Corruption of former president in Taiwan

Taiwan court jails former president for corruption
A Taiwanese court today sentenced former president Chen Shui-bian to life in prison after finding him guilty of corruption.
The high-profile, politically charged case also involved Chen's wife, who was sentenced to life for corruption, and numerous relatives and aides.
"Chen Shui-bian and Wu Shu-chen were sentenced to life in prison because Chen has done grave damage to the country, and Wu, because she was involved in corruption deals as the first lady," said a court spokesman, Huang Chun-ming. He said the couple had also been fined a total of NT$500m (£9m).
Chen, the former Democratic Progressive party leader, was the first non-Nationalist to lead the self-ruled island since Chiang Kai-shek fled there at the end of the civil war in 1949.
Prosecutors had charged Chen with embezzling £1.9m from a special presidential office fund, accepting bribes of about £5.4m in connection with a land deal, laundering money through Swiss bank accounts, and forging documents.
The 58-year-old pleaded not guilty – at one point going on hunger strike – and claimed he was being persecuted for his anti-Beijing views by his successor, Ma Ying-jeou, who has thawed relations with China.
Hundreds of Chen supporters demonstrated outside the court in Taipei holding flags and banners saying "Free him" and "Chen's innocent".
Chen, who has been held in a suburban Taipei jail since late December, chose not to attend today's proceedings. He won power in 2000, having campaigned on a pledge to clean up Nationalist corruption and deepen Taiwan's de facto independence. But the Nationalist majority in the legislature, and his alleged tendency to play fast and loose with accepted procedures, quickly caused him problems.
Chen angered Beijing with pro-independence views and also alienated Taiwan's most important ally, the US, which feared that his stance was increasing the risks of a war and damaging US-China relations.
An appeal is automatic and experts say it is too early to tell how long he will serve even if his conviction is upheld.
Most Taiwanese believe the former president is guilty of at least some of the charges against him, but supporters fear the decision to prosecute him was politically influenced.
Critics also say that Chen was unfairly confined to jail during his trial. The three-judge panel originally trying him agreed he did not need to be held, but it was replaced by a new panel which accepted prosecutors' arguments that he might flee or collude with co-conspirators.
President Ma Ying-jeou and justice ministry officials have said Chen's prosecution upholds the democratic principle that no one stands above the law in Taiwan.
"I think basically most people still have confidence that the trial itself was relatively fair and feel that something had to be done to deal with corruption," said Andrew Yang, secretary-general of the Chinese Council of Advanced Policy Studies.
"People had very high expectations of [Chen] dealing with corruption by the former government. Unfortunately, he himself was deeply involved."
Reference link: https://www.theguardian.com/world/2009/sep/11/taiwan-jails-former-president-corruption

Deposit-taking co-operative scandal

  A year before the scandal erupted, Consumers Association of Penang (CAP) had already written to JPK to find out the control exercised over cooperatives and the protection given to depositors should a cooperative face financial trouble or a “run”. CAP’s investigations disclosed that malpractices in the cooperatives included directors using the cooperatives’ funds to buy land which they owned or controlled at above market price. Directors were also making the cooperatives buy the shares they owned in private companies at above market value. The cooperatives also gave big unsecured loans to directors, their relatives or their companies.

On 29 July 1986, CAP sent a reminder on “The Need for Greater Control over Co-operatives” to Bank Negara Malaysia (BNM), the Ministry of Finance, Jabatan Pembangunan Koperasi (JPK), and the Ministry of National and Rural Development. The memorandum pointed out that unless the Co-operative Societies Act 1948 was amended and cooperatives activities strictly regulated, depositors may lose billions.

However, our early warning fell on deaf ears and the scandal exploded. The DTCs fiasco which occurred the following month involved 24 cooperatives, 522,000 depositors and about RM1.5 billion in deposits.

It was activated off by Koperasi Belia Bersatu Berhad (KOSATU) suspending payments to depositors who wanted to withdraw their savings in July 1986. The Essential (Protection of Depositors) Regulation 1986 promugulated on 20 July 1986 allowed BNM to freeze the assets of KOSATU and its key management and also to investigate into the affairs of the cooperatives . Other depositors became jittery and this led to a run on other DTCs. On 8 August 1986, the activities of 23 other cooperatives were also suspended. 17 accounting firms were then appointed to assist BNM in its investigations and to come up with a White Paper.

On November 1986, the White Paper on the DTCs indicated that the 24 DTCs lost approximately RM673 million through mismanagement or fraud. The White Paper revealed that a significant number of cooperatives suffered from bad management, either due to lack of expertise or professionalism or through imprudent, and in some cases, corrupts management. This outcome in gross mismanagement of funds such as over-investment in land and property, with nearly one-fifth of assets in housing development projects and fixed assets, some of which were purchased at the height of the property market. There was also over-commitment in loss making or non-income generating subsidiaries and related companies with as much as 42% of total assets committed in loans or capital investments in such companies. The cooperatives also suffered from speculative investments in shares. In certain cooperatives, incidents of fraudulent activities and conflict of interest led to imprudent lending of funds, including to directors and other interested parties.

In 1986, 5 directors of 3 DTCs were charged in court, and in 1987 a further 17 directors of another 5 DTCs were also charged. The refund to the depositors of the 24 DTCs was made possible through 3 types of rescue schemes. These rescue schemes had provided for a full ringgit-for-ringgit refund by way of cash or a combination of cash and equity. The rescue involved RM600 million in soft loans and commercial loans from Bank Negara Malaysia. BNM also paid RM15.6 million for professional fees incurred in the investigation and safeguard work out.

https://bibliotheca.limkitsiang.com/category/co-operative-finance-scandal/

Internal Audit

Internal audit is an independent, objective assurance and advisory activity designed to add value and improve the organization's operations. It helps organizations achieve their goals by adopting a systematic, disciplined approach to assessing and improving the effectiveness of risk management, control and governance processes.

