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It is not uncommon for distro/supplier to give out freebies to the corporate decision maker/purchaser/vendor personally. (Former transport minister seems to be a big fan of freebies.) Value of the gift varies. Usually it is of little concern as the gifts are usually not significant and do not influence the decision for the purchase.
In this case, exact details were not given, so it's hard to guess if it is a minor lapse or the tip of an iceberg.
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Hi Big Toe,
I think you have mis-interpreted the issue in hand.
The issue in hand is not about gifts (or the amount), but about the internal control procedures of the Group in which the manner the amount was paid. Making payments from company to employee's personal bank account and then to vendor's employee is not a considered a proper way of dealing with cash in the company. What if the employee just spend away the money? If you want to buy those vouchers, it should be straight from the company's bank account.
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27-03-2024, 02:02 PM
(This post was last modified: 27-03-2024, 02:06 PM by Big Toe.)
To clarify, I understand fully the issue in hand.
From all the information given thus far, It may just be a minor lapse.
From time to time there will be minor breaches of control procedures.
Unless there are more significant intentional /dishonest breaches uncovered, this is considered minor.
What then is considered something more serious to look into? Look no further than the locally listed MLM.
Already commented very very early on on their dealings, wouldn't even consider touching them with a 5 foot rod.
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27-03-2024, 08:52 PM
(This post was last modified: 27-03-2024, 08:53 PM by weijian.)
hi Big Toe,
We know that auditors practise sampling to do their work. And statistics tell us that if you want a Z confidence level for <Y% of defects (where Y is the acceptance level), you need to do Z samples.
And so it seems that from the "Z sampling", 1 of these transactions was flagged out for escalation. And in outgoing QA sampling, whenever a defect rate above acceptance is detected, the sampling increases to check for systemic issues. And it seems the auditors have plans for that if things don't turn out well:
The statutory auditors have indicated that depending on their review, they may wish to undertake a broader review of other matters as well
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"Previous 1.6mil has increased to 2.137mil, and hopefully that is the entire iceberg"
The earlier announcement quoted the affected amount in USD and that was US$1.6 mil. The latest announcement has it in SGD so my conjecture is the amount remains the same just that it is in different currency. It would appear that after the audit findings there are no further discoveries of other expense items that would fall within this category (yet). The next step would be to see if the review by Shook Lin and Bok would produce any further material findings.
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Until i realized life is too short. The "defect" found in this case is non-critical to its day to day operations or its long term business. Not sure why it is made out to be a big deal with a trading halt. In any case, not vested, just airing my views. Businesses will have their flaws, but that doesnt mean it is not investable. Processes can be fixed, honesty and integrity cant.