First and first, an auditA as defined by Investor Words is an independent assessment performed by an independent expert of an activity or event. There are a few different sorts of audits, e.g. operational, proficient, ecological. To lucubrate, an audit means that a company ‘s fiscal records, accounting records and back uping paperss are examined and verified by employees of the organisation ( internally ) or by an outside house ( externally ) . A procedure of obtaining and measuring grounds shows that audit is both an fact-finding and describing procedure. ( Zachariah, Musa, 2012 )
An in-depth analysis of the nature of an audit shows that it is the accretion and rating of grounds about information, and so to do a determination based upon the grade of correspondence between the information and established standards. As it critical to the fundss of an entity, an audit should merely be done by a competent and independent individual. Caution is taken to forestall a teller or book-keeper from defalcating the money. As surveies show, the morale consequence has prevented larceny in many instances and is a more powerful point in favour of audit. ( McCann, Donald C, 1973 )
In short, Auditing is normally performed to guarantee that the company ‘s fiscal statements are consistent with the company ‘s fiscal minutess. After a thorough analysis of the company ‘s fiscal statements, the hearer will do a study and give a professional judgement about whether the statements are satisfactory and in conformity with accounting rules and criterions.
B ) The Differences between Accounting and Auditing.
Auditing Begins where accounting terminals. On the other manus, accounting starts when book-keeping ends. The procedure of accounting is to supply more inside informations about the economic activities and the position of the assets and liabilities of an entity. This procedure is done by making and fixing fiscal statements and other related fiscal information. Once completed, it will demo up the company ‘s hard currency flow and working capital to allow the company derive a better understanding about their fiscal state of affairs. This is done to guarantee the stableness of the company. ( Messeir, Glover & A ; Boh, 2007 )
Conversely, scrutinizing does non make any fiscal statements. It is an independent scrutiny of the accounting informations in a systematic manner to look into whether the statements are reasonably presented. Auditing can besides increase the credibleness of those fiscal statements.
Auditing provides confidence that the information is true and gives an sentiment in the audit study while accounting discoveries out the trading consequences. As an hearer of fiscal statements, one needs to understand the accounting procedure clearly to gauge the audit grounds. As an comptroller, one does non necessitate scrutinizing cognition and usually it merely involves the care of books of histories. ( Messeir, Glover & A ; Boh, 2007 )
In add-on, audit grounds is gathered from accounting studies and paperss. This grounds is to guarantee the company ‘s economic activities run into authorities ordinances which go beyond books of history. An hearer will gauge the company ‘s fiscal statements to see whether it matches up with the fiscal coverage model criterion.
C ) The Objective of Auditing and Why It Is Needed.
Harmonizing to the jurisprudence, scrutinizing is compulsory for a company. The primary aim of scrutinizing is to describe to the proprietors whether the company provides a true and just fiscal statement to reflect the company ‘s state of affairs for the fiscal old ages. The fiscal statements normally refer to the balance sheet, net income and loss history and hard currency flow statement.
Apart from that, fiscal statements that have been audited are considered dependable allows the company to hold a greater entryway to plus, finance and other recognition lines.
The secondary aim of scrutinizing is to happen out the mistakes and fraud and to forestall them. ( Kamal Gupta, 2005 ) Fraud is the knowing deceit of fiscal information such as use of histories, embezzlement of hard currency or goods. On the other manus, mistakes refer to unwilled error in fiscal information. Fraud and mistakes are common since it will misstate a company ‘s fiscal place.
Another utile characteristic of auditing is that it helps the company to analyse the system and maintain record. This is to guarantee the company has the chance to cut down hazard, and to avoid any loss in the hereafter. When a company is confronting fiscal jobs, they can procure loans easy after acquiring their histories audited by qualified hearers. ( B.N. Tandon & A ; S.Chand, 2006 )
Furthermore, scrutinizing is needed to corroborate whether the studies prepared by the company ‘s director fit the contract proviso. Last, it brings benefit when paying the company revenue enhancement ; the revenue enhancement governments accept the audited history for appraisal of revenue enhancements. Therefore, scrutinizing avoids the demand for farther inquest from the revenue enhancement section, which in bend reduces the concerns of the company.
