Lighting Logistics 2y3sv

LIGHTING LOGISTICS Prepared by: Anis Shahireen Effah Atiqah Fatinah Husna Nur Fatin

Prepared for: Puan Khair Shakira Bustamam

1. IDENTIFY THE MISAPPROPRIATION OF ASSETS BY SENIOR MANAGEMENT HIGHLIGHTED IN THIS CASE. The CEO claim higher than actual travel expenses RM31,300 for February and RM22,600 in March where actual expenses RM3,000 in February and RM4,200 in March.

One of the partners of Tepat Packaging is CFO – the quote of Tepat Packaging is higher than other vendor eventhough Tepat Packaging consistently delivered bad quality materials and insufficient inventories.

2. WHAT ARE THE WEAKNESSES IN THE VENDOR SELECTION PROCESS? HOW CAN THESE WEAKNESSES BE ADDRESSED?

Delivered poor quality material

Not always have sufficient inventory for deliveries

Weaknesses Even Tepat Packaging provided the best quote as explain by CFO, but Tepat Packaging Sdn Bhd (vendor) were on average 15% higher than quotes from other vendors

because Tepat Packaging Sdn Bhd is a partnership with Lighting Logistics (CFO)

2. WHAT ARE THE WEAKNESSES IN THE VENDOR SELECTION PROCESS? HOW CAN THESE WEAKNESSES BE ADDRESSED? Recommendations •

CFO need to re-examine the vendor selection process

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Improve the visibility into the product quality

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Improve the manufacturing and distributing of the product

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Effective training for vendor by provide periodic training session, tests and awareness programs for vendor

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Make sure that all vendor are up-to-date with relevant policies, contract and regulations for reduce the nonconformity, product defects and rework costs

3. WHAT CAN BE DONE TO ENSURE THAT THERE IS TRANSPARENCY IN THE EXECUTIVE EXPENSE CLAIMS PROCESS? • Provide full disclosure of the receipts and other relevant documents for the expense claims. All expenses claims should be disclose publicly. • Provide a clear policies and processes – documents need to be signed and verified by top management. • Assign clear roles and responsibilities – segregation of duties • Comply with the professional code of ethics – integrity, objectivity, confidentiality, competency • Holding Company need to monitor Subsidiary Company – do surprise visit

4. WHAT ARE YOUR THOUGHTS ABOUT ANNA USING SOCIAL MEDIA TO GATHER INFORMATION? I think it is a good alternative to gather information Social media has become important source for investigation Social media help auditor to analyze and measure the event Give continual story through social media

5. WHAT DO YOU SUGGEST ANNA SHOULD DO IN THIS SITUATION? • Misappropriation of assets Solutions

Explanations

Review internal control system

• Evaluate the effectiveness of IC system

Conduct proactive auditing

• Search misappropriation of assets and information misrepresentation • Using CAAT techniques and data mining

Establish effective fraud prevention

• Knowing the organization’s strength and weaknesses • Provide consulting expertise

5. WHAT DO YOU SUGGEST ANNA SHOULD DO IN THIS SITUATION? • Expenses claimed by CEO Solutions

Explanations

Identify and collect more information regarding travel expenses

• Check with airplanes tickets or customer services department

Corporate governance management

• Find out there are conflict of interest and threat to independent by CEO, CFO and previous CAE

THANK YOU