Executed by professionals with a deep understanding of the business culture, systems and processes, internal audit activities ensure that internal controls are sufficient to reduce risk, governance processes are effective and efficient, and organizational goals and objectives are met.

Evaluate emerging technologies. Analysis opportunities. Review global issues. Assess risk, control, ethics, quality, economy and efficiency. Ensuring proper control measures is sufficient to reduce risk. Communicate information and opinions clearly and accurately. This diversity has given internal auditors a broad understanding of the organization. This in turn makes internal auditors a valuable resource for executive management and the board of directors to achieve overall goals and objectives and strengthen internal controls and organizational governance.

Looks like a lot from a resource? Maybe for some people, but for internal auditors - it's all in one day's work.

Definition of Internal Auditing

According to the Definition of Internal Auditing in The IIA's International Professional Practices Framework (IPPF), internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

Functions of an Internal Auditor

During the many functions that an internal auditor performs are evaluated the accuracy of controls at business unit levels and recommending improvement; And investigating internal fraud or behavior in violation of company policy.

Also, properly-managed publicly-traded companies have internal auditing teams to carry out compliance with outside regulatory agencies such as the SEC and with auditing guidelines as laid out by the Generally Accepted Accounting Principles (GAAP).

Assess risk management

The internal audit profession is fundamentally concerned with assessing the organization's risk management. All organizations are at risk. For example, if an organization's reputation treats customers incorrectly, health and safety risks, the risk of supplier failure, risks associated with market failures, cybersecurity, and the designation of financial risks in certain key areas, it poses a risk to the organization's reputation.The key to an organization's success is to manage these risks effectively - more effective than the competition and as effective as the needs of the stakeholders.

To assess the quality of risk management, internal auditors will assess the quality of risk management processes, internal control systems and corporate governance processes across all parts of the organization, and report directly and independently to the highest level of executive management to the audit committee of the board of directors. 

Assist management in improving internal controls

An internal auditor's knowledge of risk management also enables him or her to serve as a consultant, provide advice and act as a catalyst for improving organizational practices.

So, for example, if a line manager is concerned with a specific area of responsibility, working with an internal auditor can help identify improvements. Perhaps a major new project is underway - internal auditors can help ensure that project risks are clearly identified and assessed, and actions are taken to manage project risks.

Why is internal audit important to your organization?

By reporting to executive management that important risks have been assessed and highlighting areas for improvement, internal auditors help executive management and the board to demonstrate that they effectively manage the organization on behalf of stakeholders. This is summarized in the mission statement of the internal audit, which states that the role of internal audit is to “enhance and protect organizational value by providing risk- and objective assurance, advice and insights”.

Therefore, internal auditors and executive management, non-executive management and external auditors are key components of any organization's top governance.

Activities of internal audit

Below are the key things an internal auditor does. Within these areas, it is important to think of the internal auditor as the organisations critical friend – someone who can challenge current practice, champion best practice and be a catalyst for improvement, so that the organisation as a whole achieves its strategic objectives.

Evaluate control and advise managers at all levels

The role of internal audit in assessing risk management is broad because everyone from the mailroom to the board room is involved in internal control. The job of the internal auditor involves assessing the tone and risk management culture of the organization at one level until the effectiveness of management policy implementation is assessed and reported at another.

Evaluating risks

The manager's job is to identify the risks facing the organization and understand how they will affect the achievement of goals if they are not effectively managed. Management needs to understand the risks that the organization is willing to take, and to implement controls and other safeguards to ensure that they don't exceed those limits. Some institutions have a higher appetite for the risks posed by changing trends and business/economic conditions. As a result, the technology of internal audit has shifted from a passive and controlled form to a more proactive and risk-based approach. This allows the internal auditor to anticipate potential problems and opportunities in the future, providing assurance, advice and insight where it is most needed.

Analyze the operation and confirm the information

Achieving goals and managing valuable organizational resources requires systems, processes, and people. Internal auditors work closely with the line manager, review the business, and report their findings. Internal auditors must be proficient in the organization's strategic objectives and the business department, so that they clearly understand how any particular sector in the organization's business and the big picture.

Publish By: Yong Sai Ling

Reference Link :-

Internal Aduit by IG Group
https://www.investopedia.com/terms/i/internalauditor.asp

Internal Audit by Wkipedia
https://en.wikipedia.org/wiki/Internal_audit

Terms and Types of Evidence

Physical Examination

Inspection or count by the auditor of a tangible asset.

Most often associated with cash and stock, but it is also applicable to the verification of securities, tangible fixed assets and notes receivable.

Confirmation

The receipt of a written or oral response from an independent third party. Auditor has client request that the third party respond directly to the auditor.

Documentation

Examine supporting evidence in client files.

It has two types of document which are internal documents and external documents

-Internal documents is prepared and used within client organization and does not go outside party.

-External documents has been in hands of an outside party to the transaction and it is more reliable than internal documents.

Analytical procedures

Uses comparisons and relationships to other data appear reasonable compared to the auditor's expectation or assess whether account balances.

An auditor may compare the gross margin in the current year with the preceding years.

Recalculation

Involves rechecking a sample of calculations made by the client.

Rechecking client calculations consists of testing the client's arithmetical accuracy.

Reperformance

Is the auditor's independent tests of client accounting procedures or controls that were originally done as part of the entity's accounting and internal control system.

Published by : Kelvin Ngooi Zhan Lean

Reference Link :

https://quizlet.com/15950818/7-types-of-audit-evidence-flash-cards/

Characteristics of Suitable Criteria

Reliability

Reliable criteria allow reasonably consistent evaluation or measurement of the subject matter, when used in similar circumstances by similarly qualified practitioners.

