Flight Of Fund

 Flight Of Fund Article

п»їTABLE OF CONTENT

Chapter

Topic

Pages

1 . 0

Introduction

you

2 . zero

Problems you: Lack of internal control

2 . you Root Triggers

2 . a couple of Recommended Solutions

2

2

4

3. 0

Challenges 2: Conflict of interest

3. you Root Triggers

3. 2 Recommended Alternatives

5

6

7

four. 0

Problems 3: Unclear leadership and poor administration

some. 1 Underlying Causes

5. 2 Suggested Solutions

almost 8

8

9

5. 0

Problems some: Poor records

5. 1 Root Triggers

5. two Recommended Alternatives

10

12

11

6. 0

Best answer

11

several. 0

Conclusion

13

Referrals

15

1 . 0 INTRO

In 2010, Mr. Idris was hired as the Chief Procedure Executive (CEO) of Travelling Investment Loge Berhad (TIH), a government linked organization (GLC) in logistics and travel related business. The first process as the CEO of TIH was to identify methods to recover the losses from the company because of the economic crisis in 2009. In order to diagnosis the problem, Mister. Idris required a meeting between senior managements. He learned that there is no-result investment made by one of the subsidiaries, Malaysian Travels Sdn Bhd (MTSB).

In 2006, MTSB had a joint ventures with Turkistan Global Services Sdn Bhd (TGS) to form a new entity, Malaysian Turkistan Travelling Sdn Bhd (MTT), in the purpose of discovering travel business opportunities in Turkistan. In this entity, MTSB holds 40% in the shares whereas the others held by TGS. However , there were no progress after the creating of MTT. He remembered that his friend, Norehan who had performed in MTT before. The lady told Mister. Idris which the company could have been established under fraudulent circumstances and the staff's morale was very low as a result of late earnings payment.

Consequently , Mr. Idris decided to have got a detailed analysis on MTT by outsourcing to exterior auditor, Mister. Agoos Bagoos. During research, Agoos found that MTSB only a new few personnel and the firm operations were severely cut down due to not enough funds. Besides, there were simply no relevant papers related to expense in MTT and MTSB did not include any efforts to contact MTT to enquire any kind of documents.

Depending on the Nota of Understanding (MoU), MTSB paid RM8 per reveal for 100, 000 models to symbolizes its 40% shareholding in MTT. Throughout the investment, Agoos realized that MTT's paid up capital have increased via RM two to RM 250, 500 on This summer 2006 and there were simply no audited accounts had been granted to shareholders, nor virtually any filing constructed with Companies Commision of Malaysia (CCM). In order to solve these problems, the basis causes of the down sides are recognized and alternatives are recommended in this analyze.

2 . 0 PROBLEM 1: DEFICIENCY OF INTERNAL CONTROL

2 . you Root cause

There are several root triggers to this issue. First is a misconception of association and joint venture. In such a case, MTSB features mistaken MTT as its relationship rather than partnership. The main difference between joint venture and affiliation is in conditions of control. Based on IAS 28- Purchases of Associates and Joint Endeavors, an association is usually an enterprise over which a real estate investor has significant influence in the investee, but is not control or joint control of those guidelines. As for partnership, it is a joint arrangement whereby the functions that have joint control of the arrangement possess rights to the net assets with the arrangement.

On the other hand, internal controls will be the mechanism implemented in a business to protect its assets, ensure the accuracy and reliability and dependability of the economical information, make sure compliance using financial detailed requirements, achieve operational efficiency and generally assist in achieving organisation’s objectives. The many types of controls, deal with the risks to an organization. В In accounting controls, the purposes contain to ensure economical transactions are properly official and reported, access to assets is properly authorized, economic statements are prepared correctly and recorded property are regularly compared and reconciled with existing resources....