Fiddle or Not to Fiddle

Only available on StudyMode
  • Download(s) : 971
  • Published : May 14, 2013
Open Document
Text Preview
INTERNATIONAL ISLAMIC UNIVERSITY MALAYSIA
KULLIYYAH OF ECONOMICS AND MANAGEMENT SCIENCES
DEPARTMENT OF ACCOUNTING

ACC 4291: INTEGRATED CASE STUDY

GROUP CASE STUDY:
TO FIDDLE OR NOT TO FIDDLE

TABLE OF CONTENTS
No| Topic| Page|
1| Summary, Protagonist, Main Issue and Problem| 3-5|
2| Why is it wrong for the economic officer to make such a request?| 5| 3| What are the consequences of giving in to the economic officer/s request?| | 4| How would you ensure „true and fair view‟ of financial reporting?| | 5| What are the Accounting standards a Malaysian accountant has to comply with?| | 6| “Those foreign accountants like to show an account making a loss, to avoid paying tax”, alleged the Economic Officer. Can it be true?| 6| 7| How and with what would you „educate‟ the directors and management staff of the company?| | 8| References| 7|

* SUMMARY
The case is about a financial controller in a Sino – Malaysian joint venture was asked by a director representing the interest of the Chinese government, who was also a government official supervising foreign JV companies, to change the P&L position from loss to profit, so that he could paint a rosy picture in his report of JV performance under his charge. This case introduces the scenario in which an accountant may face when he works in a foreign country in a joint venture. The case also serves to illustrate the importance of corporate governance in the business world. Corporate governance encompasses achieving corporate mission or objective, law compliance, upholding code of best practices and adherence to business and personal ethics. The corporate governance could be the foundation of a better business world where fraud, malpractice, corruption could be minimised. * PROTAGONIST / DECISION MAKER AND PROBLEM FACED

The protagonist in this case reflected to Mr. Zhang as General Manager which also as the one who makes the decision. He is the one who responsible due to accidentally decision making in solving two main problems which might bring so many causes to the company’s future decision and performance.. It is either to: * Proceed with Mr. Lee idea to change the P&L position from loss to profit * Support Mr. T in following the ethical code of Malaysian Institute of Accountants. * MAJOR ISSUE IN THE CASE

The major issue in this case is regarding the lack of corporate governance within the business. The solutions available would be for Mr. Zhang to have good corporate governance, which can lead to good internal control, increase productivity, increase profit, will decrease fraud, and reduce audit risk. When establish a company, board of directors set up corporate governance in the company and implement in. All BOD should adhere with the CG rules. CG is the system by which companies are directed and controlled. * PROBLEMS

The dilemma can also faced by an accountant working in a family owned company in Malaysian, where decision is made by the ever powerful founder-owner.The case also serves to illustrate the importance of corporate governance in the business world. Corporate governance encompasses achieving corporate mission or objective, law compliance, upholding code of best practices and adherence to business and personal ethics. The corporate governance could be the foundation of a better business world where fraud, malpractice, corruption could be minimised.

* CASE ANALYSIS (TO FIDDLE OR NOT TO FIDDLE):-

(a) Why is it wrong for the economic officers to make such request? The request made by Mr Lee as a district economic officer cum team leader representing the local partners, was unquestionably wrong from various perspectives. It was an action that is defined as an act of corruption of which Mr Lee attempted to utilize his power for the benefit of self-interest. The request made was generally wrong from the legal and ethical perspectives and may further...
tracking img