Delma case

1. *A DELIMA CASE
MAF 680

2. In May 2006, the company had
secured a contract worth
RM750,000 to be implemented
over a duration of 6 months. Due
to the shortage of funds, the
company had submitted
applications to MBB and CIMB for
banking facilities totaling RM 1
million.

3. *MALAYAN BANKING
&
CIMB BANK BERHAD

4. *OFFICE

5. *JULY 2006

6. *3 WEEKS LATER

7. *QUESTIONS
Were they any
abuses of power
by the
management and
breach of
fiduciary on the
part of director?
Who should be
held responsible
and
accountable?
Could the Audit
be completed
soon without any
qualification?
What should be
done to improve
the leadership and
management of
Delima Enterprise
Sdn Bhd?

8. Section 132 of the Act provides that a director of a
company shall at all times exercise his powers for a proper
purpose and in good faith in the best interest of the
company.
(a)Duty to exercise power in good faith and in the
interest of the company.
(b)Duty to act for the proper purpose
(c)Duty to act with reasonable care, skill and diligence.

9. Negotiate with the Auditor to not
qualify the Financial Statements
Appoint a new “friendly-party”
to unqualified financial
statement.

10. Personal vehicle expenses were charged
to the company.
Several withdrawal from the company
were made without proper
documentation.
Cash advance by the director.

11. Appoint family member.
Not willing to commit and invest on
training to enhance employees.
Incomplete information and record
No standard operating procedure was not
in placed.

12. *Director
*Gain more knowledge
*Hire more experienced and
knowledgeable employees
*Reorganized business plan
i.e. prepare Standard of Operating
Procedure (SOP)

13. *Account Department
*Have knowledge on accounting standard
*Responsible to handle account of
company
*Update with the new current standard
*Make proper filing of all documentation

14. *Human Resource and
Administrative Manager
*Prepare wages in monthly
basis
*Preparation of budget
*Prepare time sheet

15. *Operational Manager
*Responsible to implement Standard
of Operating Procedure (SOP)
*Updating the software
*Authorization should be made by
Board of Director

16. *
• Most matters have been
dealt with adequately,
except for few issues.
• Arise when there is a
limitation of scope in
auditors work.
Qualified
Audit
Report
• Clean report
• All the matters have been
fully satisfy by the auditor
Unqualified
Audit
Report

17. Recommended that:
a) All matters being arose during the audit fieldwork need to
clarify by all the department.
b) All the department need to give full cooperation during the
fieldwork.
c) If all the document being kept in pre-numbered and proper
filling.

18. *
•Advertising should
include requirement
for an experience and
educated person
Appoint new
staff

19. •A weekly training
for existing worker
will help them to
gain knowledge
Provide training

20. •Encik Zayed cannot
be a director as well
as Chief Executive
Officer(CEO)
Appoint new
director