D ) Differences between the Role of Internal Auditors and External Auditors.
The Institute of Internal Auditors describes internal auditing as a self-regulating, indifferent confidence and consulting activity. Internal auditing is designed to assist better the operations of a company by guaranting an orderly controlled attack to measure and cut down hazard, therefore increasing control over the company. This in bend helps an organisation to put marks and achieve ends.
In contrast, an external hearer checks the fiscal statements of the company and gives his ain independent sentiment. External scrutinizing includes whether the statements follow the Financial Reporting Standards, whether they show the organisation ‘s fiscal place reasonably, whether the net incomes and losingss of the company are represented exactly, and whether any meddling had been done to the fiscal statements. ( Lal Balkaran, 2008 )
Internal hearers are an of import portion of the organisation – their chief clients are the direction and the board of managers. Although internal hearers of the yesteryear have reported to the CEO of the company or other senior managers, presents, internal report their findings to the audit commission.
Conversely, external hearers are hired by the organisation ; they are non a portion of it. The aims of external hearers are set chiefly by legislative act and by their chief client, the board of managers.
By and large, internal audit maps are non mandatory for organisations, it is non lawfully required. Therefore, companies or organisations can take whether to engage internal hearers or non.
An external audit is a must for most corporations, particularly those publically traded on the stock exchange. External audits are besides compulsory for some authorities bureaus ; hence, authorities hearers are required to subject the audit study to their corresponding legislative assembly.
Internal hearers do non needfully necessitate the proper makings ; employees i.e. comptrollers and direction forces with a comprehensive cognition of the company ‘s operations and have gathered experience that makes them suitably qualified to make internal auditing. Ultimately, it is up to the determination of the employer to take the internal hearers.
External hearers are required to be decently trained to observe mistakes and little abnormalities. Apart from that, they besides have to plan audits which are able to observe the fundss of the company with sensible truth, and describe their findings. In the bulk of states, hearers of publicly owned companies are required to be members of a organic structure of professional comptrollers whom are recognized by the law.A ( Lal Balkaran, 2008 )
Internal hearers frequently view the appraisal of hazard as one of the chief precedences. This is because hazard appraisal will impact the planning of the company. Therefore, an internal hearer will measure hazard combined with other information, such as fiscal and operational information.
External hearers will merely see the fiscal facets of hazard. An external hearer uses the information of hazard to find the clip period necessary for the audit, and besides the processs needed. ( A. Pop, C. Bota-Avram, F. Bota-Avram, n.d. )
Tocopherol ) Importance of Audit to the Users of Fiscal Statements.
Internal and external users i.e. directors and investors need dependable information. This is because it is of import for them to find whether the company is trusty, and how a company affects the overall concern industry to do the concluding determination.
Auditing helps the users to guarantee the information is relevant, supply an external expression at the accounting operation, and the overall financial wellness of a publically held company. Furthermore, proper audits can increase the users assurance and besides can pull more investor to foster the investing. The users can hold a clear position about the company ‘s fiscal state of affairs of the company through fiscal statements. Besides, an audited fiscal statement is harmonizing to the demands of a assortment of users to avoid prejudice against another group ( Gramling, Rittenberg & A ; Johnstone, 2010 ) . Auditing Acts of the Apostless as an scrutiny which can look into on employees from perpetrating defalcation. Through auditing, the hearers would guarantee that proper revelations are made in the fiscal statements therefore, guaranting there ‘s a better alliance of information between the direction and the users of fiscal statement.
F ) Discuss the types of audit and supply ONE ( 1 ) illustration for each type.
The general definition of an audit refers to an scrutiny and confirmation of a company ‘s fiscal and accounting records and back uping paperss. Auditing is done by a professional such as a Certified Public Account ( “ Audit, ” n.d. ) . Harmonizing to the Oxford English Dictionary ( 9th ed. ) , audit is defined as an official review of an organisation ‘s history.
