...purchased by FCB in 2005. The audit team found around RM231m of non-functional rundown aircraft in hangar. This situation leads to potential fraud bcause those old aircrafts had high price tag.Thus, it will increase the holding cost or storage cost of the assets. Then, the auditor should conduct the common test procedure which includes the examination of vendors’ invoices and receiving reports. The auditor had to perform the physical examination of those assets in order to verify the existence of the assets with the records. It is a must for every purchase to have invoice or grant to verify the purchase. Besides that, for the purchase involving high value of asset, it must have approval from top level of company which is Board of Director. In case the aircraft is non-functional rundown, it must be disposed in order to eliminate the unnecessary expenses for the company. 2. There are increasing in debtors’ confirmation letters were returned. Reasons: those debtors had changed their mailing addresses. Perhaps the company had a phantom client. So, Mr. Chuah need to confirm the account receivable whether the address is updated or real address. Besides that, the company should be using positive confirmation letters. Besides, the service agreement should be reviewed & obtain the explanation from FCB. For control procedure, the auditor needs to review periodically the account receivable trial balance especially for large and unusual receivable. Another procedure need to be implemented...
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...Table of Contents Introduction……………………………………………………………………………………..1-2 Issues………………………………………………………………………………………………2 The Discovery of Fraud……………………………………………………………………..…..3-4 Corporate Governance of FCB……………………………………………………………………5 Auditor Dilemma……………………………………………………………………….……….5-7 Using the Fraud Triangle Model to analyze the situation in Flat Cargo Berhad……………..…8-9 Who is responsible in the fraud of Flat Cargo Berhad ……………………………………..…10-11 Prevention Measures for Fraud ……………………………………………………………….12-13 Detection Measures for Fraud…………………………………………………………...……14-15 Recommendation…………………………………………………………………….……….16-17 Conclusion…………………………………………………………………………...……….18-19 References………………………………………………………………………………………..19 Introduction The case is related to one company known as Flat Cargo Berhad (FCB), FCB was one of the largest air freight companies in Malaysia which servicing several government linked companies including Freight Malaysia Berhad. FCB is a listed company and was registered as an investment holding company with several subsidiaries. Among its subsidiaries are FC Spare Sdn Bhd, Cargo Management Sdn Bhd, FCB (SPV) Ltd, Cargo Air Services Sdn Bhd and FC Air Ltd. FCB started its operations in 1997 with two aircrafts: a Boeing 737-200F and a Cessna Grand Caravan. FCB’s major shareholder in 1997 had been Bangor Berhad, which was part of a diversified international family owned conglomerate, the Miri Group. On September 2001 the company was listed in Bursa Malaysia. The...
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...I. Executive Summary Flat Cargo Berhad (FCB) is a listed company that provides air cargo carrying services within the Asian region. The company owns five fully owned subsidiaries and the major shareholders of this company is Bangor Berhad. The company’s external auditor is Kencana & Associates where the audit team is led by Mr Chuah Mun Soong. On 5th February 2006, Mr Chuah has been informed by his team that there are some inconsistencies in the accounts of FCB. Therefore he has decided to do his own investigation on the company to determine is there any fraud involved before he can report the situation the managing partner of Kencana & Associates, Mr Keong Chee Wah. II. Statement of the Problem One of the issues faced by the company is the inconsistencies in the company’s accounts where they were unable to verify the aircraft that they claim have purchased in the year 2005. The auditor also found a non-functional aircraft in the hangar that does not worth much. It can be said the cause of this problem would the weakness in assets management or internal control system as well as the weakness in the accounting department where the management of the company is able to make false claims. The second issue faced is poor debt management where a lot of debt confirmation letters that were sent was returned due to the changes in debtors addresses. This can be only explained by the company’s weakness in keeping proper records of their debtors as well as their ability...
