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Delima Case

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Submitted By mirfar
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1.0 INTRODUCTION
Delima Enterprise was founded in 1981 by En Zayed. The main business are trading and supplying related products including manpower supplies to the oil and gas industries. The enterprise was incorporated in 2004 as Delima Enterprise Sdn Bhd, with En. Zayed, and his wife Puan Hashimah, as the controlling directors and two principal shareholders. The company activities had expanded into provision of engineering services as part of their business diversification and expansions plan. In May 2006, the company had secured a contract worth RM750, 000 to be implemented over 6 months.
Encik Zayed and Puan Hashimah were not familiar with Accounting Standards and the provisions of the Companies Act 1965, including their roles and duties as Company Directors. The company had maintained a very lean organization and had employed their own family members as employees and some did not have the necessary job experiences. It was July 2006 when Encik Zayed engaged the External Auditor Aziz & Co ( Chartered Accountant), introduced by his friend to perform the statutory audit for the period 2003 to 2006. This was first audit experience for Encik Zayed and Puan Hashimah and it was a difficult learning experience.

1.1 SYNOPSIS/ SUMMARY
Delima Enterprise Sdn Bhd faced a problem when they decided to take up loan from the commercial bank and realized that their company financial statement was not audited for quite a long time. However the real problem detected here is that the transformation of the business type of Delima which is from an enterprise to a company. The reason here is that I do not think that Encik Zayed who is head of Delima had done the necessary preparation to become a company especially in term of capital. Operating a company definitely has higher requirements and obligations if compare to managing a sole-proprietorship business.
The assumption

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