There are a figure of types of audits that are available i.e. conformity audits, operational audits, fiscal audits and forensic audits. A conformity audit is conducted to find whether an organisation is following established processs, regulations and ordinances ( “ Auditing, ” n.d. ) . In others words, it is a reappraisal of an organisation ‘s fiscal records to find whether the organisation follows the specific processs set by an authorization. A conformity audit is normally conducted by a regulative bureau, organisation or a 3rd party. ( S.W. Teppler 2003 )
For illustration, an organisation employs an outside adviser to execute a conformity audit to run into governmental demands in order to obtain an operating licence. Conformity audits are besides done to find whether bank demands for a loan continuance have been met. Besides, conformity audits are done by territory schools following the processs set by higher authorities governments.
Operational audits are designed to prove the processs and internal systems of an organisation. Once conducted, operational audits will find how those processs will impact the organisation. Operational audits besides step conformity with policies and processs every bit good as applicable Torahs and ordinances ( Daher, D. L. , 2005, p.8 ) . Furthermore, an operational audit can mention to an organized trial of effectivity and efficiency of resource use. Therefore, it evaluates the operating processs of an organisation. Operational audits are besides known as public presentation audits or direction audits.
The primary undertaking of an operational hearer is to set up public presentation, express sentiment on criterions and standards for appraisal, and place countries for betterment. Generally, operational hearers focus on public presentation and betterment. For illustration, an operational audit will measure the organisation ‘s computerized paysheet system ; the audit will find whether the system is working expeditiously and efficaciously.
Fiscal audits are designed to formalize the truth and completeness of records and history balances. A fiscal hearer will find whether the fiscal statements of an organisation ‘s maps, activities or sections reasonably represent its fiscal place. The consequences of operations, alterations in hard currency flow and fiscal place of the auditee must be in conformity with the Generally Accepted Accounting Principles ( Daher, D. L. , 2005, p.8 ) . Generally, fiscal audits are chiefly about the readying of full set of fiscal statements and the rating of grosss and disbursals of the organisation. The audit is to guarantee that those fiscal statements comply with the Torahs and ordinances set by the Malayan Accounting Standards Board ( MASB ) and fiscal coverage model.
Public accounting houses provide fiscal audits with a true and just position of an organisation ‘s fiscal unity. Hence, audits need to province whether an organisation ‘s fiscal statements are accurate and dependable. For illustration, internal hearers are required to detect the fiscal statements and records of an organisation. At the same clip, external hearers are besides needed. Those external hearers are normally employed from the Big Four i.e. Ernst & A ; Young, KPMG, PricewaterhouseCoopers, and Deloitte.
A forensic audit is an rating or trial of a company ‘s fiscal information for usage in tribunal as grounds. Harmonizing to the Auditing and Assurance Services in Malaysia, a forensic audit is frequently conducted to obtain or develop information as legal grounds or for usage by adept informants in the tribunals of jurisprudence ( Messier, Glover, Prawitt & A ; Boh, 2007, p.50 & A ; 51 ) . Furthermore, a forensic audit is conducted to understand the accounting records and demo the true nature of the minutess being recorded ; it requires measuring fiscal information to be used in legal proceedings. Therefore, a forensic audit is done to obtain and develop information in conformity with the rules of jurisprudence and concern.
Forensic audits are frequently conducted when fiscal issues are present. Forensic audits are needed most during instances of carelessness or consider misconduct ; it is used to find the effects of concern economic losingss, stockholders and partnership differences, and concern or employee fraud. For illustration, the forensic audits deter employees from moving against the jurisprudence while executing their several undertakings, particularly when covering with fiscal statements and studies. Besides, forensic audits can be performed by internal hearers economic experts, certified public comptrollers and chartered comptrollers.
G ) The Meaning of ‘True and Fair View ‘ .
A qualified hearer should be able to show a true and just position sentiment or ‘present reasonably, in all material respects ‘ of the fiscal statements in conformity with the identified fiscal coverage model. This will heighten the credibleness of fiscal statements.
Harmonizing to Merriam-Webster ‘s lexicon, the word ‘TRUE ‘ have the same significance as the word ‘FACT ‘ ; it means that it is something which contains grounds and there is cogent evidence of its being. In scrutinizing, a ‘TRUE ‘ fiscal statement is free from material misstatement and everything should be grounds based.
