...TABLE OF CONTENT Introduction 3 Stakeholders and their stakes 4 Case analysis -Issues, impacts and improvements 5 Conclusion 11 1. INTRODUCTION 1.1 CASE SUMMARY 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. This case is about Delima Enterprise which wants to make banking facilities from Malayan Banking Berhad and CIMB Bank Berhad. The banks required company’s Audited Financial Statements for the last two years. From the requirement, Encik Zayed and Puan Hashimah realised that the company did not performed any statutory audit before. So, they engaged with the external Auditor Aziz & Co. (Chartered Accountant). The auditor need to performed statutory audit for the period 2003 to 2006. There are some mistakes happened during the last two years founded by the auditors. To resolve several issues, the auditors need to qualify the Financial Statements. However, Encik Zayed and Puan Hashimah tried to negotiate with the auditor to not qualify the Financial Statements. The auditor was not agreeing with the Encik Zayed negotiation and he planned to terminate the auditor appointment. Encik Zayed also...
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...7 A Delima i\{ustapa Kamal Mohd Razali AiniAman Azbir Abu Bakar Yasmiza Long Zayed engaged the external Auditor Aziz & Co (Chartered introduced by his friend to perlorm the statutory audit fbr the period 2003 to Accountant), 2006. That rvas the first audit experience for Encik Zayed and Puan Hashimah and it rvas a dif&cult learning experience. The Auditors expressed their intention to qualify the Financial Statements due to several unresolved issues. Holvever, Encik Zayed and Puan Hashimah tried to negotiate with the Auditor to not qualify the Financial Stateinents, failing which Encik Zayed planned to terminate the auditor's appointment and appoint a new "friendly party" apditor. Encik Zayed and Puan Hashimah were not familiar with Accounting Standards and the provisions of the Companles Act 1965, including their roles and cluties as Company Directors. Thc uurrrpaiiy had uraintaineri a very lean organisation and had employed therr own iamily men:bers as employees and some did not have the necessary job experiences. lt was July, 2006 when Encik Time was the esse*ce and the Audited Financial Statements had to be issued to the bank at least by September 2006, as Encik Zayed had applied for banking facilities to implement severai contracts the company had managed to secure. Encik Zayed had assigneql the tasks to Cik Amy, the Finance Executive u,ho lvas nervly appointed by ihe company to anaiyse and provide the Auditors lvith the necessary clarification and docutnentalion...
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...structure -Directors makes all major decisions and monitor all activities Alternative solution: i. Adopted concept of functional structure En. Zayed CEO Pn. Hashimah COO En. Salam HR & Admin Manager Pn. Balqis Operation Manager (Vacant) Account & Finance Manager (Vacant) Admin Executive (Vacant) Project Manager Cik Amy Finance Executive Project Team (Contract basis) Problem: Timesheet are manually prepared by employees -They’re record time in & out by themselves -Wrongly calculate and paid over Alternative solutions: i. Use access card ii. Use time clock machine @ thumbprint iii. Should hire an additional employee who can monitor the attendance and timesheet iv. Use CCTV Problem: No SOP adopted by Delima Enterprise Sdn Bhd -All decision are authorized by En. Zayed and Pn. Hashimah -No reconciliation was performed for each accounts Withdrawals are made from the Company without proper documentation Alternative solution: i. Each department should implement SOP Problem: Lack of authorization of business transaction -Due to no SOP followed, all decision were made and authorized by either En.Zayed or Pn.Hashimah Alternative solution: i. Adopted segregation of duty between persons who approve and stamping the documents and authorized by at...
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...CASE PREPARATION CHART Student Name | Ahmed Abdel rahman Mustafa Salim | Student ID | 1091105622 | Submission date | 31st March 2014 (Before 12:30pm) | Case title | A Delima | Section | Case 1 | ------------------------------------------------- ------------------------------------------------- ASSESSMENT To be filled by facilitator Components | Scores | Scores | | 1 mark | 2 marks | 3 marks | 4 marks | | Completeness of case chart | Case chart is incomplete | Some of the case chart requirements are met satisfactorily. | Most of the case chart requirements are met satisfactorily. | All case chart requirements is met satisfactorily. | | Submission | On-time submission | N/A | N/A | N/A | | TOTAL | | Case analysis STAGE 1 Issues Explain the main issues underlying the case. Place extra attention on the what, why and when. The main issue that was underlying the case is how to overcome the weaknesses, deficiencies and the dilemmas of a family-owned business discovered by the current auditor “Aziz & Co” and Cik Amy “Finance Executive”. Delima Enterprise Sdn Bhd founded in 1981 as sole proprietorship turning into a Private limited company in 2004. In May 2006, the Company had secure a contract worth RM750,000 to be implemented over six months , however, due to the shortage of the fund, the Company need to apply loan from Malayan Banking Berhad and CIMB Berhad totalling of 1 million. On the other hand, in order to get the banking facilities, the Company have...