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...Overview This case is about the dilemma of an auditor, Mr. Chuah Mun Soong who has found suspicious issues that may lead to fraud upon auditing Flat Cargo Berhad (FCB). He was supposed to report to the audit committee of FCB regarding the audit outcomes. However, Mr. Chuah needed to inform the managing partner of his firm with regards to the findings on the inconsistencies of accounts in FCB. Company Background FCB Cargo Berhad (FCB) was established in 1997 operating primarily as an air cargo carrier. FCB providing freight services to the intra-Asia air market. Its services were not only limited to air freight transportation but also included aircraft charter and leasing. FCB was chaired by Dato’ Ibrahim Samad, a former Director General for the Ministry of Transportation and former President of Malaysia Chamber of Commerce. He was the company’s independent Non-Executive Director. The senior management team consist of Mr. Lim Loon Sim as the Chief Executive Officer, Mr. Ali Bin Ahmad as the Executive Director and Mr. Kim Boon Chok as the Chief Financial Officer. Mr. Ali Bin Ahmad also held the position of FCB’s Audit Committee Chairman. In terms of financial growth, FCB demonstrate a tremendous revenue growth from year 2001 to 2005. It is also recorded a 1.5 times increase in revenue amounting to RM550 million in 2005 compared to 2004 and was projected to increase further by 54% to RM809 million in the following year due to its major capacity expansion in 2005. The increase...
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...1.0 Case Summary Flat Cargo Berhad (“FCB”) was one of the largest air freight companies in Malaysia. FCB was registered as an investment holding company with several subsidiaries and the principal activities included air freight services and aircraft ground handling services. FCB’s wholly-owned subsidiaries included FC Spare Sdn Bhd, Cargo Management Sdn Bhd, FCB (SPV), Cargo Air Services Sdn Bhd and FC Air Ltd. FCB started operations in 1997 and had been an overnight air express transport service for Freight Malaysia Berhad to Singapore. Flat Cargo Group obtained listing in Bursa Malaysia on 15 September 2001. Between years 2001 to 2004, FCB’s expanded due to the fast growing intra-Asian air express market. With an array of landing rights in the Asia Pacific region, FCB was in the idea niche position to offer express air services to international integrators, freight forwarders and major airlines within the Asian region. It managed to secure major landing rights in various countries in Asia including China, Japan, Thailand, Singapore, India, Indonesia, Taiwan, Sri Lanka, Philippines, Korea, Myanmar and Cambodia. Up to 2005, FCB secured agreements with well-established companies such as Worldwide Express, United Parcel Services (UPS), Nationwide Express, Citylink, Bax Global and Nippon Express. The composition of the Board of Directors was in adherence to the Malaysian Code of Corporate Governance. The chairman of FCB was Dato’ Ibrahim Samad who was also an independent...
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...Kanan A. Jafarov Jlt, Cluster E, Global Lake View Tower, Flat No. 1307, Dubai 340581, UAE Mobile: | +97 1506 565 039 | Email: | kenan.jafarov@gmail.com | Professional Profile A dedicated and experienced business development professional with over 10 years’ management expertise within the Oil, Supply, Trade and Logistics industries. An enthusiastic and highly self-motivated individual who remains flexible to the changing demands of business environments, is able to develop and implement new initiatives with a particular talent for implementing projects to open and manage strategic supply routes within the Caspian and Black seas. Has experience with pipeline solutions, ensuring effective delivery of all contractual terms for multinational customers. Is able to think both laterally and strategically in order to produce innovative ideas and feasible plans for cost-effective solutions. Has excellent abilities in driving and motivating teams in order to deliver internal efficiencies, identifying opportunities for personnel development as required. Has a hands-on management style and effective communication skills, working with people at all levels to deliver results. Objective Now looking for a new and challenging position which will fully utilise existing skills and experiences, while enabling further career development. Career Summary 2010 – Present | Commercial / Business Development Manager, Milio International Ltd, Dubai, UAE. | * Responsible for the management...
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...Ocean Carrier Case Study Summary In order to accept the recently submitted leasing contract proposal, Ocean Carriers would have to purchase a new ship. The purchasing of a new ship is a considerable investment. We have analyzed whether or not Ocean Carriers should make this investment using Free Cash Flow and Net Present Value (NPV) analysis. Given the details of the contract, the forecasted daily time charter rates, and the costs data; we have concluded that Ocean Carriers should not accept the proposal and purchase a new ship if the company’s plan is to scrap the ship in 15 years. The NPV of this option is negative, roughly -$43,705, which means that Ocean Carriers would lose money over the life of this project. However, further analysis has concluded that operating the ship for its entire useful life, 30 years, can produce a positive NPV, roughly $2,107,016. So Ocean Carriers’ should consider taking on this proposal only if they can continue operating the ship for 30 years. *Please see assumptions and capital budget details. Answers to Case Questions 1) Spot hire rates will likely decrease in the near term, 2001 and 2002. Imports for ore look to be flat and won’t likely increase for the next two years. With 63 new capsizes scheduled for completion in 2001 there will likely be an overage of supply in the near term. Daily rates are driven by supply and demand as well as the trade patterns. With additional cargo carriers entering the fleet and depressed demand...
