THE MOST EXPENSIVE SHIP

Pic 1a & 1b: The most expensive vessel on earth






















Pic 2: Malaysian Business bought Yatch for RM14.5billion?

In F8 (Audit & Assurance), we are taught to use Analytical Substantive Procedures. In simple definition means to compare 2 variables to arrive at a "PLAUSIBLE RELATIONSHIP".

To illustrate: recently there was allegation that a 29 year old Malaysian Businessman is so so rich that he could afford a RM$14.5 billion luxury yatch that was furnish interiorly with gold. That is simply difficult to phantom or understand. Simply impossible to be that expensive. (please see news on The Star papers below)

Most Expensive Vessel
The most expensive Ship ever built costs US$6.2 Billion or RM$18 billion. It is an American Warship cum Aircraft carrier which could take typically 75,000 tonnes extra load and has become the pinnacle of carrier development. It's powered by nuclear reactors and form the core of a fleet designed to operate far from home. Also has capabilities as "commando carriers" or "helicopter carriers". It's a moving military base at sea.

The ship is called USS George H.W. Bush (CVN-77). Its named after World War II veteran and former President of the United States, George H. W. Bush. The USS George H.W. Bush (CVN-77) is the final Nimitz super-carrier to be produced for the US Navy. It was commissioned in 2001 and built by Northrop Grumman for a cost of $6.2 billion.

The carrier was completed in 2009, and is docked in Virginia. At almost 1,100 feet in length, it’s one of the longest warships in the world. Its top speed is over 30 knots, which it reaches with the help of two onboard nuclear reactors. This power source is capable of keeping the ship running for more than twenty years without once having to refuel.

Can USA Afford such a ship?
United States’s military expenditure in 2010 was about $687 billion or roughly 4.7% its 2009′s GDP. China, on the other hand spent about $114 billion or merely 2.2% its GDP for the same period. No other country on earth has a larger defense budget than the United States. A lot of this money is spent on tanks, aircraft and carrier.

Can single yatch be valued RM14.5billion? (Sourced from The Star news)
Italian yacht builder Baia has claimed that the RM14.5bil golden yacht purportedly bought by a leading Malaysian businessman was fake, and photographs of it were digitally manipulated.

Baia sales manager Mario Boselli said there was no golden boat and the story was made up by a British designer.

“We only have normal boats here, not golden boats. It is a stupid story and has nothing to do with us. They took photographs from our website without permission,” he said in a telephone interview yesterday.

British boating magazine Motorboat & Yachting published an article on its website in which Borselli said the yacht was fake.
The real deal: A picture of the Baia One Hundred taken from the builder’s website and (inset) the doctored photo of the yacht.

He said he would be writing to the British designer to remove the photographs from his website but would not be taking legal action.

Photographs of Baia's One Hundred model were purportedly used for the story published in British daily The Sun about a 31m yacht called the History Supreme.

The report claimed the yacht was coated with 100 tonnes of precious metals and gemstones, making waves in Malaysia with many speculating on who the owner could be.

In the story, British jeweller Stuart Hughes was named as the person who designed the yacht.

Attempts to contact Hughes by telephone were unsuccessful.


Conclusion
Auditors perform their work with professional scepticism which is not to take evidences at face value. The need for audit evidences which are "reliable" and "relevant" to support their audit opinion.

The next time you read news online, blogs or newspaper reports, do use Analytical Procedures to arrive at the reasonableness of audit judgments.

Sources:
The Star, 2011, Hoax, http://thestar.com.my/news/story.asp?file=/2011/7/28/nation/9188405&sec=nation, 28 July.

Local accountants attracted by foreign greener pastures

Relevant: F8 and ACCA Candidates































Clockwise:
Picture 1: Invest now in myself - Brains
Picture 2: No distractions - Focus
Picture 3: My Future/Unknown Stakeholders - own family to have a better future? The destiny is in my hands



Why we need NOT join the Top 4 Audit firms? The conventional wisdon of joining them is to have Career exposure and better CV is the obvious answer. But what if you are paid 70% discounted salaries? Yes, if your market value is RM100,000 but paid RM30,000? Malaysia is losing talents fast - to other countries.