On the other manus, the word ‘FAIR ‘ agencies free from prejudice. In scrutinizing, it means that the hearer ‘s determination must be sensible ; the fiscal statement is objectively presented, free from direction prejudice, and relevant to the demands of users.
As a decision, ‘true and just ‘ means that, in the hearer ‘s sentiment, the company ‘s fiscal statements offer a true and just position of its existent fiscal place, and that any premises they include are sensible.
( H ) Categories of Audit Report
There are four classs of audit study i.e. unmodified/unqualified sentiment, qualified sentiment, disclaimer sentiment and inauspicious sentiment.
An unmodified/unqualified sentiment is the most complete type of scrutinizing study, it shows that the comptroller is able to entree the fiscal information of the company, and that the information complies with the Generally Accepted Accounting Procedures ( GAAP ) . ( Henderson, K.J. , n.d. ) Therefore, the fiscal statements said to be in conformity with the fiscal accounting criterions and other mandatary coverage demands. ( Leung, Coram, Cooper, 2007 ) Harmonizing to John E. McEnroe and Stanley C. Martins, ‘the unqualified audit study provinces that the fiscal statements of a company present reasonably, in all stuff facets, the fiscal place of that company at the terminal of a given twelvemonth, in conformance with Generally Accepted Accounting Principles. ‘ The aim of an unmodified hearer ‘s study is to clear up the confidence by the hearer ‘s sentiment, and to give users a better understanding about the work done by the direction of the company. ( Marquis C. , n.d. )
A sample infusion of an unmodified sentiment by the Hong Kong Institute of Certified Public Accountants is as follows:
We have audited the fiscal statements of ABC Limited ( “ the Company ” ) set out on pages… … .. to… … .. , which comprise the [ balance sheet ] [ statement of fiscal place ] as at 31 December 201X, and the [ [ income statement ] [ statement of comprehensive income ] statement of alterations in equity ] [ statement of income and retained net incomes ] and [ hard currency flow statement ] [ statement of hard currency flows ] for the twelvemonth so ended, and a sum-up of important accounting policies and other explanatory notes.
A qualified sentiment is a type of study which is issued merely when the comptrollers are non wholly satisfied about all facets of the company ‘s fiscal position. For case, some peculiar records may be misplaced, or a part of information may non be up to day of the month with the Generally Accepted Accounting Principles. In some state of affairss, the comptroller may still be able to entree the information but the information may non be to the full validated. Consequently, the jobs are recorded as they will do the comptroller ‘s judgement more inappropriate. However, the construction of qualified study is similar with the unqualified study, but it will hold an emphatic portion in an extra paragraph to do a clearer statement about the account for the making. ( Henderson, K.J. , n.d. )
A sample infusion of a qualified sentiment by the Hong Kong Institute of Certified Public Accountants is as follows:
In our sentiment, except for the effects of such accommodations, if any, as might hold been determined to be necessary had we been able to fulfill ourselves as to hard currency gross revenues, the fiscal statements have been decently prepared, in all stuff respects, in conformity with the SME-FRS. [ In add-on, in our sentiment, except for the effects of such accommodations, if any, as might hold been determined to be necessary had we been able to fulfill ourselves as to hard currency gross revenues, the balance sheet together with the notes thereon is decently drawn up so as to exhibit a true and right position of the province of the Company ‘s personal businesss as at 31 December 201X harmonizing to the best of our information and accounts given to us, and as shown by the books of the Company. ]
.
