What is that about?
Under the Act, the external auditor of a public company has a legal duty to report (ie. whistle blow) to Minister of Finance if potential fraud may have been uncovered during the annual audit exercise.
What if it turned out to be misunderstanding? No breach of legal duty if it is done in good faith.
s207 (9a) was seldom invoked. The last time it was used was about 12 years ago on CAM International Holdings Ltd. Recently it was invoked for NEL Group. KPMG has submitted a report to the Minister.
So what do KPMG think has happened in NEL Group?
Apparently there is this new game in town called “round tripping”. It was played by NEL Group and Advance Module, another listed company back in 2005.
How to play? First I sell to you. Maybe after my financial year end, you sell back to me at about the same price. Of course, nothing was really purchased or sold except maybe some people just do and exchange some paperwork on the “transaction”.
The pressure to perform financially has encouraged creativity!
To reveal creative accounting, ethical reporting requires the accounting treatment of substance over form.It is interesting to read your issues on accounting matters.Happy Chinese Lunar New Year, & wishing you success in your career.Your Cheese Prata Friend
I only remember a dear friend who would experience pangs for cheese prata…I don’t think that cheese prata friend would know that much accounting lingo like you do.Thank you for the compliment. Hope my memory will replay on any other cheese prata friend of mine.Good night.