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...CASE 4: ACCOUNTING FRAUD AT WORLDCOM Betty Vinson: victim or villain? Should criminal fraud charges have been brought to her? How should employees react when ordered by their employer to do something they do not believe in or feel uncomfortable doing? In discussing whether Vinson should been charged with criminal fraud, it can be analyzed from ethical perspective which can truly judge whether she was morally responsible for the wrong or not. In order to determine whether Vinson was morally responsible for the fraud, these three criteria should be fulfilled first: causality, knowledge and freedom. The causality criteria can be referred as whether that individual caused or helped cause the wrong, or failed to prevent it when she could and should have. The knowledge criteria then requires the individual to did so knowing what she is doing while freedom criteria requires the individual did so own her free will before being morally responsible for causing the wrong. Examining the cause of the fraudulent activities, Vinson initially been pressured by Yates, Myers and Sullivan to aid in painting the financial result of the company only one time and assured by Sullivan that he would take full responsibility for the action. Being a senior manager worked under them and believing in Sullivan’s words, Vinson did as told accordingly. However, she decided against quitting when been asked to continually carry out the wrong as she justified herself as the main supporter of her family. Moreover...
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...ENTRY OF GOODS 2. Entry Process When a shipment reaches the United States, the importer of record (i.e., the owner, purchaser, or licensed customs broker designated by the owner, purchaser, or consignee) will file entry documents for the goods with the port director at the goods' port of entry. Imported goods are not legally entered until after the shipment has arrived within the port of entry, delivery of the merchandise has been authorized by CBP, and estimated duties have been paid. It is the importer of record's responsibility to arrange for examination and release of the goods. Pursuant to 19 U.S.C. 1484, the importer of record must use reasonable care in making entry. NOTE : In addition to contacting CBP, importers should contact other agencies when questions arise about particular commodities. For example, questions about products regulated by the Food and Drug Administration should be forwarded to the nearest FDA district office (check local phone book under U.S. government listings) or to the Import Division, FDA Headquarters, 301.443.6553. The sa me is true for alcohol, tobacco, firearms, wildlife products (furs, skins, shells), motor vehicles, and other products and merchandise regulated by the other federal agencies for which CBP enforces entry laws. Appropriate agencies are identified on page 197. Addresses and phone numbers for these agencies are listed in the appendix. Goods may be entered for consumption, entered for warehouse...
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...CASE 4: ACCOUNTING FRAUD AT WORLDCOM Betty Vinson: victim or villain? Should criminal fraud charges have been brought to her? How should employees react when ordered by their employer to do something they do not believe in or feel uncomfortable doing? In discussing whether Vinson should been charged with criminal fraud, it can be analyzed from ethical perspective which can truly judge whether she was morally responsible for the wrong or not. In order to determine whether Vinson was morally responsible for the fraud, these three criteria should be fulfilled first: causality, knowledge and freedom. The causality criteria can be referred as whether that individual caused or helped cause the wrong, or failed to prevent it when she could and should have. The knowledge criteria then requires the individual to did so knowing what she is doing while freedom criteria requires the individual did so own her free will before being morally responsible for causing the wrong. Examining the cause of the fraudulent activities, Vinson initially been pressured by Yates, Myers and Sullivan to aid in painting the financial result of the company only one time and assured by Sullivan that he would take full responsibility for the action. Being a senior manager worked under them and believing in Sullivan’s words, Vinson did as told accordingly. However, she decided against quitting when been asked to continually carry out the wrong as she justified herself as the main supporter of her family. Moreover...
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...1.0 Introduction Flat Cargo Berhad (FCB) is an air freight services and ground handling company. Its company’s operations cover Asian Pacific region including China, Japan, Thailand, Singapore and many more. Their main customers are United Parcel Services (UPS), City Link and Nationwide Express. The main shareholder for FCB is Bangor Sdn Bhd which is part of Miri Group represented by 26.5% of the company interest. Kencana & Associates is the auditor company that audit FCB’s account. The leader of the auditors is Mr Chuah Mun Soong. The auditing team found some irregularities in accounting record of FCB. There are two parties which Mr Chuah has to report, they are his superior, Mr Keong Chee Wah and FCB Audit Committee. However, Mr Chuah concerns that FCB might have a fraud due to the past experience such as Media Com and Blue Vital. 2.0 The Root Cause of the Problems As per our discussion about this case study, we managed to find out several root cause of the problems. 2.1 Rising of Oil Price The first root cause is the rising in oil price in the year 2005. In the year 2005, there was an international crisis occurred with the exceptional increase in oil prices. The hike started in mid-2004 at US$40 per barrel but eventually, the increase continued to stages of US$50, US$60, US$65, US$70 and US$80 per barrel. The price hike in fuel surcharges drastically affected the freight forwarding industry significantly because of its reliance on fuel for operations. This...