Neutrality

Neutral criteria will contribute to conclusions that are free.

Understandability

Understandable criteria contribute to conclusions that are clear, comprehensive, and not subject to significantly different interpretations.

Relevance

Relevant criteria contribute to conclusions that assist decision-making by the intended users

Completeness

Completeness criteria are sufficiently complete when relevant factors that could affect the conclusions in the context of the assurance engagement circumstances are not omitted.

Published by : Kelvin Ngooi Zhan Lean

Reference Link : https://definedterm.com/a/definition/99132

The Importance of Auditing

  Auditing is a means of evaluating the effectiveness of a company's internal controls. Maintaining an effective system of internal controls is vital for achieving a company's business objectives, obtaining reliable financial reporting on its operations, preventing fraud and misappropriation of its assets, and minimizing its cost of capital. In view of the auditor's report, investors may invest and banks may loan cash. If you aren't intimidated by numbers and you've developed a flair for working with financial transactions, along with being intrigued by investigating financial results, auditing may be a viable career choice for you.

  Academics have started identifying an "Audit Society" .Since, auditing has become an ubiquitous phenomenon in the corporate as well as the public sector. It is an individual that perceives and recognizes the propositions before them for examination. Auditor obtains evidence and formulates an opinion on the basis of his judgement which is communicated through their audit report.

  Third party assurance is given by the auditors on each topic. There are numerous different territories which are usually evaluated, for example, Secretarial and Compliance Audit, Internal Controls, Quality Management, Project Management, Water Management, and Energy Conservation.

  In case for small business owners, the thought of a financial audit is formality. The financial position and organization of a business can be revealed by auditor. Through this, small businesses can get colossal advantages from better understanding their financial position. Financial audits are also beneficial in highlighting areas of success or concern in a business and help the management team find greater pathways to future success.

  Audit is nothing but an independent and systematic examination of statutory records, books of accounts, documents and vouchers of an organization. This mainly performed or conducted to ascertain how far the financial statements as well as non-financial disclosures present a true and fair view of the concern. Audit is an activity that attempts to ensure that the books of accounts are properly maintained by the concern as required by law.

Published by : Ooi Bao Yi

Reference Link : 

"The Importance of Auditors", by Julie Davoren.

"The Importance of an Audit System to Companies", by Jeff Clements, On June 29, 2018

The Difference Between Accounting and Auditing

What is Accounting? 

Definition of Accounting:

  Accounting refers to the process of capturing, classifying, summarizing, analyzing and presenting the financial transactions, records, statements, benefit and financial position of an organization or entity.

  When accounting process ends, auditing begins, for the purpose of determining the true and fair picture of books of accounts. Accounting is utilized by the firms for keeping a track of their monetary transactions. It is the language the business understands, as it is the tool for reporting financial statement of the business entity.

What is Auditing? 

Definition of Auditing:   

  Auditing involves carrying out the inspection and statutory audit of the financial statements, and giving a fair and unbiased opinion on whether the financial statements and records provide a true and fair reflection of the actual financial position of the firm. The auditors, usually external, carry out the task of auditing under the provisions of the applicable laws on behalf of shareholders or regulators. The scope of auditing work is controlled by the applicable laws.




Similarities 

  Many of the basic processes of both accounting and auditing are comparative. Both need a thorough knowledge of accounting basics and principles. Both are generally done by the persons with an accounting degree. Both use essential procedures and techniques of book-keeping, computation and analysis. Both accounting and auditing strive to ensure that the financial statements and records provide a fair reflection of the actual financial position of an organization.

Differences Between Accounting and Auditing
Purposes
- Auditing and accounting serve two different purposes. The major purposes of accounting are to decide the profitability position, the financial position as well as the cash flow position of a company. It is also used to determine how well a company is performing. The purpose of auditing is to check whether the financial statements give a true and fair view.

Timing
- Accounting is completed on continuous basis with daily recording of financial transactions; while auditing is basically a periodic process and carried out after the preparation of final accounts and financial statements, usually on yearly basis.

Deliverable
- Accountants prepare profit and loss, balance sheet as well as other statements for use by the management, such as cash flow forecast statement, debtors’ ageing statements.An audit is performed, the auditor will express an opinion on whether financial statements give a true and fair view. He or she will then sign an auditor’s report that will reflect the opinion he/she has about the financial statements that have been prepared by accountants. An auditor can also claim that they don’t receive enough information and, as a result, fail to come up with an conclusion.

Level of Detail
- Accounting is extremely point by point and captures all details related to financial transactions, records and statements; while auditing generally uses financial statements and records on sample basis.

Necessity
- Accounting is necessary for all organizations in the everyday or routine operations; while auditing is not necessary in the day-to-day operations.

Professional Misconduct
- An Accountant is not usually prosecuted for professional misconduct; whereas an auditor can be arraigned for professional misconduct as per the applicable legal procedure.

Shareholders’ Meetings
- Accountant does not attend the shareholders’ meeting; while an auditor may attend the shareholders’ meeting.

Conclusion

  Accounting and Auditing both are specific fields, but the scope of auditing is wider than accounting as it needs a thorough understanding of various acts, tax rules, knowledge of accounting standards and standards on auditing as well as communication skills are also required.

  Apart from that, secrecy, integrity, honesty and independence are the basic requirements that is to be maintained while performing the audit procedure. The reports submitted by the auditor are helpful for the users of the financial statement like creditors, shareholders, investors, suppliers, debtors, customers, government, etc. for rational decision making.

