Dear Hard-working ACCA F8 Candidates,
Pleased to provide the answer below for your good reference.
Work HardER,
Marcus
Answer E for Question on Audit report
ISA 260: Reports to Management requires auditors to communicate with management over the following matters namely:
• Ethical threats discovered during the audit engagement that may question the Professional due care, independence, objectivity and integrity of the audit team members and/or engagement partner.
• Stating the overall scope of audit and its limitation especially highlighting reliance on client’s internal controls and the limitations of using sampling when performing Test of Details substantive test.
• Highlight the significance of accounting policies change impact on client’s presentation of accounts.
• Requiring significant audit adjustments. This means the item misstatements have exceeded AUDIT THRESHOLD.
• Significant disagreement with management on Financial Statements and/or Disclosures.
• Expected Audit Report Modification if management continue to REFUSE to make adjustments.
• Material uncertainties affecting the entity’s ability to continue as a going concern. Auditors require SOFP to be valued as a BREAK UP Basis.
• Highlighting the material weaknesses in entity’s internal controls.
• Highlighting the failure of entity to comply with laws, local regulations or stock market requirements.
Thursday, October 28, 2010
Wednesday, October 13, 2010
Would you like to 'earn' (Unethically & Immorally) RM25million (US$8.34 million)?
Relevant to P1 and P7
Pic 01: Quiz: Which two directors are charged for corruption? One is from Singapore and another is a "Datuk". (Clue: Read the article below)
Pic 02: Profitable Monkey Business?
Dear ACCA Candidates,
We are all taught to calculate Risks and Rewards Balance. What if your spend 2-10 years in a business with some hardship of long ‘idle’ hours but assured of Returns based on no investment of RM26 million? Interested? Well, Malaysia Legal and Corporate Governance would afford your such opportunity. If caught, you get to spend 'idle' time in Sg. Buloh jail.
Two directors of a Public Listed company, Multi-Code Electronics Bhd, were accused of cheating the company of that amount. The punishment is… are you ready? – minimum 2 years imprisonment, extendable to 10 years with early discharge for good behaviour. Here is the unethical part, you only pay a fine of RM1 million and that is maximum! Yes, you get to keep the balance of RM25 million. Where is the justice? It seems that Malaysia is encouraging such ‘profitable’ business.
Is it any wonder the country became more corrupt from year 2009 to 2010? According to 2009, Malaysia is MORE corrupt than South Africa, Republic of Czechoslovakia and Casino Land Macau! Its positioned at 56. In 2010, it fell to position 59! The cleanest or least corrupt lands are New Zealand, Singapore and Denmark. Not surprisingly, these are dynamic vibrant economies. Yes, corruption kills businesses, economy and social livelihood.
Fortunately, ACCA instill ethics such as Professional Due Care and Integrity among its members. We hope you ACCA candidates will change the perception when dealing with business. After all, cheating millions is no different from a common thief. What is so great about that? Can you sleep soundly knowing you have destroyed lives of others? Can you smile when others praised you for your ‘success’? The only difference between humans and animals is we have ‘conscience’. If our answers to afore questions are we can sleep and smile, then we are no longer humans!
Work hardER and achieve through honest means to provide for yourself and family. Success is based on financial and non-financial factors like integrity, honesty and industriousness.
As for P1 (ACCA), there is serious failure in Corporate Governance.
As for P7 (ACCA), tremondous opportunity to conduct Forensic Audit.
Medidate on the article below.
Marcus
___________________________________________________________________________________________
Tuesday September 28, 2010
Ex-directors charged with CBT
KUALA LUMPUR: Two former company directors have been ordered to enter their defence on four charges relating to fraud and criminal breach of trust on Dec 20.
Sessions Court judge Jagjit Singh ruled yesterday that the prosecution had proven a prima facie case against both the accused Gordon Toh Chun Toh, 59, from Singapore, and Datuk Abul Hasan Mohamed Rashid, 67.
“I am satisfied with the oral and documentary evidence adduced throughout the trial that both the accused had withdrawn the fixed deposits belonging to Multi-code Electronics Industries (M) Bhd amounting to RM18.1mil,” he said.
For the criminal breach of trust (CBT) charges, the court was of the view, that based on the evidence as a whole, both the accused had dishonestly misappropriated a sum of RM26mil.