A disclaimer sentiment is prepared merely when hearers are non able to organize an accurate audit study which may be due to the refusal of the company to show their fiscal statements. In short, when there is non adequate clip or information available, a disclaimer sentiment study is prepared. This is a really rare instance, as an hearer will merely prosecute this type of study if the company reluctant to unwrap certain information or if the auditing house and the company terminates their contract. In add-on, a disclaimer sentiment gives merely a small information about the auditing process which includes an account paragraph. The hearer will besides give a ground explicating why the fiscal position could non be determined. ( Tyler L, n.d. )
A sample infusion of a disclaimer sentiment by the Hong Kong Institute of Certified Public Accountants is as follows:
Because of the significance of the affairs described in the footing for disclaimer of sentiment paragraph, we do non show an sentiment on the fiscal statements as to whether they have been decently prepared, in all stuff respects, in conformity with the SME-FRS. [ In add-on, we do non show an sentiment on the balance sheet together with the notes thereon as to whether they are decently drawn up so as to exhibit a true and right position of the province of the Company ‘s personal businesss as at 31 December 200X harmonizing to the best of our information and accounts given to us, and as shown by the books of the Company. ]
An inauspicious sentiment is the worst type of fiscal study that can be issued to a company. If the company ‘s fiscal study is given an inauspicious sentiment, this can merely
signify that the company ‘s fiscal information does non follow with the Generally Accepted Accounting Principles. In add-on, the fiscal information provided by the company has been falsified or are in other manner inaccurate. Although this may be caused by human mistake, it is frequently an grounds of fraud. A concern must do amendments to its fiscal statement and have it re-audited, or stakeholders will by and large decline to accept it. ( Henderson, K.J. , n.d. )
A sample infusion of an inauspicious sentiment by the Hong Kong Institute of Certified Public Accountants is as follows:
In our sentiment, because of the significance of effects of the affairs described in the footing for inauspicious sentiment paragraph, the fiscal statements have non been decently prepared, in conformity with the SME-FRS. [ In add-on, in our sentiment the balance sheet together with the notes thereon is non decently drawn up so as to exhibit a true and right position of the province of the Company ‘s personal businesss as at 31 December 201X harmonizing to the best of our information and accounts given to us, and as shown by the books of the Company. ]
The study formats used are similar for the four sentiments. The ground for the similarity is to command the effects of the fortunes of the audit study. If an single format is used for each of the sentiments, it will be hard to find which differences were due to the differing fortunes environing the making. ( G. Holt, P. Moizer, 1990 )
I ) Class of Audit Report Issued to British American Tobacco ( Malaysia ) Berhad and AHB Holdings Berhad based on the Companies ‘ Financial Statements
The classs of study that an hearer is able to give to a company are one of these four- Unqualified Opinion, Qualified Opinion, Disclaimer Opinion and Adverse Opinion.
When showing an unqualified sentiment, the hearer will province that the fiscal study gives a ‘true and just position ‘ or ‘presents reasonably ‘ , in all material facets. Apart from that, the hearer will besides province that the fiscal statement is in conformity with the applicable fiscal coverage model, e.g. The Financial Reporting Standards in Malaysia. A modified hearer ‘s study is issued when the audit sentiment is qualified or when it is appropriate for the hearer to pull attending to or stress a affair that is relevant to users. ( Sylvia Barrett, 2004 )
The hearers ‘ sentiment refers to the fiscal statements as a whole. Although the audit scrutiny is performed point by point, the hearer must see whether the overall feeling created by the company ‘s fiscal statements is consistent with the hearers ‘ cognition of the company and its fiscal place. ( Sylvia Barrett, 2004 )
The two instance illustrations are as follows:
British American Tobacco ( Malaysia ) Berhad
Harmonizing to the Basis of Opinion paragraph, the hearers have been ‘performing processs to obtain audit grounds about the sums and revelations in the fiscal statements ‘ . The hearers besides ‘evaluate the rightness of accounting policies used and the rationality of accounting estimations made by the managers, every bit good as measuring the overall presentation of the fiscal statements. ‘
Therefore, after carry oning the audit of the company, the hearers have given British American Tobacco ( Malaysia ) Berhad an unqualified sentiment. This is because harmonizing to the hearers ‘ sentiment, ‘the fiscal statements of the Company have been decently drawn up in conformity with Financial Reporting Standards in Malaysia and the Companies Act, 1965. ‘ Furthermore, harmonizing to the hearers ‘ sentiment, the fiscal statements give a true and just position of the fiscal place of the group and the company.