  In spite of the fact that Accounting isn't less, it also requires complete knowledge of the accounting standards, principles, conventions and assumptions as well as Companies Act rules and tax laws. The procedure of auditing is conducted only when the accounting is done properly so; it cannot be neglected.

Published by : Ooi Bao Yi

Reference Link : 

"Audit Vs. Accounting", by Angelique de la Morreaux

"7 Key Differences Between Accounting and Auditing", by Corporate Hub

Enron Scandal

Logo of ENRON

  The story of Enron Corp. is the story of a company that reached dramatic heights, only to face a dizzying fall. Its collapse affected thousands of employees and shook Wall Street to its core. At Enron's peak, its shares were worth $90.75; when it declared bankruptcy on December 2, 2001, they were trading at $0.26. To this day, many wonder how such a powerful business, at the time one of the largest companies in the U.S, disintegrated almost overnight and how it managed to fool the regulators with fake holdings and off-the-books accounting for so long.

"America's Most Innovative Company", named by Fortune Mazagine.

  Enron was formed in 1985, following a merger between Houston Natural Gas Co. and Omaha-based InterNorth Inc. Following the merger, Kenneth Lay, who had been the chief executive officer (CEO) of Houston Natural Gas, became Enron's CEO and chairman and quickly rebranded Enron into an energy trader and supplier. Deregulation of the energy markets allowed companies to place bets on future prices, and Enron was poised to take advantage.

  The era's regulatory environment also allowed Enron to flourish. At the end of the 1990s, the dot-com bubble was in full swing, and the Nasdaq hit 5,000. Revolutionary internet stocks were being valued at preposterous levels and consequently, most investors and regulators simply accepted spiking share prices as the new normal.

  Enron participated by creating Enron Online (EOL) in October 1999, an electronic trading website that focused on commodities. Enron was the counterparty to every transaction on EOL; it was either the buyer or the seller. To entice participants and trading partners, Enron offered up its reputation, credit, and expertise in the energy sector. Enron was praised for its expansions and ambitious projects, and named "America's Most Innovative Company" by Fortune for six consecutive years between 1996 and 2001.

  By mid-2000, EOL was executing nearly $350 billion in trades. When the dot-com bubble began to burst, Enron decided to build high-speed broadband telecom networks. Hundreds of millions of dollars were spent on this project, but the company ended up realizing almost no return.

When the recession hit in 2000, Enron had significant exposure to the most volatile parts of the market. As a result, many trusting investors and creditors found themselves on the losing end of a vanishing market cap.

The Collapse of a Wall Street Darling
  By the fall of 2000, Enron was starting to crumble under its own weight. CEO Jeffrey Skilling had a way of hiding the financial losses of the trading business and other operations of the company; it was called mark-to-market accounting. This is a technique used where you measure the value of a security based on its current market value, instead of its book value. This can work well when trading securities, but it can be disastrous for actual businesses.

  In Enron's case, the company would build an asset, such as a power plant, and immediately claim the projected profit on its books, even though it hadn't made one dime from it. If the revenue from the power plant was less than the projected amount, instead of taking the loss, the company would then transfer the asset to an off-the-books corporation, where the loss would go unreported. This type of accounting enabled Enron to write off unnprofitable activities without hurting its bottom line.

  The mark-to-market practice led to schemes that were designed to hide the losses and make the company appear to be more profitable than it really was. To cope with the mounting liabilities, Andrew Fastow, a rising star who was promoted to CFO in 1998, came up with a deliberate plan to make the company appear to be in sound financial shape, despite the fact that many of its subsidiaries were losing money.

Kenneth Lay, founder of Enron

The Timeline of Enron Scandal

Published by Hau Rui Xian

Reference Link :

"Top 5 biggest financial scandals of all time", by Barclay Ballard, 12 April 2018
https://www.worldfinance.com/markets/top-5-biggest-financial-scandals-of-all-time

"Enron Scandal", by Wikipedia
https://en.wikipedia.org/wiki/Enron_scandal

Advantages of Audit

Auditing has become a compulsory task in the business organization. All the organizations like business, social, industries and trading organizations make audit of books of accounts. Now-a-days, owner of business and its management are separate. So, to detect and prevent frauds, auditing has become essential.

Audit helps to easily enter the capital market. The public must comply with the safety communication and the requirements under it. Once the audit is completed, the audited account is easily accepted by the government, such as the central bank, public agencies. This provides a higher level of authority for the account to be authorized.

Audit helps to deterrent to fraud and inefficiency. The audits performed must be within the accounting department of the claim. If a loss occurs, the property of the maintenance fund will be transferred. If the public has a separate ownership plan, the claim must be resolved from the insurance claim.

Audit helps to maintain account regularly . An auditor raises questions if accounts are not maintained properly. So, audit gives moral pressure on maintaining accounts regularly. Then ,  audit helps to assess tax. Tax authorities assess taxes on the basis of profit calculated by the auditor. In the same way sales tax authority calculates sales tax on the basis of sales shown in the audited statement.

Beside that , audit helps to reduce capital costs. This reduces information related to financial statements related to lower interest rates and return on investment. Sometimes this activity provides a convenient settlement and partner requirements. It can be corrected on time by performing audit fraud and error processes.

Audit helps to present a proof . If any case is filed against the auditor regarding negligence, auditor can present audited report as a proof to settle such case. So, it helps to present proof to settle such cases.

Audit provides information about profit or loss. A businessman wants to know profit or loss of his business after a certain period of time. So, the owner of the business can get information about profit or loss after auditing the books of accounts. Beside that, Audit helps to prepare future plan. All the audited statements remain true and correct. Such true and correct account helps to prepare for the future plans.

