The Red Flag

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The 5th symptoms of accounting scandal is the suspicion arise when the analysts could have gotten wind of the information from insiders in Transmile. It is because both local and foreign analysts, agreed with it by giving positive assessments on the company’s prospect and high target prices after the company released its unaudited 4th Quarter of 2006 report. These, despite the fact that profit growth were unusually high – a common general red flag for financial statement fraud.

The 6th symptoms of accounting scandal is the Board of Directors isarincluding the audit committee, auditors’ concern was not immediately highlighted to the entire BOD by the top executives and the Audit Committee upon being alerted by the auditors the boards had formed the Audit Committee to assist them in term of the statutory duties and responsibilities relating to accounting and reporting practice of the company and subsidiaries. A day earlier, the audit committee meeting highlighted several issues in the accounts; however, the issue was not brought up during the board meetings in the followings days, maybe because of the influence from members of the audit committee as they were the persons engaged in the activities. , the Audit Committee decided otherwise and went ahead to seek the consideration and approval of the BOD for release of the unaudited annual account. In fact, the auditors’ concern was not immediately highlighted to the entire BOD by the top executives and the Audit Committee upon being alerted by the auditors. The unaudited 4th Quarter of 2006 report was released on 15 February 2006, before the due date for submission on 28 February 200

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