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...A Delima Company Background Delima Enterprise was founded in 1981 by En Zayed. It conducted trading and supplying related products including manpower supplies to the oil and gas industries. Subsequently in 2004, due to encouraging business growth, the enterprise was incorporated as Delima Enterprise Sdn Bhd. The two principal shareholders and controlling directors were Encik Zayed and Puan Hashimah which are husband and wife. Since 2006, the company has been awarded with several engineering project. In May 2006, the company had secured a contrct worth RM 750,000 to be implemented over a duration of 6 months. Due to shortage of funds, the company has submitted applications to Maybank and CIMB for banking facilities. The banks required the company’s Audited Financial Statements for the last two years. Encik Zayed just realised that the company had not performed the statutory audit . A friend has introduced Encik Zayed to an audit firm , Aziz & Co ( Chartered Accountant ) . Shortly, the audit firm was engaged to perform the audit. Issues Question 1 : Were the are abuses of power in management and breach of fiduciary on the part of directors ? Answer : Yes there are abuses of power by the management and breach of fiduciary duty of director. Fiduciary is an obligation to act in the best interest of another party. According to Section 132 (1A) Company Act stated that a director must act honestly at all times and used all reasonable diligence in the discharge of...
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...MAF 680 INTEGRATED CASE STUDY (A DELIMA) Prepared By: Norasyikin Binti Sirun Period: Sept 2014-Jan 2015 Class: AC2208D(KB) Prepared For: Puan Faizah Binti Hamzah Were there any abuses of power by the management and breach of fiduciary on the part of the director? According to Section 132(1) Company Act 1965, a director shall at all times act honestly and use reasonable diligence in the discharge of the duties of his office. In this matter the answer is yes, there’s an abuse of power by the management and breach of fiduciary duty of director. A fiduciary is someone who is in control of property in which others have an interest, or is given a power which is exercised on behalf of those who are in a position of dependence. That person owes a duty of loyalty and good faith. As a fiduciary, a director’s duties are: a) Duty to exercise power in good faith and in the interest of the company In this case, one of the directors of Delima Enterprise is Encik Zayed. He had breach his duty to exercise power in good faith. Encik Zayed engaged the external Auditor Aziz & Co (Chartered Accountant), to perform statutory audit. The Auditor expressed their intention to qualify the Financial Statements due to several unresolved issues. His trying to negotiate with the Auditors to unqualified the report, however, the auditor did not agree. So, Encik Zayed was planned to terminate the auditor’s appointment and appoint a new “friendly party” auditor. According to law...
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...CASE ANALYSIS QUESTION 1 From the legal perspective, were there any abuses of power by the management and breach of fiduciary on the part of the directors? In our opinion, there are abuses of power by the management in the company of Delima Enterprise Sdn Bhd. The management should act in the best interest of the company not the best interest of the director. For example in this case, the management uses their power to withdrawals several money from the company without proper documentation. It is illegal because management is not allowed to take money without authorization. Another abuse of power use by management is they claimed the personal vehicle expenses charged to the company. The management should be aware of separate legal entity. All this problem occurs because lack of internal control and no segregation of duties among staff in the Delima Enterprise Sdn Bhd. Director plays an important role in the management of the company and adopting policy decisions to the company. Therefore the directors have certain important duties while conducting company business. There are three types of fiduciary duties of company director which are duty of reasonable care, skill and diligent, duty to act in good faith in the best interest of the company and duty to avoid conflict interest. Director is responsibilities to fulfill their fiduciary duty and owes a corporation duty of trust and is bound to act in the best interest of its shareholders. The first duties that the directors must be...
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...1) The important of separation of right and duty between shareholder and management. Delima Enterprise Sdn. Bhd. was a large company due to these reasons; the company had been awarded with several engineering projects and its cumulative revenue for 2004 and 2005 were nearly RM 1 million and RM 1.7 million respectively. By referring that reasons, we can say that it was a large company. As a large company, the shareholders are separated from Board of Director and management. However, in this case, there is no separation or segregations of rights and duties between shareholder and management. Segregation of right and duties means assign two or more competent and qualified individuals in a way that provides reasonable assurance comply with the standards. It means, at any time , no one person should be in position of doing the primary functions of authorizing, recording and taking care the custody of assets. Besides, shareholders and director have two completely different roles in company. Shareholders are owner of the company while director manage the company. From what we can see in this case, Encik Zayed is the shareholder of Delima Enterprise Sdn. Bhd., in the same time he act as Managing Director. Meanwhile Puan Hashimah is the shareholder of Delima Enterprise, in the same time she act as Chief Operating Officer. Before the company hire Cik Amy as Finance Executive, Puan Hashimah was responsible for all finance related matters. There is clearly stated that they do not have...
