What is Workers Profit Participation Fund Audit in Bangladesh (WPPF)
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In order to conduct Workers Profit Participation Fund (WPPF) Audit a company or establishment is required to establish a Workers Profit Participation Fund (WPPF) in Bangladesh. Such a requirement is placed by the Labour Law 2006 (section 232) of Bangladesh. The labour law requires a company to pay five percent (5%) of its Net Profit to the Workers Profit Participation Fund, Welfare Fund and Bangladesh Worker’s Welfare Foundation Fund at the ratio of 80:10:10. The payment must be made no later than nine (9) months of the close of every year.
However, the establishment of such a fund is not mandatory for a company or establishment unless it meets any of the two conditions as specified in section 232 of the Labour Act 2006. The two conditions are: either the amount of its paid up capital on the last day of an accounting year is not less than taka 1 (one) crore (i.e. Tk 10 million); or the value of its permanent assets on the last day of an accounting year is not less than taka 2 (crore) (i.e. Tk. 20 million).
Workers Profit Participation Fund (WPPF) Laws in Bangladesh
However, in cases of hundred percent export oriented industrial sectors or hundred percent foreign exchange investing sectors; the requirement of creating workers profit participation fund is relaxed. According to section 232 (3) of the Bangladesh Labour Act 2006, the Government can make rule for establishing a fund in cases of hundred percent export oriented industrial sector or industrial sectors with hundred percent foreign investment. Therefore, the companies which falls under the description of Section 232 (3) of the Act are not bound to establish a Workers Profit Participation fund under the Act.
It is the law that, every employee are beneficiaries of Workers Profit Participation Fund in equal proportion and are eligible to participate in the Fund. However, employees who has not completed six (6) months of this their service during a year of account, are not eligible to participate in the Funds in respect of that year.
Every company where the creation of Workers Profit Participation Fund applies, is required to establish a Board of Trustees for the management and administration of such fund. Notably, a company is allowed to utilize the participation fund for its business operation. However, this is subject to the approval from the Board of Trustees. It is provided that, in the event of any dispute relating to the administration of the Fund between the Board of Trustees and the company, it must be notified to the Government, and the Government would be the ultimate decision maker.
WPPF Fund Audit Provisions in Bangladesh Labour Laws
Labour Act 2006 makes it compulsory to audit the workers’ participation fund every year (as per section 248). The accounts and expenditure of the Funds shall have to audited.
The term audit is the process of examining the financial records or statements of an organization to determine that the accuracy of financial records or statements and to make sure that those are in compliance with the accepted rules and regulation as well as meet the accepted accounting standards.
Fund audit is an important aspect for a company in respect to a number of factors. For example, it helps a business to attain its objectives, to prevent and detect frauds, increase the value and good will of the business, maintain consistency etc. Audit on the workers’ profit participation is beneficial for both the employer and the employees since it is necessary to ensure transparency in their fund and correct any errors.
How we provide the best Worker's Profit Participation Fund Audit and Legal Services in Bangladesh
FM Associates has an expert financial legal service wing which is comprised of Certified Chartered Accountants of Bangladesh and professional experienced accountants which deals with the audit services. We have a long-standing engagement in providing audit and assurance services (which includes Fund Audit) to the clients. Over the years, by providing audit services with diligently and effectively we have earned a good reputation among the clients. Our team easily can distinguish from others in terms of skills on audit, documentation, reporting, objectivity and many more.
Our audit & assurance team provides services of internal audit, external audit in coordination with our audit partners, performance audit, fund audit etc. During audit, our team makes sure that every number in the statement is properly calculated and transparent, if so, required by the Client. Besides, our experts by analyzing the records and business practices ensure compliance with existing laws and accepted Accounting Principles around the world.
Besides, FMA’s financial wing provide a range of accounting services that includes: advice on accounting issues, preparation of financial and project financial statements, valuation of business, opinion on existing system of accounting, opinion and guideline on the adopted accounting policies by a company.