FLAT CARGO BERHAD CASE STUDY

2096 Words Dec 3rd, 2013 9 Pages
Flat Cargo Berhad

Presented by:

Presented to:

ABDUL RAHMAN BIN YAACOB

AC088467

AFIFAH BINTI HALIM

AC088398

MAZIAH BINTI MOKHTAR

AC088445

MOHAMMAD AZWAN BIN BASHIRUN

AC088323

MOHD ZUBAIR BIN NOR AZMAN

AC086470

NABILAH BINTI SAAD

AC088349

SIR AZWAN ABD RASHID

INTEGRATED CASE STUDY ACSB 413

INTRODUCTION

Company Background
1997
Started operations with 2 aircraft
- Boeing 737-200F
- Cessna Grand Caravan
Operating Primarily
-Air cargo carrier
Principal activities of FCB
Subsidiaries
-Air Freight Service and Aircraft
Ground handling service

15 September 2001
-Obtained listing in Bursa Malaysia
Auditor
-Kenyans & Associates
In 2001 to 2004
-the have a fast growing at intra- Asian air express market
-demand for express
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Most of these transactions involved small clients.

-Overstatement of sales & may not able to collect the revenue -Fictitious revenue

-Trace sales journal entries to supporting documents, including duplicate sales invoice, bill of lading, sales order, and customer order.

-Pre-numbered invoices -Regular reconciliation A loan received from a
Hong Kong based company was found to be incorrectly recorded in debtor’s account.

-Error of principle
-Misconduct of FCB in concealing loan from stakeholders
- Loan received was recognized as a debtor to show increase in cash flow without claim against its assets.

-trace incorrect entry into debtor and creditor ledgers if the control a/c are not balance -control account
(debtors control account & creditors control account)
-FCB should adopt more transparent & ethical manner of a/cg adherence to the regulations.

Situation/Red
Flags

Potential Fraud

Several abnormal - Increase in transaction fixed assets involving the
(aircraft)
purchase of
- Decrease in aircrafts by FCB debtors and offsetting the - FCB did not debtors’ accounts want to disclose were found in the high cash
FCB’s books. outflow to investors Common Test
Procedure

Control
Procedure

-Review purchases invoice and account receivable

-Apply rules for recording revenue
& expenses are derived from the rules for owner equity A=L+OE

-These two roles shall be separated by individual -In FCB,…

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