Audit has auditor constructive. Constructive people make certain controversies and make clear decisions before continuing to report. It works with those who deal with stakeholders to prove the efficiency of the organization. It forces the organization to force all disputes to be resolved. It helps to quickly and collectively correct fraud and other common mistakes.

Audit helps to amalgamate the company. Sometimes, same nature of organization may be amalgamated. Auditing makes valuation of assets and liabilities which helps to amalgamate the company. Purchaser of the company can accept such business organization on the basis of valuation made by the auditor.

Audit helps to maximize profit levels of company. Auditing is called an assessment activity, which is related to the sequence of challenging environments, and it also involves conflicts that are pursued in the maximum level of profit to be achieved.

Publish By: Yong Sai Ling

Reference Link :-

Top 39 Advantages and Disadvantages of Auditing by Chitra Reddy 

https://content.wisestep.com/top-advantages-disadvantages-auditing/

Duties of Auditor

1) Collect and analyze data to detect defect control, duplicate work, extravagance, fraud or non-compliance with laws, regulations and management policies.

2) Report asset usage and audit results to management and recommend changes in operational and financial activities.

3) Prepare a detailed report on the audit results.

4) Review data on key assets, net worth, liabilities, capital stock, surplus, income and expenses.

5) Check the efficiency, effectiveness, and use of accepted accounting procedures to record transactions.

6) Review and evaluate financial and information systems and recommend controls to ensure system reliability and data integrity.

7) Supervise the audit of the company and determine the scope of the investigation required.

8) Prepare, analyze and verify annual reports, financial statements and other records using recognized accounting and statistical procedures to assess financial status and facilitate financial planning.

9) Discuss financial and regulatory matters with company officials.

10) Check inventory cash, notes receivable and notes payable, transferable securities and cancel checks to confirm the accuracy of the records.

11) Check the inventory to verify the journal and ledger entries.

12) Check that the organization's goals are reflected in its management activities and whether employees understand the goals.

13) Check records and interview workers to ensure that transactions are recorded and laws and regulations are followed.

14) Direct activities of personnel engaged in the submission, recording, preparation and transmission of financial records.

15) Use internal computer systems to generate up-to-date information so that management can make decisions based on actual data rather than historical data.

16) Conduct a pre-implementation review to determine if the systems and programs being developed are operating as planned.

17) Review the taxpayer's account and conduct an on-site audit by letter or by summoning the taxpayer to the office.

18) Use interest and discount rates, annuities, stock and bond valuations, and amortized valuations of consumable assets to assess the taxpayer's financial position to determine tax liability.

19) Check the records, tax returns and related documents related to the settlement of the deceased's estate.

20) Audit payroll and personnel records to determine unemployment insurance premiums, workers' compensation insurance, liabilities and compliance with tax laws.

Published by : Seow Ji Kian

Reference Link : 

"Auditor Job Description" by MONSTER
https://hiring.monster.com/hr/hr-best-practices/recruiting-hiring-advice/job-descriptions/auditor-job-description.aspx

Ferdinand Marcos

 

(Ferdinand Marcos, September 11, 1917 - September 28, 1989), Philippine politician, dictator, former Philippine president, ruled the Philippines from 1965 to 1986.

  Marcos was a lawyer and was imprisoned for allegedly assassinating his father's political rivals, but was later acquitted. During the Second World War, Marcos participated in the Philippine Autonomous Army, engaged in guerrilla activities against the Japanese army; and escaped in the death march of Bataan. The operational experience of Marcos became the political basis for Marcos. After the end of the war against Japan, he became a political figure. In 1946, he became the technical assistant of the first president of the Republic after the independence of the Republic, Manuel Rojas. In 1957 he became the leader of the Philippine Liberals. In 1963, he became the head of the Senate. In December 1965, Ferdinand; Marcos defeated the campaign opponent with a majority overwhelmingly elected as the sixth president of the Philippines after independence in 1964. Re-elected in 1969, on August 21, 1972, the termination of the Personal Protection Act was announced, and on September 21, the military administration was implemented nationwide under the name of saving the Republic and establishing a new society. During his tenure, he took economic development as his main goal, implemented a rice self-sufficiency plan, encouraged the introduction of foreign capital, and committed to the systematization of foreign-related bills to eliminate private armed forces and the Philippine Communist Party. Diplomatic relations with the Soviet Union, China, Cuba and Eastern European countries were established diplomatically without abandoning the West.

 

On May 1, 1954, after 11 days of lightning-like love, Marcos was tied to the tall, well-dressed, and Imelda, known as the "Tacloban Rose." From then on, Marcos in the full cooperation of Imelda with the official promotion of the prosperous, skyrocketing.

  At the beginning of the ruling, Marcos also did quite a lot. He implemented "agrarian reform" and launched a "green revolution", focusing on education and enlightening the people's wisdom, and achieved certain results. Since 1976, food has been self-sufficient. Since 1977, food can be exported in small quantities. All this gave him the opportunity to be re-elected in 1969 (according to the laws of the Philippines at the time, the president could only hold one session for four years). However, in 1969, when Marcos reelected the presidency, the social contradictions in the Philippines were inconsistent with his conflicts at the beginning of 1965, political chaos, high crime rates, and the world winds.

By the summer of 1972, Marcos saw that the second term of the presidency was about to expire and began to hold the post of president. In order to achieve his long-term rule of the Philippines and the establishment of the Marcos dynasty, he signed the "Military martial law" on September 21, 1972. It announced the implementation of military control throughout the country, arrested opposition leader Benigno Aquino and thousands of so-called "subversives" and banned assemblies, marches and strikes. Ten years of military control began. In 1972, a new constitution was promulgated in the second year, and the American-style presidential system was changed to a British-style responsibility cabinet system, stipulating that the president would concurrently serve as prime minister during the military administration.

