Bursa, EY and The Edge - The number is seen but cannot be seen otherwise
By Pearlwhite 2nd December 2021, 6.50PM (updated 3rd December 2021, 9.45AM)
That’s right, RM1.438 billion of audit discrepancies that cannot be verified. What could that RM1.438 billion be? What does it consist of?
We now know for sure it must be verified at its physical place and location outside of Malaysia (see below for commentary from CEO Karim Abdullah). This is crucial for two reasons:
Firstly, the discrepancies of up to RM3 billion that were resolved are within Malaysian borders. Moreover, some of the RM3 billion of resolved discrepancies were related to companies which had KPMG as their external auditor.
Secondly, this is huge setback for market speculation of fictional contracts, revenue, receivables, vendors, assets and stocks since auditors do not commence with site visits unless and until after documentations and signed confirmations have been audited.
So why would physical place and location verification be so important then? Physical sighting as auditors calls it, is important because it confirms “existence”. Existence is the objective reality or being visible to our eyes. Existence is what gives credibility and legitimacy to the to what are stated in the financial statements.
If existence cannot be verified, whatever that is stated in the financial statements can be fictional, no matter the documentation and signed confirmations. For all you know, when its fictional, it may well be a signed confirmation from a monkey, is a typical auditor joke.
Areas that require sighting includes assets, customer and vendor premises and stocks.
So far, SD has given all co-operation and assistance needed to expedite the completion of the SIR. However, if the parties involved are un-willing to cross Malaysia’s borders, then RM1.438 billion will forever be seen but cannot be seen otherwise.
So, with the documentations and signed confirmations in file, let’s go sightseeing and photograph the places of interests.
Serba Dinamik’s special audit review facing ‘operational matters’
Wednesday, October 27th, 2021 at Markets | News
“Hopefully the easing of standard operating procedures on Covid-19 restrictions in different countries can help to expedite the verification process. It depends on agreement or cooperation of all parties involved,” he told The Malaysian Reserve when asked about the date the group will be able to announce the findings.
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