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Delima Case

In: Business and Management

Submitted By haikalmokhtar
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REPORT ON DELIMA SDN BHD CASE
This case is about an enterprise founded by family members and later was incorporated as Sdn. Bhd. The shareholders were mainly the directors of husband and wife who were involved in the management of the company. The company involved in trading and engineering services. The company has limited financial sources. Therefore they are applying a loan but to apply loan they have to submit two years audited report which they never knew they had to. They had engaged Aziz & Co. as their auditor. Based on the audit finding the records were not properly kept and no procedure and financial system were in place and lacked internal control. The auditors were not able to express a True and Fair view on the accounts and recommended to qualify the Audited Accounts. As for that Encik Zayed planned to terminate the auditor’s appointment and appoint a new “friendly party” auditor. There are some questions to be answered in this case which are, whether there were any abuses of power by the management and breach of fiduciary on the part of the directors? Who should be held responsible and accountable? Could the Audit be completed soon without any qualification? And what should be done to improve the leadership and management of Delima Enterprise Sdn Bhd?
The first issue is that the directors of the company, Encik Zayed and Puan Hashimah, both are not familiar with Accounting Standard, Provision of the Company Act 1965, and also their roles as directors of the company. Section 132 of the Act provides that a director of a company shall at all times exercise his power for a proper purpose and in a good faith in the best interest of the company. Directors also shall exercise reasonable care, skill and diligence with the knowledge and experience together with the responsibilities towards the company. Director should have knowledge regarding the matter of

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