In order to maintain the autocratic rule, Marcos was a crony and cultivated the party. His wife, Imelda, has been the mayor of Metro Manila since 1975, and was informally appointed as the heir to the president in 1978. In 1979, he was appointed chairman of the cabinet meeting of ministers and became the most powerful of the Philippines. character. Their only son, Peng Peng, served as governor of the province of Ilocos. Imelda’s brother, Kokoy, first served as governor of Wright, and later as ambassador to China and ambassador to the United States. The new Socialist Party headed by Marcos controls 88% of the seats in the National Assembly and 90% of the provincial and mayor positions in the country. Commanders of the armed forces, the General Staff, the General Staff, the Commander of the Presidential Palace, the Director of the National Security Intelligence, and the Commander of the Capital Police Force are also mostly loyal to his fellow Ilocos provinces.

Under the harsh rule of Marcos, the parliament was in vain, the party activities were absolutely forbidden, and a large number of politicians, journalists, and students who opposed him were trapped. "The people of the country are afraid to speak, the road is on the way." At the same time, the Marcos and the couple are relying on power. Use all means to engage in malpractice and misappropriation of public funds. Their property has grown dramatically. When Marcos was a member of parliament, he was given the nickname "Mr. 10%." Before taking office as president, after the president, especially in 1972, the "10%" was gradually open and institutionalized. As a result, any business, investment, and business in the Philippines must be tribute to the Majia scent and rebate. Otherwise, An administrative order or telephone call can make you bankrupt.

1, change the skirt 10 times a day

For the accusations of the outside world, Imelda said that the First Lady needs to be the model of all women - both smart and beautiful, but also rich and generous. There are 5,000 skirts hanging in her closet, and she has to change her skirt 7 times a day, sometimes even 10 times.

2, a shopping spend 5 million US dollars

In addition to the skirt, Imelda has 3,500 pairs of shoes. Imelda said that these shoes were given by the manufacturers. After Arroyo was elected president, he hated Imelda very much and confiscated all her shoes. Imelda once went shopping in New York and spent $5 million a night, which is also a trivial matter.

3, jewelry up to 100 kg

Imelda’s jewels, such as the necklace ring bracelet, weighed 100 kilograms and were later confiscated by the government. She also admits that her weakness is that she likes expensive cars.

After ruling in 1965 and stepping down in 1985, the wealth of the Marcos family skyrocketed from the initial tens of thousands of dollars to the later $5 billion to $10 billion. After the overthrow of the Marcos regime, the Filipino people were shocked and angry at the extravagance of Immelda. In the home of Imelda, the precious French perfume was crowded with her dressing table, and the washbasin she used to wash her face turned out to be It is gold plated.

Even more shocking is the wardrobe, the large and spacious closet, in addition to hundreds of European luxury clothing, there are 2,000 pairs of light gloves, more than 1,700 small bags, and there are 5,000 shorts, as for leather shoes, Its value and quantity are even more shocking to the world, not only the number of 3,000 pairs, but also all expensive brands, as for other bras, socks and the like is even more difficult. The incident shocked the whole world, and the "Imelda's shoes" has since become a symbol of the ultimate in luxury.

After arriving at Clark's US military base by helicopter, the Marcos wanted to return to the province of Ilocos, but the development of the situation forced them to dispel the idea. Therefore, they can only transfer to the intercontinental transport aircraft of the United States and travel to Honolulu, Hawaii via Guam. Just off the plane, the Marcos family and their entourage were placed at the Hickam Air Force Base Guest House on the outskirts of Honolulu. However, his 300-box baggage was detained by the Hawaii Customs. Among them are 22 cases of peso new banknotes (approximately US$1.2 million), two Philippine bank deposit certificates equivalent to US$1.8 million, 15 boxes of gold, diamonds, jewellery, watches and clocks, as well as a large number of precious art, securities and real estate leases. ... The US Customs registered these items one by one and handed over the 2,300-page list of assets to the new Philippine government on March 18.

Immediately after the new government led by Mrs. Aquino came to power, he ordered the freezing of all assets of Marcos and his relatives and friends in the country, and established a clean government committee headed by Salonga to investigate the property of the Marcos family at home and abroad. After three years of arduous investigation, the Integrity Commission initially identified the assets of the Marcos family as follows:

In the Philippines, there are 4,500 acres of real estate, 5,000 acres of land, 23 farms, 232 companies, 18 television stations, 36 radio stations, 29 aircraft, 13 yachts, and $1 billion in cash. A few tons of gold and jewels are worth $1 billion.

In the United States, 4 office buildings in Manhattan, New York, Beverly Hills Villa in Los Angeles, and Honolulu Villas in Hawaii. Cash and jewellery is $700 million. In Switzerland, bank deposits are $1 billion.

In Australia, more than $500 million. In Brazil, there are at least $300 million. In addition, in the Hong Kong, Indonesia, the Netherlands, the United Kingdom, the Bahamas and other countries and regions, the Marcos family also has a large amount of property deposits. These findings, far from the actual assets of the Marcos family, I am afraid that no one can tell.

Published By : Seow Ji Kian

Reference Link : 

"Ferdinand Marcos" by Wikipedia, 25 July 2018.

https://en.wikipedia.org/wiki/Ferdinand_Marcos

4 Types of Audit Opinions

  An Audit Opinion also called as Audit Report and Audit Statement. In financial reporting, an auditor's opinion is the outcome of an auditor's review of an organization's financial statements.

The auditor's opinion does not judge the financial position of the reporting entity. Nor does it otherwise interpret accounting data. An audit opinion is providing an independent and expert opinion on the fairness of financial statements through an audit is the most frequent attestation service.

