing strategies. 1.2 Objective of the study: Objective of the study of the repor.....

Report on Janata Bank Limited

1.1 Introduction of the Study The primary purpose of this report is to get an idea about the operations of Janata Bank Limited, a second-generation bank of the country and make an industry analysis on the banking sector of Bangladesh. Banks are profit – earning concern. The ‘word “Bank.....

Assignment on KFC in Bangladesh

Executive Summary In the global market increase the demand of hygienic food, KFC is trying to do some contribution in its industry. This report has seven chapters. First chapter is introduction. In this chapter we’ve discussed the objective of the study, methodology and limitation of the study......


Executive summary :Square Pharmaceuticals Ltd. was established as a partnership firm in 1958. In 1991 it was converted into a public limited company. Square Pharmaceuticals Limited is the largest pharmaceutical company in Bangladesh and it has been continuously in the 1st position among all natio.....

Report on Square Pharmaceuticals Ltd

Background Square Pharmaceuticals Ltd. (SPL), the pharmaceutical giant in the country, is a trusted name in the industry of manufacturing quality medicines for more than four decade. SQUARE today symbolizes a name – a state of mind. From the inception in 1958, it has today burgeoned into on.....