As always highlighted in class, get trained & be an ACCA graduate, then overseas posting is very attractive and promising. Think about how useful that kind of earning power can be for yourself, family and future unknown stakeholders - future spouse. kids and extended family like in-laws.

Be motivated to work and invest heavily in yourself, work 7-11 style if you are holding a full time job or 8 hours as a full time student.

May the article below give you renewed spirit and vigour to pursue a better future.

Cheers.

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Source : LIZ LEE, 2011, The Star, Local Accountants, http://biz.thestar.com.my/news/story.asp?file=/2011/7/25/business/9163119&sec=business, 25 July

KUALA LUMPUR: Despite unwavering interest in accountancy courses at universities and colleges, mid-tier accounting and auditing firms are finding it difficult to hire and retain their accountants.

The problem: the outflow of local talents to foreign “greener pastures”.

Baker Tilly International chief executive officer and president Geoff Barnes told StarBiz that something needs to be done about this, as “a strong audit profession underpins an economy with good corporate governance, a strong capital market and an economic environment that can cross borders.”

Barnes said the accounting profession has always demanded the brightest of people globally and that good firms have always had this “war for talent, because we are all looking for the best people”.
Barnes (left) and Heng stressing on the importance of retaining accounting talents.

Local member firm, Baker Tilly Monteiro Heng (BTMH) chief executive partner Heng Ji Keng said many Malaysian accounting graduates see better opportunities in Hong Kong, Shanghai, Shenzhen, Singapore and Australia.

Heng added that many graduates left mainly due to the salary disparity. To counter this, he said firms needed assistance from the Government as “a word from the Government is better than a thousand words from practitioners”.

“We need to slowly bridge the gap between the salary we pay here and that offered in the countries attracting our talents. We need assistance from the regulators to impress upon clients that low fees also affect the quality of an auditing job,” Heng said.

A fresh graduate can earn up to RM100,000 per annum in China, around RM85,000 per annum in Singapore while Australian firms pay about RM160,000 per annum. Locally, they would earn about RM30,000 only.

SJ Grant Thornton (SJGT) managing partner Datuk Narendra Jasani said an estimated 500 accounting graduates out of 1,500 from local universities leave the country every year.

Both firms, BTMH and SJGT, said the Government could further benefit the country's accounting profession by liberalising immigration policies.

Heng said the many foreign students studying here could be a good source of accountants for local firms, provided the Government revises the related immigration restrictions.

“We must acknowledge their potential and train them to become qualified professional accountants,” he said.

Both Heng and Jasani suggested that the Government could look into giving foreign students a work permit of three to four years after their studies.

“To avoid disheartening our Malaysian accountants, a quota could be set for firms to employ no more than 20% foreign accountants,” Jasani further suggested.

Heng pointed out that another turn-off for young accountants to begin their career here is the difficulty in getting a licence to practise.

“The accountants have to go through about a decade of university education and training, topped off with a scrutinising interview that tests them on the technicalities of the industry before the Finance Ministry issues a licence,” Heng said.

Specifically, Malaysian accountants need three years for a university degree, three years of working experience, another three years of post-Malaysian Institute of Accountants membership and an interview to determine whether they would qualify for a licence. The tedious process and no guarantee of getting a licence to practise has become a deterrent to young accountants when embarking on their careers.

“We also have to change work procedures. One aspect is to change the audit methodolgy no more ticking and checking all the time but more thought-processing, overviews and comparative analysis which is more suited to the younger generation,” SGJT's Jasani said.

Grant Thorton International chief executive officer Ed Nusbaum said the rapid economic growth and expansion in the entire Asia-Pacific region has caused the shortage of talent.

“The demand is greater than the number of students graduating from universities and qualified experienced talent within the region. Whether you are talking about Malaysia, China or India, we need to attract people to the accounting profession,” he said, adding that dynamic firms also contributed to attracting young accountants.

“Being part of a growing organisation makes (one's career) interesting and employee retention is better because people see opportunities,” Nusbaum concluded