  There are four types of audit opinions :

1) Unqualified Opinion or Clean Opinion

Often called a clean opinion, an unqualified opinion is an audit report that is issued when an auditor determines that each of the financial records provided by the small business is free of any misrepresentations. In addition, an unqualified opinion indicates that the financial records have been maintained in accordance with the standards known as Generally Accepted Accounting Principles (GAAP). This is the best type of report a business can receive.

Typically, an unqualified report consists of a title that includes the word “independent.” This is done to illustrate that it was prepared by an unbiased third party. The title is followed by the main body. Made up of three paragraphs, the main body highlights the responsibilities of the auditor, the purpose of the audit and the auditor’s findings. The auditor signs and dates the document, including his address.

2) Qualified Opinion

In situations when a company’s financial records have not been maintained in accordance with GAAP but no misrepresentations are identified, an auditor will issue a qualified opinion. The writing of a qualified opinion is extremely similar to that of an unqualified opinion. A qualified opinion, however, will include an additional paragraph that highlights the reason why the audit report is not unqualified. The qualified opinion may result because:

• The report misstates or misclassifies accounting entries. For example, an expense that should appear above the gross profit line appears wrongly below it. This error can lead to misleading Gross profit figures.
• There are limits on audit scope. In other words, auditors may not have had access to particular financial data.
• The auditor doubts the veracity of specific financial data.
• The auditor is not entirely confident that reports:
                                                                                -Comply with GAAP
                                                                                -Represent the entity's accounts fairly

3) Adverse Opinion

The worst type of financial report that can be issued to a business is an adverse opinion. This indicates that the firm’s financial records do not conform to GAAP. In addition, the financial records provided by the business have been grossly misrepresented. Although this may occur by error, it is often an indication of fraud. When this type of report is issued, a company must correct its financial statement and have it re-audited, as investors, lenders and other requesting parties will generally not accept it.

4)Disclaimer of Opinion

On some occasions, an auditor is unable to complete an accurate audit report. This may occur for a variety of reasons, such as an absence of appropriate financial records. When this happens, the auditor issues a disclaimer of opinion, stating that an opinion of the firm’s financial status could not be determined.

Published by : Hau Rui Xian

Reference Link :

" What Are the 4 Types of Audit Reports? " by KJ Henderson, 30 June 2018.
https://smallbusiness.chron.com/4-types-audit-reports-3794.html

Bank Negara Malaysia Forex Scandal

The headquarters of Bank Negara Malaysia in Kuala Lumpur March 30, 2015. The BNM foreign exchange scandal is one of the largest in Malaysian history. — Picture by Yusof Mat Isa

  Over two decades after it first emerged, a Royal Commission of Inquiry (RCI) is finally being established to investigate the Bank Negara Malaysia (BNM) foreign exchange scandal.The losses from BNM’s forex trading, alleged to be more than US$10 billion (RM25 billion then), was believed to have happened between 1987 and 1992 when the exchange rate had still been between RM2.3 and RM2.5 to the US dollar.

  In an interview with New Straits Times, former BNM assistant governor Datuk Abdul Murad Khalid said the cause of such colossal losses was because there were no control and that “nobody knew what was happening”.The BNM governor at the time, the late Tan Sri Jaafar Hussein, resigned following the scandal and was blamed for it, but after Murad’s revelations, Deputy Home Minister Datuk Nur Jazlan Mohamed said his father-in-law had been a scapegoat for “others”.The scandal, among the largest in Malaysian history, took place during Tun Dr Mahathir Mohamad’s administration.

  According to a Reuters report from the period, BNM in 1989 became increasingly aggressive in its foreign exchange trading, purportedly to stabilise the ringgit.Two years later, it had become the “dominant force” in the global forex market, spending amounts between five and 10 times the norm for central banks and at daily frequencies compared to the handful of times that other central banks ventured into such transactions.

  Around the same time, US billionaire George Soros was also an active currency trader and had been speculating on the British pound, similarly to BNM.But both had different predictions: Soros bet that the pound would fall, while BNM’s traders believed it would appreciate.In the end, Soros predicted accurately, earning a reported US$1 billion in a day and the lifelong enmity of Dr Mahathir that has only now begun to subside.

  The extent of BNM’s losses have never been fully established.At the time, Tun Daim Zainuddin — a confidante to Dr Mahathir — was finance minister (1984 — 1991) while Tan Sri Nor Mohamed Yakcop was assistant BNM governor.Former deputy prime minister Datuk Seri Anwar Ibrahim assumed the role of finance minister in 1991, but he has since denied involvement in BNM’s decisions that led to the alleged losses.

  Anwar said that he only knew about the losses in 1992 when he was abroad. In a statement this April, Anwar said the problem was first known through international news reports and the Zurich market at the end of 1991 and early 1992.

  In 1993, veteran DAP leader Lim Kit Siang was the first to raise the matter in Parliament, alleging then that BNM’s forex losses was an estimated RM30 billion.Lim Kit Siang went on to write a book titled The Bank Negara RM30 Billion Forex Losses Scandal on the matter and made regular calls for a RCI to investigate the case. After that, the Cabinet formed a special taskforce to investigate Murad’s allegations, which culminated in yesterday’s announcement that an RCi will be convened to investigate. 

In her testimony to the Royal Commission of Inquiry (RCI) here today, Former Bank Negara Malaysia (BNM) Governor Tan Sri Zeti Akhtar Aziz conceded that the foreign exchange (forex) losses scandal of the 1990s remains a dark episode in the history of the central bank. Picture by AHMAD IRHAM MOHD NOOR.

