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SEMESTER A112

NUR ALIA ATIQAH BT MOHD YASIN 214516 NAJWA BT BASARUDDIN 214475

NURSAFIRAH BT JUMEL
FAZELIN BT ISMAIL 216368

214491

Task leader - Nur Alia Atiqah Binti Mohd Yasin Recorder - Najwa Binti Basaruddin

Reporter - Fazelin Binti Ismail


Accuracy Coach - Nursafirah Binti Jumel

The Situation of the problem:

Abdul Latif Ishak as the CEO of the company want Azlan Saad, the accountant to manipulate the report because the company is in the process of applying a 1 million loan from BCD Bank for upcoming project. The current report does not show the profitable report, so the CEO want the accountant do some adjustment to produce a good Financial Statement to be submitted to the BCD Bank.

FARID AZHAR
CONSULTANT:

MANIPULATING THE FIGURES


TASK:

REPORT
PAYMENT:

Abdul Latif Ishak Corporation. Statement Of Comprehensive Income For the year ended December 2011
Sales Cost of goods sold Depreciation Taxes Net Income 47,600 38,300 3,900 800 RM4,600

1. Reserve for bad debts is reduced


by reducing the percentage of bad debts reserved.

2. Method for valuation of inventory are changed The comparison of the cost of goods sold amount between these three method; METHOD COST OF GOOD SOLD
Specific Identification First in First Out Weighted Average 1700 1628 1670

3. Change in method to calculate depreciation


the amount of depreciation decreases the expenses of the company also can be reduced

4. Change the method to calculate sales discount


use gross method instead of net method (assume there are the discount of 10%)

5. Show a sustainable profitability and liquidity


good Profitability and Liquidity is the main requirements before applying for loan Ethics on this behavior

NOT SO GOOD!!!!

6. Manipulate cash flow


Azlan can increase the amount of cash inflow. Azlan can show to the BCD Bank that they have higher sources of cash

For example, in 2000, Azlan reported it has over $4 billion in cash flow from operation the real figure was over $ 1.5 billion less than the real amount
Ethics on this behavior

NOT SO GOOD!!!!

7. Change the type of assumption used


use the cash basis instead of accrual basis
Ethics on this behavior NOT SO GOOD!!!!

8. Change or reduce the number or percentage of company shareholder


reduce the amount of dividend paid and automatically will increase the amount of retained earnings Ethics of this behavior NOT SO GOOD!!!!

9. Capitalized some expenses


decrease the total of expenses and increase company asset Ethics of this behavior

NOT SO GOOD!!!!

10. Miss application of materiality


record some immateriality figure as materiality in order to increase asset Ethics of this behavior

NOT SO GOOD!!!!

can manipulate- all the manipulation must follow standard contains in financial Reporting Standards and GAAP learned about ethics fight unethical behavior