As a consequence, the hearers have the sentiment that British American Tobacco ( Malaysia ) Berhad has fiscal statements that present reasonably, in all stuff facets, the fiscal place and the consequences of operations and hard currency flows of the company is in conformity with the applicable coverage criterions.
AHB Retentions Berhad
Harmonizing to the Basis of Opinion paragraph, it was stated that
notwithstanding the impairment loss on trade receivables amounting to RM20,950,845 as disclosed in Note 16 to the fiscal statements, trade receivables of the Group amounting to RM2,065,362 hold been long outstanding and were non impaired. Minimal or no payment was received from these receivables as at the day of the month of this study. In the absence of any documental grounds and alternate audit processs, we are unable to obtain sufficient appropriate audit grounds to determine the recoverability of theabovementioned balances.
In short, the hearers were dubious that the trade receivables could be recoverable by the company.
Therefore, after carry oning the audit of the company, the hearers gave AHB Holdings Berhad a qualified sentiment. The hearers mentioned that the fiscal statements have been decently drawn up in conformity with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and just position of the fiscal place of the Group and of the Company except for the affairs described in the Basis for Qualified Opinion.
In decision, we find that the audit studies for British American Tobacco ( Malaysia ) Berhad and AHB Holdings Berhad are rather similar. The hearers stated that both companies have fiscal statements have been decently drawn up in conformity with Financial Reporting Standards and the Companies Act 1965. However, the lone difference is that in the instance of AHB Holdings Berhad, the affair of the trade receivables of the company has led the hearers to believe that it has affected the fiscal coverage of the company. As a consequence, a Qualified Opinion is given to AHB Holdings Berhad while an Unqualified Opinion is given to British American Tobacco ( Malaysia ) Berhad.
J ) Unaudited Fiscal Statements and the Circumstances or Conditions under Which It Can be used.
Unaudited fiscal statements are accounting statements that have non been inspected by hearers for preciseness. One of the grounds why unaudited fiscal statements are used is because fiscal statements by and large help to construct up visual aspect of corporate executives being confident when talking to stakeholders and journalists. Therefore, when audited fiscal statements are non available, the unaudited 1s act as backup for the corporate executives to utilize.
Be that as it may, an unaudited fiscal statement frequently bears some disagreement from the audited fiscal statement, being that audited fiscal statement are ever more dependable than the unaudited 1s. A great hazard of fraud frequently comes with an unaudited fiscal statement, as no corporate referee has checked the fiscal statement for fraud. Although scrutinizing does non extinguish such hazard wholly, it will assist to cut down the frequence of fraud.
Stakeholders should non obviously rely on the unaudited fiscal statements, they should compare both audited and unaudited fiscal statement in the procedure of doing the wisest determination. However, corporations use unaudited fiscal statements for a different ground. Corporations may utilize the unaudited fiscal statements in a loan application process or during the due diligence portion of a company development intent, such as during a amalgamation, procurance or joint venture. Due diligence means inspecting a company or an single earlier authorized a contract or acquisition of a company.
Business spouses, such as providers and contractors, besides request impermanent fiscal statements to mensurate a company ‘s fiscal status. A good fiscal statement issued by the company, albeit unaudited, may promote other concern spouses to carry on concern activities with them. Furthermore, these statements allow commercial Alliess to find a company ‘s top-selling goods, and concentrate on companies that give them the highest returns on their money.
Appendix
Report on the fiscal statements- British American Tobacco ( Malaysia ) Berhad
We have audited the fiscal statements of British American Tobacco ( Malaysia ) Berhad on pages 141 to 203 which comprise the balance sheets as at 31 December 2011 of the Group and of the Company, and the statements of income, comprehensive income, alterations in equity and hard currency flows of the Group and of the Company for the twelvemonth so ended, and a sum-up of important accounting policies, as set out on pages 151 to 163 and other explanatory notes, as set out on Note 1 to 31.
Directors ‘ Duty for the Financial Statements
The Directors of the Company are responsible for the readying of fiscal statements that give a true and just position in conformity with Financial Reporting Standards in Malaysia and the Companies Act, 1965, and for such internal control as the managers determine are necessary to enable the readying of fiscal statements that are free from material misstatement, whether due to fraud or mistake.