On March 13 last year, Toh was charged with defrauding Multi-Code, a manufacturer of automotive spare parts, by using the company’s money at Kenanga Investment Bank Bhd in Menara Pelangi in Johor Baru between March 26 and 27, 2007.
Toh, a former Multi-Code managing director, faces an alternative charge of committing criminal breach of trust of RM26mil belonging to the company at Jalan Kuning, Johor Baru, between March 23 and March 28, 2007.
Former Multi-Code executive director Abul Hasan is accused of abetting Toh in the offences.
If convicted for fraud under Section 87A(b) of the Securities Industry Act 1983 (Act 280), Toh and Abul Hasan could be fined a minimum of RM1mil and jailed for a maximum of 10 years.
They also face imprisonment of a minimum two years and maximum 20 years and whipping and can be fined if found guilty under Section 409 of the Penal Code for criminal breach of trust.
Deputy Public Prosecutors Nor Rifhan Raimi Rozi and Ahmad Faiz Munawar appeared for the prosecution. Toh was represented by counsel Kevin Joshua while Abul Hasan was represented by counsel Ng Aik Guan. A total of 31 witnesses took the stand.The case is fixed for hearing from Dec 20 to Dec 22.
Pic 03: What is Hobbes (Tiger) reply to Calvin's (Boy) Comments on corruption? Read "Post A Comment" section below
Sources:
1)The Star, 2010, Ex-directors charged with CBT, http://thestar.com.my/news/story.asp?file=/2010/9/28/courts/7111785&sec=courts, September 28
2)CPI, 2009, http://www.transparency.org/policy_research/surveys_indices/cpi/2009/cpi_2009_table, Date visited: 13th October
3) Multi-Code Electronics Annual Report, 2007.
Pic 01: Quiz: Which two directors are charged for corruption? One is from Singapore and another is a "Datuk". (Clue: Read the article below)
Pic 02: Profitable Monkey Business?
Dear ACCA Candidates,
We are all taught to calculate Risks and Rewards Balance. What if your spend 2-10 years in a business with some hardship of long ‘idle’ hours but assured of Returns based on no investment of RM26 million? Interested? Well, Malaysia Legal and Corporate Governance would afford your such opportunity. If caught, you get to spend 'idle' time in Sg. Buloh jail.
Two directors of a Public Listed company, Multi-Code Electronics Bhd, were accused of cheating the company of that amount. The punishment is… are you ready? – minimum 2 years imprisonment, extendable to 10 years with early discharge for good behaviour. Here is the unethical part, you only pay a fine of RM1 million and that is maximum! Yes, you get to keep the balance of RM25 million. Where is the justice? It seems that Malaysia is encouraging such ‘profitable’ business.
Is it any wonder the country became more corrupt from year 2009 to 2010? According to 2009, Malaysia is MORE corrupt than South Africa, Republic of Czechoslovakia and Casino Land Macau! Its positioned at 56. In 2010, it fell to position 59! The cleanest or least corrupt lands are New Zealand, Singapore and Denmark. Not surprisingly, these are dynamic vibrant economies. Yes, corruption kills businesses, economy and social livelihood.
Fortunately, ACCA instill ethics such as Professional Due Care and Integrity among its members. We hope you ACCA candidates will change the perception when dealing with business. After all, cheating millions is no different from a common thief. What is so great about that? Can you sleep soundly knowing you have destroyed lives of others? Can you smile when others praised you for your ‘success’? The only difference between humans and animals is we have ‘conscience’. If our answers to afore questions are we can sleep and smile, then we are no longer humans!
Work hardER and achieve through honest means to provide for yourself and family. Success is based on financial and non-financial factors like integrity, honesty and industriousness.
As for P1 (ACCA), there is serious failure in Corporate Governance.
As for P7 (ACCA), tremondous opportunity to conduct Forensic Audit.
Medidate on the article below.
Marcus
___________________________________________________________________________________________
Tuesday September 28, 2010
Ex-directors charged with CBT
KUALA LUMPUR: Two former company directors have been ordered to enter their defence on four charges relating to fraud and criminal breach of trust on Dec 20.
Sessions Court judge Jagjit Singh ruled yesterday that the prosecution had proven a prima facie case against both the accused Gordon Toh Chun Toh, 59, from Singapore, and Datuk Abul Hasan Mohamed Rashid, 67.
“I am satisfied with the oral and documentary evidence adduced throughout the trial that both the accused had withdrawn the fixed deposits belonging to Multi-code Electronics Industries (M) Bhd amounting to RM18.1mil,” he said.
