slide maf 680 - edited 4

DELIMA ENTERPRISECASE STUDY-1

MAF 680TEAM MEMBERS: -

•NOR AZINDA HARUN - 2008537711•NORLAILA MOHD HANAPI - 2008250586•FARHAINI ISMAIL - 2008250494•DALILA KAMARUDDIN - 2008250484•HASLINA ABDUL KARIM - 2008250542•NURUL AIN ZULKIFLI - 2008250592

Organization ChartDelima Enterprise

video

Part 1

PROBLEM SOLUTION

Timesheets are manually prepared by employees They’re record time in & out by themselvesUse traditional method Not accurateWrongly calculate & paid over

Punch cardAccess cardTime clock machine @ thumbprintSupervise time in & out of the employees.CCTV

Example

Part 2

video

PROBLEM SOLUTION

Document are not properly pre-numbered, recorded & documented

Sales invoice are manually produces & not pre-numbered.Monthly statement of account not periodically prepare – only prepare & sent to customer when payment had been long outstanding.

Document (invoice, PO,DO or etc) should be properly pre- numbered. Use latest edition of standard financial software (MYOB,USB,SAP or etc)Periodically prepare & update control accounts.

PROBLEM SOLUTION

Lack of control

Documents – not pre-number & missing.Assets – not recordedNo Supervision

Documents – serially numbered & kept properly & allow 5’S systemAssets – properly recorded & kept in a locked room. Supervision – done in regular and continuing basisManagement should review the adequacy of internal control on regular basis.

EXAMPLE

Part 3

video

PROBLEM SOLUTION

Lack of authorization of business transaction

No SOP – all decisions were made & authorized by either En Zayed or Pn HashimahPersonal vehicle expenses were charged to company.Withdrawal of company money made without proper documentation.Decision and authorization by the directors on its own without proper documentation.

All decisions should follow SOP. Expenses should be authorized by at least two person.Personal expenses can’t be charged as company expenses.Segregation of duties between person who approved & stamping the documents.Should be separated to general and specific authorization.

PROBLEM SOLUTION

Segregation Of duties

En Zayed does not exercise his duties properly as to segregate management duties equally among the employees of the company that he may thinks fits to perform such duties.

En Zayed should segregate Cik Amy’s workloads to other personnel according to the relevant job description. Example: Account Payable and Receivables should be assigned to different personnel.

Part 4

video

PROBLEM SOLUTION

Appointment of auditor

Directors not practice proper procedure to appoint auditor.

Sec. 172(1)-appoint the auditor at Annual General Meeting

Removal of auditor

Removal of auditor before the expiration of his term of office.

Under Section 172(4),(5),(6) CA 1965,Only the s/holder can remove the auditor before the expiration of his termsMust have ordinary resolution at general meeting with special notice of 28 days given to auditor

PROBLEM SOLUTION

Auditor’s duties and responsibilities

En. Zayed tried to negotiate auditor to make unqualify report

Sec 174(2) –express opinion in reportSec 174(3)- report particulars of deficiency, failure and shortcoming

Suggested Organization Chart

Delima Enterprise

CONCLUSIONS The Mission, Vision and Objective of the Company

must be clearly stated.

Informed to employees so that they know the Company’s goal.

Delima should implement standard operating procedure (SOP).

Delima should improve their internal control by provide the segregations of duties to ensure the management works efficiently and effectively. It also may avoid mishandling and reduce the mistake as well.

As a Director, three (3) elements of Fiduciary duties to be comply :-

i) Duty of loyalty ii) Duty of Care iii) Duty of Disclosure