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...| |2014 | | | | | |Submitted to: | | |TAKRIMA SAYEDA | | |Lecturer | | | | | |University Of Dhaka | | | | | | | | |Course: THM 325 | |[BANGLADESH RAILWAYS – THE LIFE LINE OF THE COUNTRY] | | | | | |Prepared By: GROUP – ‘Knockout Knights’ | | | Group name : `Knockout Knights` Course code : THM - 325 Member’ |Name ...
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...[pic] ASSIGNMENT OF ECONOMICS FOR MANAGERS SUBMITTED TO:- LECT.POOJA KANSRA COURSE NO.ECO-519 SUBMITTED BY:- RAHUL MITTAL CLASS: M.B.A (TWINNING) BATCH:-2010 ROLL NO:-RQ1010A26 Pantaloons India Pantaloons India is one of the leading retailer stores of India, which operates numerous formats of retail both in the lifestyle and value segment of the consumer market in India. The company has its headquarters in Mumbai and operates more than 12 million sq. feet retail space, with more than 1000 stores transversely in 71 Indian cities as well as employs more than 30, 000 people. Pantaloon India is the subsidiary company of the Future Group, which is considered as a business venture providing the needs and requirements of the Indian market niche. Achievements by Pantaloons India Pantaloons India Retail Ltd. was the foremost business venture to introduce its departmental store concept for whole family, which was established in 1997. Pantaloons India was the only company to launch Big Bazaar, which is considered as a hyper market chain in India. Big Bazaar is a subsidiary...
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... Despite recessionary conditions, traffic handled at major ports has grown on an average by 5.7% in the year 2009-10, over the year 2008-09. However, ports like Haldia (-20.4%), Ennore (-6.9%) and New Mangalore (-3.2%) are few of the main ports that witnessed negative growth in 2009-10. Nevertheless, most of the ports have not achieved their target for the year 2009-10. Mormugao (8.5%), Tuticorin (8.1%) Mumbai (2%), Kandla (2%), and Paradip (1.8%) were the only ports which achieved their growth target for 2009-10. Haldia (-22.1%) and Ennore (-14%) were the two ports which showed huge variation in traffic compared to the traffic targeted in 2009-10. It has been the endeavour of Government of India to consistently enhance the cargo handling capacity of the major ports keeping in view the projected traffic for the country. The aggregate capacity in major ports as on 31.3.2009 was 574.77 MTPA. Major cargoes handled at Indian...
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...Term paper on “The Airline Industry in Bangladesh : A management Colosseum” Faculty of Business Studies Bangladesh University of Professionals (BUP) The Airline Industry in Bangladesh : A management Colosseum Submitted to Major General (Retired ) Professor Alauddin M A Wadud,BP Course Instructor, Strategic Management Faculty of Business Studies Bangladesh University of Professionals (BUP) Submitted by 1. Priodarshine Auvi (EV1202026) 2. Mohammad Abdul Momin (EV1202027) 3. Kazi Kamrul Alam (EV1202029) 4. Mahbubur Rahman (Ev 1202028) 5. Maruf Hossain (Ev 1202014) LETTER OF TRANSMITAL Aug 27, 2013 Major General (Retired ) Professor Alauddin M A Wadud,BP Course Instructor Strategic Management Faculty of Business studies Bangladesh University of Professionals (BUP) Subject: Submission the term paper of “The Airline Industry in Bangladesh: A management Colosseum” Dear Sir, With due respect and humble to inform you that it is my pleasure to submit this report on“The Airline Industry in Bangladesh: A management Colosseum”. As your valuable suggestions and guidance, we have tried my best to prepare the report properly. There may be some shortcomings. We would be grateful if you consider those as excusable points and we like to thank you for your kind cooperation. Despite the limitations, we sincerely believe that you...
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