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...Key players Based on the issues identified above, determine the key players involved, their position/roles and the main decision that they have to make. Num. Who? Position/roles Main decision 1 Encik Zayed Director 1. Whether to negotiate with the external auditor to issue an unqualified report. 2. Whether to terminate the auditor’s appointment so in order for him to success in applying loan from the banks. 3. Whether to commit and invest on necessary training to enhance the knowledge of the employees as to fulfill its corporate social responsibility (CSR). 4. Whether to redesign the organization structure as to improve its efficiency. 5. Whether to provide clearly stated company’s vision. 2 Puan Hashminah Director 1. Whether to hire their own family members (Puan Balqis & Encik Salam) to do job which they are not qualified. 2. Whether to established Standard Operating Procedure as recommend by the external auditors. 3. Whether to stop using manually prepared timesheet by the employee itself and assign a staff to supervise employee’s attendance in order to prevent employee take advantages over the slackness. 4. Whether to implement policy for hiring employee as to prevent unqualified staff. 5. Whether to pay the contract worker based on monthly basic by including EPF and SOCSO. 3 Cik Amy Finance Executive 1. Whether to implementing computerized preparing sales invoice, purchase orders and automatically allocating pre-numbering for each of the document in order...
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...INTRODUCTION Delima Enterprise Sdn. Bhd. was founded by En. Zayed in 1981. It conducted trading and supplying related products including manpower supplies to the oil and gas industries. The two principal shareholders and controlling directors were En. Zayed and Puan Hashimah. The company’s corporate mission was to become a leading service contractor and provide quality products and also excellent services. In this Delima case, the company had secured a contract worth RM 750,000 to be implemented over duration of 6 months in May 2006. Due to shortage of fund, the company needs to apply loan from Malayan Banking Berhad and CIMB totaling RM 1 million. In order to get the loan, they had to provide audited financial statement for the last two years. In July 2006, En. Zayed engaged the external auditor Aziz & Co. to perform the statutory audit for period 2003 to 2006. PROBLEMS AND RECOMMENDATION There are many problems in this Delima Enterprise Sdn. Bhd. case. The first problem is the documents were not properly pre-numbered, recorder and documented. Sales invoices were manually produced and not pre-numbered. Besides that, monthly statement of account was not periodically prepared but only set up and send to customer when payment had been long outstanding. The recommendations to this problems is the documents such as invoices, purchase order, delivery order and many more should be properly pre-numbered so that it is easy to trace if there were missing documents. Then, Delima Enterprise...
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...1.0 Summary This case is about an enterprise founded by family members and later was incorporated as Sdn Bhd. The shareholders are mainly the directors of husband and wife who involved in the management of the company. 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 of 2003 to 2006. That was the first audit experience for Encik Zayed and Puan Hashimah and it was a difficult learning experience. Then the Auditors expressed their intention to qualify the Financial Statements due to several unresolved issues. However, Encik Zayed and Puan Hashimah tried to negotiate with the Auditor to not qualify the Financial Statements, failing which Encik Zayed planned to terminate the auditor’s appointment and appoint a new “friendly party” auditor. In addition, Encik Zayed and Puan Hashimah were not familiar with Accounting Standards and the provisions of theCompanies Act 1965, including their roles and duties as Company Directors. The company had maintained a very lean organisation and had employed their owned family members as its employees and some did not have the necessary job experiences. Time was the essence and the Audited Financial Statements had to be issued to the bank at least by September, 2006, as Encik Zayed had applied for banking facilities to implement several contracts the company had managed to secure. Encik Zayed had assigned the tasks to...
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...INTRODUCTION Based on case study A Delima, students are required to identify issued based on certain topics. Before that, we are required to present our ideas and evaluate plans and strategies to overcome problems by applying relevant techniques during our class. In this case relate to the concept of true and fair view of Financial Statement and focused on skills and attitudes of people in an organization. Moreover, this case make us understand and shows accountant should comply with the Malaysia Financial Reporting Standard (MFRS) and International Financial Reporting Standard (IFRS) respectively to show the reliability of Financial Statement. Besides, we are able to know the importance of corporate governance in the business world. A part from that, we are notice about the principle of separation of ownership and management in the company relating to the director’s fiduciary duty to the company. Plus, we need to recognize the code of ethics for Company Secretary. Last but not least, we should consider other aspects in this case to reflect the best recommendation to achieve the effectiveness and efficiency of the business management. 2.0 OVERVIEW OF THE CASE A Delima case is about family businesses that are set up by Encik Zayed and Puan Hashimah. It conducted trading and supplying related products including manpower supplies to the oil and gas industries. Later in 2004, due to encouraging business growth, the enterprise was incorporated as Delima Enterprise Sdn Bhd (DESB)....
