ICS Summary Flat Cargo Berhad
Flat Cargo Berhad: An Auditor’s Conundrum
Flat Cargo Berhad (FCB) a well-known and one of the largest air freight companies in Malaysia that operate as air cargo carrier. FCB also registered as an investment holding company with several subsidiaries that operate with the same operating principal of the FCB. Their primary operating principal was to provide air freight transportation which includes air charter and leasing. Started their operation in 1997 and became the only dedicated Intra-Asian overnight express cargo based in Malaysia. The company also had access to an international cargo complex at the Sultan Abdul Aziz Shah Airport in Subang. FCB also have secured agreement with well-established companies. FCB had appointed Kenchana & Associates as their external auditor. In 2006 audit team from Kenchana & Associates found several suspicious finding in finalizing their report. It is also said that FCB can remained as the nation’s leading cargo carrier if not because of the scandal.
Mr Chuah Mun Soong, head of the audit team from Kenchana & Associate, is the decision maker or protagonist in this case. Been informed by his subordinate, he show some dissatisfaction towards the FCB due to the scandal. He needs to present the financial report to the audit committee of FCB in two weeks. However, the inconsistencies in the account make him feel restless.
Dilemma face by Mr Chuah is that the FCB also might be high possibility involved in fraud. Mr Chuah state that his firm cannot deal with their clients scandal much more because it might effecting their reputation if FCB proven to really involve in fraud.
The major issues in this case stated as follows:
The auditors were unable to verify the aircrafts claimed to have been purchased by FCB in 2005. The audit team found a non-functional rundown aircraft barely worth RM231 million in a hangar.
Several debtors’ confirmation letters were returned because the addressees had changed their mailing addresses.
A large sum of
Flat Cargo Berhad (FCB) a well-known and one of the largest air freight companies in Malaysia that operate as air cargo carrier. FCB also registered as an investment holding company with several subsidiaries that operate with the same operating principal of the FCB. Their primary operating principal was to provide air freight transportation which includes air charter and leasing. Started their operation in 1997 and became the only dedicated Intra-Asian overnight express cargo based in Malaysia. The company also had access to an international cargo complex at the Sultan Abdul Aziz Shah Airport in Subang. FCB also have secured agreement with well-established companies. FCB had appointed Kenchana & Associates as their external auditor. In 2006 audit team from Kenchana & Associates found several suspicious finding in finalizing their report. It is also said that FCB can remained as the nation’s leading cargo carrier if not because of the scandal.
Mr Chuah Mun Soong, head of the audit team from Kenchana & Associate, is the decision maker or protagonist in this case. Been informed by his subordinate, he show some dissatisfaction towards the FCB due to the scandal. He needs to present the financial report to the audit committee of FCB in two weeks. However, the inconsistencies in the account make him feel restless.
Dilemma face by Mr Chuah is that the FCB also might be high possibility involved in fraud. Mr Chuah state that his firm cannot deal with their clients scandal much more because it might effecting their reputation if FCB proven to really involve in fraud.
The major issues in this case stated as follows:
The auditors were unable to verify the aircrafts claimed to have been purchased by FCB in 2005. The audit team found a non-functional rundown aircraft barely worth RM231 million in a hangar.
Several debtors’ confirmation letters were returned because the addressees had changed their mailing addresses.
A large sum of