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Case 26 Latest
GROUP ASSIGNMENT
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CASE STUDY 26
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Restoring Trust in Corporate Governance
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The Case of Hongwei Holdings Berhad
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TABLE OF CONTENT
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Page
Content
Number
Question 1
Identify and explain the issues and weaknesses in relation to corporate
governance of Hongwei Holdings Berhad
Question 2
Suggest some strategies on how to improve corporate governance in the
company
Question 3
Analyse the position of Hongwei Holdings Berhad in the industry in
terms of whether its business is attractive or not
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Question 4
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How would you perceive Hongwei Holdings Berhad’s internal controls?
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Question 1
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Question 2
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Suggest some strategies on how to improve corporate governance in the company.
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board is that it has a good understanding of what skills it has and those skills it
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requires. A board candidate should also be evaluated on his or her interpersonal skills
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since board interactions and relationships will be important to overall board
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performance.
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3. Ensure Timely Information
Timely information results in better decision-making. Management team has to
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provide timely information to ensure proper board supervision and direction. Board
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the request.
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Boards need to balance conformance (i.e. compliance with legislation, regulation and
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codes of practice) with performance aspects of the board’s work (i.e. improving the
performance of the organisation through strategy formulation and policy making). As
a part of this process, a board needs to elaborate its position and understanding of the
major functions it performs as opposed to those performed by management. These
specifics will vary from board to board. Knowing the role of the board and who does
what in relation to governance goes a long way towards maintaining a good
relationship between the board and management.
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Question 3
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Question 4
How would you perceive Hongwei Holdings Berhad’s internal controls?
2. Irresponsibility of directors. The board of directors Gary Menon and Jasmine Kaur
are clearly not doing their responsibility as the directors of the Hongwei Holding
Berhad. As a directors, they failed to meet the new deadline and unable to submit the
annual report in the agreed time. They also commit a lot of breaches regarding
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corporate governance, foreign listing requirements, disclosures and the non-
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compliance with the Bursa Malaysia Securities’ Directives. Besides that, they also
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failed or refuse to communicate with the regulators and new board of Malaysia even
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though it was one of the responsibilities as the directors, as stated in the corporate
governance.
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3. Lack of proper documentation. One of the subsidiaries unable to confirm the
information about their businesses transactions that happened. They failed to provide
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required information and comprehensive legal advice to auditors in where the auditors
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were unable to assess the completeness of all legal cases and the extent of liabilities
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that might arise. So the auditors unable to obtain appropriate evidence from the
subsidiaries. Moreover, auditors also not able to complete the audit report as they
were unable to determine whether all significant events occurring after the reporting
period had been adequately dealt with in the financial statements , due to the lack of
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proper documentation.
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4. Inability to obtain sufficient assurance. There are another internal control is that led
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to the inability to obtain sufficient assurance that there were no material weaknesses
in the system of internal accounting control or there was no risk that financial
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statements may be materially misstated as a result of fraud is also one of the internal
control problems.
5. Going concern. It indicates that the existence of a material uncertainty that may cast
significant doubt about the group’s and company’s ability to continue as going
concerns.
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