Accounting is a process of identifying,  measuring, recording, classifying, summarizing, analyzing, interpreting the financial transaction, and communicating the result there to the person interested in such information.

Accounting principles are the general rules and guidance that govern the field of accounting. The organization is required to follow the accounting principles while preparing the financial statements.

Accounting principles are as follows:

1. Business Entity concept
2. Monetary unit assumption
3. Time period assumption
4. Cost principle
5. Full disclosure principle
6. Going concern principle
7. Matching principle
8. Revenue recognition
9. Duel aspect concept
10. The accrual concept

Central bank is the supreme authority or body which controls and stabilizes the economy of every country through various direct and indirect means. Direct means , it uses the monetary policy as a tool to expand and indirect means it uses tools like issuance of treasury bills, national saving bonds and banks rates etc.

Role of central banks in the economy:

• Control of money supply: The first and most important fucntion of the central bank is control of the money supply. The implication of this study is that , if the central bank can control bank can control the rate of growth money, it can influence the growth rate of the economy as a whole.
• Stabilizing the money and capital markets: The financial system must transmit saving to those who require funds for investment so the economy can grow.
• Lender of last resort: This means providing liquid funds to those financial institutions in need, especially when alternative sources of funds have dried up.
• Maintaining and improving the payment mechanism: This involves clearing checks, providing an adequate supply of currency and coin, wring funds and preserving confidence in the value of the fundamental monetary unit.

Bafia 2073 contains following points about the functions, duties and powers of boards:

• All functions to be perfomed and all power to be exercised by the bank or financial institution, other than those to be performed by the general meeting of shareholders, shall be performed and exercised by the board,subject to the act, laws in force and the memorandum of association and articles of associations.
• The board shall ensure the welfare of depositors and general public through corporate governance and not interfere in daily transactions like accepting deposites, disbursing loans, employeee management and budget expenses.
• Other functions of board shall be:

1. The baord may frame necessary bye-laws,directives and policies in accordance to the laws and directives of NRB.
2. Prepare and implement the internal control system and risk management system for the smooth functioning of the bank or financial institution.
3. Manage policies for regular functioning of a bank or financial institution and monitor for the same.
4. Prepare organizational structure, formulate policies and implement them.
5. Prepare annual report and audit report to present in the annual general meeting.
6. Prepare other funcitons as prescribed by NRB.

1. Reporting unit and reporting procedures.
2. It defines money laundering and terrorist financing offenses.
3. Restriction to open account of a fictitious person.
4. Restriction to make anonymous transactions.
5. Restriction to shell banking.
6. Provision of customer due diligence(CDD)–KYC verna lagaune etc..
7. Monitoring and record keeping of cross-border corresponding banking.
8. Institutional provision for the prevention of money laundering and terrorist financing(DLMI,FIU).
9. Provision of seizing of suspicious property and visa/travel documents of a suspicious person.
10. Provision related to punishments.
11. Provision related to rewarding the person who reported of money laundering up to 10 lakhs.

The appointment of the governor follows the following process:

• GON, the council of ministers appoints the governer based on the recommendation by the recommendation committee.
• GON and council of minister sould form a recommendation comitte as follows:
  • A minister of finance
  • One person from among the former governors.
  • Gon chooses one renowned person from the field of economy, monitary banking finance and commercial law.
• The recommendation Committee recommends 3 person to the GON , council of Ministers.
• GON and the council of minister appoints one deserving person as the governer.

Functions duties and power of the governors:

1. Implement decisions made by the boards.
2. To operate and manage the bank.
3. To systematize the function to be carried out by the bank.
4. To represent and cause to represent on behalf of the bank in international organizations and associations.
5. To implement and regulate the policies related to monetary policy and foreign exchange.
6. Formulate necessary policy on rate of interest for deposits and loan with commercial banks and financial institutions.
7. Rate of interest paid by commercial banks and financial institutions on deposite and loan.
8. Formulate necessary policies relating to liquidity maintained by commercial bank and financial institution.
9. To take decisions for opening and closing branch offices and other offices of bank as may be necessary.