For the criminal breach of trust (CBT) charges, the court was of the view, that based on the evidence as a whole, both the accused had dishonestly misappropriated a sum of RM26mil.
On March 13 last year, Toh was charged with defrauding Multi-Code, a manufacturer of automotive spare parts, by using the company’s money at Kenanga Investment Bank Bhd in Menara Pelangi in Johor Baru between March 26 and 27, 2007.
Toh, a former Multi-Code managing director, faces an alternative charge of committing criminal breach of trust of RM26mil belonging to the company at Jalan Kuning, Johor Baru, between March 23 and March 28, 2007.
Former Multi-Code executive director Abul Hasan is accused of abetting Toh in the offences.
If convicted for fraud under Section 87A(b) of the Securities Industry Act 1983 (Act 280), Toh and Abul Hasan could be fined a minimum of RM1mil and jailed for a maximum of 10 years.
They also face imprisonment of a minimum two years and maximum 20 years and whipping and can be fined if found guilty under Section 409 of the Penal Code for criminal breach of trust.
Deputy Public Prosecutors Nor Rifhan Raimi Rozi and Ahmad Faiz Munawar appeared for the prosecution. Toh was represented by counsel Kevin Joshua while Abul Hasan was represented by counsel Ng Aik Guan. A total of 31 witnesses took the stand.The case is fixed for hearing from Dec 20 to Dec 22.
Pic 03: What is Hobbes (Tiger) reply to Calvin's (Boy) Comments on corruption? Read "Post A Comment" section below
Sources:
1)The Star, 2010, Ex-directors charged with CBT, http://thestar.com.my/news/story.asp?file=/2010/9/28/courts/7111785&sec=courts, September 28
2)CPI, 2009, http://www.transparency.org/policy_research/surveys_indices/cpi/2009/cpi_2009_table, Date visited: 13th October
3) Multi-Code Electronics Annual Report, 2007.
Wednesday, October 6, 2010
Uncles Tans and Aunties Maggies that Never Learn
- related to F8, P1 and P7 ACCA students
From Left to Right:
Pic 1: Uncle, got burned?
Pic 2: Perhaps I should listen to my ACCA son studying F8 on avoiding poor Corporate Governance firm?
Pic 3: Do you board a plane after knowing the pilots are negligent? What about Executives on Board?
In 2008, I highlighted in F8 classes the working tools of corporate governance involving External Auditors. (Please visit earlier blogs below). OilCorp executive directors were adamant on their accounting treatment for valuation of asset upgrades involvingi RM20 million in which auditor Baker Tilly disputed.
As shareholders, one will be wise to heed the 'check and balance' call from External Auditors. Surprisingly, Oilcorp berhad's shareholders were 'upset' with External Auditors for causing the fracas and resulting in shares sell down. You know what- shareholders in AGM voted to replace the External Auditors!! Whose duty it is to prepare Financial Statements? Why are auditors punished for highligting to shareholders on Executive Directors' negligence pertaining to accounts preparation?
Well, its proven that the highlight Corporate Governance in at work that the Executives have too much opportunisim and self interest resulting in poor execution of strategy.
Today its dying financially. Declared as PN17 meaning insolvent. Do you know what is the surprising shareholders reaction? Punters, investors mainly uncles and aunties are 'speculating' the stock. The company is at risk of defaulting payments to creditors. How much do you think a shareholder will get if it winds up? Zilch! Zero! Thus if its now at 3sen per share, its way too expensive to buy. Sighh... guess our investors never learn. Uncle Tans and Auntie Maggies that Never Learn the risks of investing in poorly governed company.
Read the article for your F8, P1 and P7 enlightenment.
Regards
News : Oilcorp suspended from Oct 12, faces delisting
PETALING JAYA: Trading in Oilcorp Bhd shares will be suspended with effect from Oct 12 and the securities of the company risk being delisted from the local bourse on Oct 14 unless an appeal is submitted to Bursa Malaysia within the stipulated timeframe.
The move comes after the PN17 (Practice Note 17) company failed to submit its regularisation plan to the Securities Commission or Bursa within the prescribed deadline.
According to a Bursa statement, financially-troubled Oilcorp will be given up to Oct 11 to file its appeal pertaining to the delisting of its shares. Any appeal submitted after that date will not be considered.