Hearers ‘ Duty
Our duty is to show an sentiment on these fiscal statements based on our audit. We conducted our audit in conformity with sanctioned criterions on scrutinizing in Malaysia. Those criterions require that we comply with ethical demands and program and execute the audit to obtain sensible confidence whether the fiscal statements are free from material misstatement.
An audit involves executing processs to obtain audit grounds about the sums and revelations in the fiscal statements. The processs selected depend on our judgement, including the appraisal of hazards of material misstatement of the fiscal statements, whether due to fraud or mistake. In doing those hazard appraisals, we consider internal control relevant to the entity ‘s readying of fiscal statements that give a true and just position in order to plan audit processs that are appropriate in the fortunes, but non for the intent of showing an sentiment on the effectivity of the entity ‘s internal control. An audit besides includes measuring the rightness of accounting policies used and the rationality of accounting estimations made by the managers, every bit good as measuring the overall presentation of the fiscal statements.
We believe that the audit grounds we have obtained is sufficient and appropriate to supply a footing for our audit sentiment.
Opinion
In our sentiment, the fiscal statements have been decently drawn up in conformity with Financial Reporting Standards in Malaysia and the Companies Act, 1965 so as to give a true and just position of the fiscal place of the Group and of the Company as of 31 December 2011 and of their fiscal public presentation and hard currency flows for the twelvemonth so ended.
Report on the Financial Statements- AHB Holdings Berhad
We have audited the fiscal statements of AHB HOLDINGS BERHAD, which comprise the Statements of Financial Position of the Group and of the Company as at 30 June 2012, and the Statements of Comprehensive Income, Statements of Changes in Equity and Statements of Cash Flows of the Group and of the Company for the fiscal twelvemonth so ended, and a sum-up of important accounting policies and other explanatory notes as enumerated in Notes 1 to 33 and every bit set out on pages 9 to 60.
Directors ‘ Duty for the Financial Statements
The Directors of the Company are responsible for the readying of fiscal statements that give a true and just position in conformity with Financial Reporting Standards and the Companies Act, 1965 in Malaysia, and for such internal control as the Directors determine is necessary to enable the readying of fiscal statements that are free from material misstatement, whether due to fraud or mistake.
Hearers ‘ Duty
Our duty is to show an sentiment on these fiscal statements based on our audit. We conducted our audit in conformity with sanctioned criterions on scrutinizing in Malaysia. Those criterions require that we comply with ethical demands and program and execute the audit to obtain sensible confidence about whether the fiscal statements are free from material misstatement.
An audit involves executing processs to obtain audit grounds about the sums and revelations in the fiscal statements. The processs selected depend on our opinion, including the appraisal of hazards of material misstatement of the fiscal statements, whether due to fraud or mistake. In doing those hazard appraisals, we consider internal control relevant to the Company ‘s readying of fiscal statements that give a true and just position in order to plan audit processs that are appropriate in the fortunes, but non for the intent of showing an sentiment on the effectivity of the Company ‘s internal control. An audit besides includes measuring the rightness of accounting policies used and the rationality of accounting estimations made by the Directors, every bit good as measuring the overall presentation of the fiscal statements.
We believe that the audit grounds we have obtained is sufficient and appropriate to supply a footing for our qualified audit sentiment.
Footing for Qualified Opinion
Notwithstanding the impairment loss on trade receivables amounting to RM20,950,845 as disclosed in Note 16 to the fiscal statements, trade receivables of the Group amounting to RM2,065,362 hold been long outstanding and were non impaired. Minimal or no payment was received from these receivables as at the day of the month of this study. In the absence of any documental grounds and alternate audit processs, we are unable to obtain sufficient appropriate audit grounds to determine the recoverability of the abovementioned balances.
Qualified Opinion
In our sentiment, except for the effects of the affairs described in the Basis for Qualified Opinion paragraph, the fiscal statements have been decently drawn up in conformity with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and just position of the fiscal place of the Group and of the Company as at 30 June 2012 and of their fiscal public presentation and hard currency flows for the fiscal twelvemonth so ended.