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...PRACTICAL TRAINING (PAC600) STUDENT’S FEEDBACK FORM FACULTY OF ACCOUNTANCY |NAME |KHOIRUL AAZIEMAH BT ABDUL RAHIM | |UiTM NO. |2011884574 | |BATCH GROUP |23 (SEMESTER FEBRUARY-JULY 2015) | |NAME OF THE COMPANY |ZAHAR & ASSOCIATES SDN BHD | |COMPANY ADDRESS |NO 95G, JALAN DENAI INTAN, | | |BANDAR BARU, P.O. BOX 22 | | |36400 HUTAN MELINTANG, PERAK | |No. |Questions |YES (() |NO (() | |1 |Did the employer brief you when you first join the company? |( | | |2 |Were you given a proper plan for your training for the whole of your stay in the company? |( | ...
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...BORANG AZ 001 UNTUK KEGUNAAN PEJABAT SAHAJA Permohonan : Faks : 03-26175252 Ulangan GAMBAR BERUKURAN PASPORT No. Rujukan : Bahagian Baitulmal, Bangunan Daruzzakah, Lorong Haji Hussein 2, Off Jalan Raja Muda, 50300 Kuala Lumpur Tel : 03-26175222 Baru Laman web : http://www.maiwp.gov.my BORANG PERMOHONAN SKIM BANTUAN BAITULMAL MAIWP JENIS BANTUAN : (Satu Borang Untuk Satu Permohonan Sahaja) Bantuan Kewangan Bulanan Bantuan Kecemasan Bantuan Menyelesaikan Hutang Bantuan Deposit Sewa Beli Teksi Bantuan Tambang dan Keperluan Diri Bantuan Deposit/Sewa Rumah Bulanan Bantuan Deposit Sewa Beli Van/Bas Sekolah Bantuan Persediaan Sekolah Bantuan Membaiki/Membina Rumah Bantuan Perniagaan Bantuan Am Persekolahan Bantuan Deposit Beli Rumah Kos Rendah Bantuan Pertanian/Perikanan/Penternakan Bantuan Persediaan IPT Bantuan Haemodialisis Bantuan Perkahwinan Bantuan Am Pelajaran IPT Bantuan Peralatan Kesihatan Bantuan Guaman Syarie Bantuan Tuisyen (Labuan Sahaja) Bantuan Perubatan Am 1. Bantuan Motorsikal OKU Bantuan Musibah Bantuan Galakan Hafaz al-Quran MAKLUMAT PEMOHON / KETUA KELUARGA No. K/Pengenalan : - Nama Sendiri No. Telefon (Rumah) : - Tarikh Lahir : - Tempat Lahir : Keadaan Fizikal 2. : : No. Passport / Tentera / Polis : : Status Kediaman - : Alamat (Sila Isi Ruang Yang Disediakan Dengan Lengkap Menggunakan HURUF...
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...ECONOMIC AND MANAGEMENT SCIENCE INTEGRATED CASE STUDY ACC 4291 SEMESTER 2 2012/2013 CASE REPORT CASE 1: A Delima PREPARED BY: AINI SALEHA BT MOHAMAD FAUZI 0826746 MUHAMMAD ASNAWI B RAPIE@SHAFEI 0918761 HARON BIN RASHID 0829181 PREPARED FOR: PROF DR SHAMSUL NAHAR ABDULLAH CASE SUMMARY Delima Enterprise is founded in 1981 by Encik Zayed. The main activity of Delima Enterprise is conducted trading and supplying related products including manpower supplies to the oil and gas industries. The company activities had expanded into provision of engineering services. Due to encouraging business growth in 2004, the Delima Enterprise was incorporated as Delima Enterprise Sdn Bhd. Since 2006, the company awarded with several engineering projects and its cumulative revenue for 2004 is RM1 million and RM1.7 million for 2005. The company is family based company and most of them only have secondary school background. They do not familiar with the audit. They also did not familiar with Accounting Standards and the provision of the Companies Act. The company also consists from the non experiences staff of their job. The protagonist or decision maker in this case is Encik Zayed. Encik Zayed is a principal shareholder and controlling director. Delima Enterprise Sdn Bhd wants to make banking facilities from Malayan Banking Berhad and CIMB Bank Bhd. The bank required company’s Audited Financial...
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