In the event Oilcorp submits its appeal within the timeframe, the removal of the its securities from the official list of Bursa on Oct 14 shall be deferred pending the exchange’s decision.
On the other hand, should Oilcorp be delisted, it would continue to exist as an unlisted entity.
The company would still able to continue its operations and business, proceed with its corporate restructuring and its shareholders can still be rewarded by its performance.
Oilcorp was supposed to submit regularisation plans to the regulators by Sept 22, but it had early last month requested for an extension of time until March 22, 2011, claiming that it was still in the midst of discussing and negotiating with its creditors.
Oilcorp was classified as a PN17 company last September because it failed to make an overdue interest payment amounting to RM1.6mil.
In addition, the company also could not provide the exchange with a solvency declaration.
Source:
The Star, 2010, http://biz.thestar.com.my/news/story.asp?file=/2010/10/5/business/7160219&sec=business, October 12.
Blog references:
http://marcusong88.blogspot.com/2008/08/auditors-appointment-professional.html
http://marcusong88.blogspot.com/2010/02/oilcorp-corporate-governance-works.html
From Left to Right:
Pic 1: Uncle, got burned?
Pic 2: Perhaps I should listen to my ACCA son studying F8 on avoiding poor Corporate Governance firm?
Pic 3: Do you board a plane after knowing the pilots are negligent? What about Executives on Board?
In 2008, I highlighted in F8 classes the working tools of corporate governance involving External Auditors. (Please visit earlier blogs below). OilCorp executive directors were adamant on their accounting treatment for valuation of asset upgrades involvingi RM20 million in which auditor Baker Tilly disputed.
As shareholders, one will be wise to heed the 'check and balance' call from External Auditors. Surprisingly, Oilcorp berhad's shareholders were 'upset' with External Auditors for causing the fracas and resulting in shares sell down. You know what- shareholders in AGM voted to replace the External Auditors!! Whose duty it is to prepare Financial Statements? Why are auditors punished for highligting to shareholders on Executive Directors' negligence pertaining to accounts preparation?
Well, its proven that the highlight Corporate Governance in at work that the Executives have too much opportunisim and self interest resulting in poor execution of strategy.
Today its dying financially. Declared as PN17 meaning insolvent. Do you know what is the surprising shareholders reaction? Punters, investors mainly uncles and aunties are 'speculating' the stock. The company is at risk of defaulting payments to creditors. How much do you think a shareholder will get if it winds up? Zilch! Zero! Thus if its now at 3sen per share, its way too expensive to buy. Sighh... guess our investors never learn. Uncle Tans and Auntie Maggies that Never Learn the risks of investing in poorly governed company.
Read the article for your F8, P1 and P7 enlightenment.
Regards
News : Oilcorp suspended from Oct 12, faces delisting
PETALING JAYA: Trading in Oilcorp Bhd shares will be suspended with effect from Oct 12 and the securities of the company risk being delisted from the local bourse on Oct 14 unless an appeal is submitted to Bursa Malaysia within the stipulated timeframe.
The move comes after the PN17 (Practice Note 17) company failed to submit its regularisation plan to the Securities Commission or Bursa within the prescribed deadline.
According to a Bursa statement, financially-troubled Oilcorp will be given up to Oct 11 to file its appeal pertaining to the delisting of its shares. Any appeal submitted after that date will not be considered.
In the event Oilcorp submits its appeal within the timeframe, the removal of the its securities from the official list of Bursa on Oct 14 shall be deferred pending the exchange’s decision.
On the other hand, should Oilcorp be delisted, it would continue to exist as an unlisted entity.
The company would still able to continue its operations and business, proceed with its corporate restructuring and its shareholders can still be rewarded by its performance.
Oilcorp was supposed to submit regularisation plans to the regulators by Sept 22, but it had early last month requested for an extension of time until March 22, 2011, claiming that it was still in the midst of discussing and negotiating with its creditors.
Oilcorp was classified as a PN17 company last September because it failed to make an overdue interest payment amounting to RM1.6mil.
In addition, the company also could not provide the exchange with a solvency declaration.
Source:
The Star, 2010, http://biz.thestar.com.my/news/story.asp?file=/2010/10/5/business/7160219&sec=business, October 12.
Blog references:
http://marcusong88.blogspot.com/2008/08/auditors-appointment-professional.html
http://marcusong88.blogspot.com/2010/02/oilcorp-corporate-governance-works.html
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