Publish by : Hau Rui Xian

Reference Link :

"What was the BNM forex scandal?" by Malay Mail, 22 June 2017.

https://www.malaymail.com/s/1405201/what-was-the-bnm-forex-scandal

'Zeti calls forex scandal dark episode in BNM history; claims she learned of losses through media' by Azura Abas and Lidiana Rosli, 6 September 2017.

https://www.nst.com.my/news/nation/2017/09/276785/zeti-calls-forex-scandal-dark-episode-bnm-history-claims-she-learned

BERNIE MADOFF SCANDAL (2008)

Bernard Lawrence Madoff  

Former Non-executive Chairman of the NASDAQ Stock Market

Bernard Lawrence Madoff April 29, 1938 (age 80) is a legend on Wall Street in the United States and served as chairman of the board of directors of the NASDAQ stock market. For many years, he has been one of the hottest “investment experts” on Wall Street. He used the high return on funds as a bait, attracted a large number of investors to continuously inject capital, and repaid the previous investment interest with the newly acquired income, forming a capital flow. This scam has been maintained for many years. Until the subprime mortgage crisis broke out in 2008, he faced up to $7 billion in redemption pressure and could not continue to support it. Only then he tell his son, that his company’s executives, confess that he had “nothing” and everything was “just A huge lie." Madoff’s sons reported Dad that night, and one of the biggest fraud cases in US history was exposed to the world’s eyes.

The subprime mortgage crisis wiped out Wall Street, and the glare of Fortune and Wisdom Garden was weak. The $50 billion Madoff scam gave Wall Street a slap in the face. In the "Made-style scam", many well-known institutions were hit, including Spanish financial giant Santander, the risk exposure in this fraud case was as high as about 3.1 billion US dollars, with BNP Paribas and European banking giant HSBC Bank, Japan Nomura Securities, etc. But what kind of super magic does Madoff have?

In fact, the "Madoff -style scam" model is a plagiarism of the typical "Ponzi scheme", which is not new, that is, using high returns to lure investors, while using the later investor funds to pay up the previous investors. The "Ponzi scheme" model can only last for two or three years, and Madoff has used a simple fraudulent director for 20 years, amounting to 50 billion US dollars, fooling many investors on Wall Street, deceiving a large number of professional The victims of experience have to be “stunned”, and how smart and wise Wall Street “disregards”!

Analysis and judgment, it is not difficult to see that the "Madoff -style scam" is wrapped in a glamorous outer shell, and some of the so-called investment experts on Wall Street are also superstitious about these bright shells.

First, Madoff wraps himself with goodness and behavior and a “white-and-white” investment shell. Trust him and you will get a steady return of 1%-2% per month. Madoff himself pursues flawless career records, is committed to fair trade, and maintains high moral standards, which are well-known Madoff logos on Wall Street.

Madoff created an excellent personal glamour for his scam. Before the scam was exposed, Madoff had a good reputation and liked to donate. In the Jewish community of Florida and New York, Madoff is considered by many to be a "God" in investment, saying that his fund is "Jewish T-NOTES", meaning that it is as solid as the short-term government bonds issued by the Ministry of Finance.

Second, he wrapped himself with the mystery of mysterious investment techniques. The harsh condition of Madoff’s investment attraction is that if you want to invest in Madoff, please don’t ask him any questions about investment. As for why he can make money when others don't make money, Madoff uses a few words to explain: "internal news." Many savvy hedge fund managers and professional investors have been easily conquered by the words "internal news."

In the shiny shell, a lot of clues leaked, proud of turning a blind eye to Wall Street.

From an operational point of view, accounting firms that use unfair accounting firms for daily audits and are responsible for more than $1 billion in asset audits of Madoff Investment Securities have only three employees: partners, secretaries, and an accountant.

He violated the control principle of isolation. All transactions of Madoff Investment Securities are dictatorial by Madoff. He manages assets and reports assets at the same time. The company's asset management and custody are not separated.

Madoff has been secretive about the company's financial situation, and all the accounts and documents of the investment advisory business have been "locked in the safe" by Madoff.

Madoff declared that he had adopted an investment strategy called “split conversion”, and almost no one could explain what exactly.

The "Madoff -style scam" is against the fragility of Wall Street regulation. The packaging of the Madoff scam is complicated, but the investment operation is simple and clear, and the vulnerability is easily seen. However, this 20-year, up to $50 billion investment scam was exposed after Madoff’s son fulfilled the duties of the regulator. This is a great irony for Wall Street regulators.

On the evening of January 7, Beijing time, JP Morgan Chase agreed to pay $1.7 billion on Tuesday in order to settle the government allegations related to financial giant Bernard Madoff.According to a criminal lawsuit filed by the US government, the relationship between JPMorgan Chase and Bernard L. Madoff Investment Securities exposes the former to the US Bank Secrecy Act two felony charges.

After the settlement with the US government, the two felony charges facing JPMorgan Chase will be postponed for two years, and the bank must reform its anti-money laundering policy during this period.

On December 8, 2014, US local time, Daniel Bonventre, Madoff's former back-office operations director, was sentenced to 10 years in prison by the federal court in Manhattan and was fined more than $155 billion.

Bernie Madoff exits federal court March 10, 2009 in New York City. Photo Credit: Getty Images / Mario Tama

Publish By: Yong Sai Ling

Reference Link :-

Carozza, Dick. 2009. “Chasing Madoff.” Fraud Magazine. May/June 2009

http://www.fraud-magazine.com/article.aspx?id=313

Bernard Madoff Fast Facts by CNN Library in April 13, 2018

https://edition.cnn.com/2013/03/11/us/bernard-madoff-fast-facts/index.html

Bernie Madoff (AMERICAN HEDGE-FUND INVESTOR)

WRITTEN BY: The Editors of Encyclopaedia Britannica

LAST UPDATED: Jul 27, 2018 

https://www.britannica.com/biography/Bernie-Madoff