Human Governance

Company Fraud in Malaysia

Viveksarati A/L Sandrasigaran PBS1311014 Mohmad Hazar Bin Ahmad PBS1321280 Raja Mahzan Shah bin Mazlin PBS1321240

Corporate Governance: Theory, Trends and Practices

Effective Corporate Governance would reflect a number of important
features.

Promotes the efficient use of resources both within the firm and larger
economy.

Assists firms (and economies) to attract low-cost investment capital by

improving both domestic and international investor confidence.

Issues of Corporate Governance: Fraud in Companies.

Reported to the current business environment, in which when we are
pronouncing word success, the first ideas struck to mind, although sometimes unintentional, are those relating to force, most of all financial strength, even if it is achieved at the cost of breaking the rules. Effective Corporate Governance would reflect a number of important features.

Transmile Group Berhad

Incorporated in 1993 and listed on the Malaysian Stock Exchange in June 1997. Principal Activity of the business: Express Air Cargo Issue: Unsigned accounts by external auditors, lack of evidence of trade receivables
and sale and purchase of property, plant and equipments.

Cooking- of- the books: In February 2007, the board had approved an unaudited
result that had shown an 80% increase in revenue, doubled net profit, and trade receivables that had ballooned to RM381 million from RM111 million in 2005.

Transmile Group Berhad

In May 2007, special audit was conducted on the company and subsidiary
accounts by an internal forensic auditor.

Exposed: the revenue was overstated by a total of RM622 million for three
consecutive financial years from 2004 to 2006.
made.

Payments totalling RM 189 million without supporting payment vouchers

Related-party sales transactions in which the subsidiary owed to the business

more than RM103 million.

Summary
The study investigated the cooking- the-books activities undertaken by the
company mentioned above that have been dubbed as mini Enron financial scandal in Malaysia. The result of the study showed that the involvement of the top management may be because of self-indulgence, a loophole in regulatory governance, and a lower penalty imposed under the existing law.

Introduction of Human Governance

Traits of values, belief system, culture and ethics in order to foster a culture
based on trust.

Rightness-of- action by an individual is not about being right according to

some codified rules/ man made laws.

Internal moral compass being practiced, integrity can be observed. Human Governance is human centric, value based. Special to each
individuals for it is shaped by ones belief, religion, norm and culture.

Conclusion
On the basis of the goodness that human governance can bring to the
profession, the way forward is for professional accountants to begin to accept the culture of human governance as the core guiding principle for professional conduct.

Despite our conviction in the ability of this values- and principle-based

governance to bring back the meaning of integrity in the life of professional accountants, we do not posit for an abandonment of corporate governance.