Delima Summary

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ACC 4291 Integrated Case Studies

DELIMA ENTERPRISE SDN. BHD.

1.0CHARACTER:

1. Encik Zayed- Principal shareholders- Managing Director

2. Puan Hashimah- Principal shareholders-Chief Operating Officer

3. Puan Balqis- Operations Manager

4. Encik Salam- Human Resource and Administration Manager

5. Cik Amy- Finance Executive (from May 2006)-no working experience

6. External Auditor- Auditor Aziz & Co- to perform statuary audit (2003-2006)

2.0OVERVIEW OF THE PROBLEMS:

❖ May 2006-they secured contract worth RM 750,000 to be implemented over 6 months. Due to shortage of funds, they applied loan from banks. The banks required Audited financial statement for the last 2 years, but they do not have any.

❖ July 2006-1st audit experience

❖ Auditors want to qualify audit because due to several unresolved issues.

❖ He wants to terminate the auditors’ appointment and hire a ‘new friendly party’ auditor.

❖ They are not familiar with FRS n companies act

❖ Employed family members who are not qualified

3.0BACKGROUND OF THE COMPANY

❖ Founded in 1981.

❖ Activities:

• Conducted trading and supplying related products and man powers to the oil and gas industries.

• Provision of engineering services.

❖ Mission: to become a leading service contractor and provide quality products and excellent services.

❖ Revenue: 2004-RM 1 million, 2005-RM 1.7 million

4.0ACCOUNTING SYSTEMS, INFORMATION AND RECORDS

❖ Types of accounts:

• Procurement

• HR-pay workers in cash on a weekly basis

• Accounts payable (AP)

• Accounts Receivables (AR)

➢ Collection via cheques and cash

• Cash Book (CB)

• General Ledger(GL)

• Purchase Order (PO)-manually prepared and not re-numbered

• Trade Creditors (TC)

• Trade Debtors (TR)

5.0AUDIT FINDINGS AND RECOMMENDATIONS

❖ The Auditor had difficulties to complete the audit because:

• Incomplete information and records

• SOP is not in place

• Records are not organized and field accordingly:

➢ Several assets purchased by the company were not recorded

➢ Several overpayment made to Trade Creditors

➢ Several collection from Trade Debtors were long outstanding

➢ Several personal withdrawals and expenses were charged to the company

➢ Several unrecorded cash withdrawals and Cash/banks balances were not reconciled

❖ The Auditors noted several findings:

|No. |Findings |Recommendations |Cik Amy’s analysis | |1. |No SOP & all decisions made by En Zayed or Pn |Prepare SOP and implemented | | | |Hashimah | | | |2. |No reconciliation was performed for AP, AR, |The amount be provided in the P&L Accounts |AP: | | |Cash Book and Balances. | |RM 150 00 (2004) was actually Cash | | |2004-RM 150 000 , | |Advance | | |2005-RM 250 000 | |AR: | | | | |Balance was not a continuous list and | | | |...
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