SERBA DINAMIK HOLDINGS BERHAD
KLSE (MYR): SERBADK (5279)
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Ride The Bull Short The Bear
CS Tan
4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
ǷearlꙌhite
1,652 posts
Posted by ǷearlꙌhite > 2021-11-30 18:40 | Report Abuse
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Bursa and TheEdge : Is this auditing standards and is it really good for the capital markets?
By Pearlwhite
30th November, 2021 9.45AM (Updated 30th November 2021 6.40PM)
The revelations made by The Edge in its feature length coverage on 29th November 2021 entitled “Bursa’s suits sheds more light on Serba Dinamik’s financials” is really worth a read.
So much so, that the only addition to what is already mainstream knowledge in the entire coverage was the following, apart from highlighting EY’s one sentence finding in the four areas,
“EY Consulting’s findings update recorded in the court documents highlight the same concerns that KPMG had over the company’s transactions. The Company state that the financial impact on the company from EY Consulting’s findings under the SIR amounted to RM1.438 billion as at Oct 22, 2021.”
Recaps are definitely a good way to reinforce how serious EY Consulting’s findings are. For the list KPMG’s findings previously, here it is.
https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3162085
https://www.theedgemarkets.com/article/kpmg-raised-audit-issues-transactions-involving-over-rm3-billion-says-serba-dinamik. This involved RM3 billion of transactions with audit issues excluding trade/non-trade receivables.
https://themalaysianreserve.com/2021/10/27/serba-dinamiks-special-audit-review-facing-operational-matters. This involved more than RM3.5 billion of transactions with audit issues.
Note that the KPMG raised audit issues transactions of RM3 billion excludes Trade and Non-Trade Receivables. With its inclusion, the estimated amount is more than RM3.5 billion, in some cases estimated to be up to RM4.5 billion.
There are three observations arising from this.
Firstly, if EY’s findings concur with KPMG’s findings in its entirety, why are the findings called “Factual Findings Update”? Shouldn’t it be the “Conclusion”? After all, a conclusion is when there is beyond reasonable doubt that the findings do not contain any questionable facts and hence cannot be challenged.
Secondly, since EY's findings all concur with KPMG's finding, why is the impact now RM1.438 billion? It is lower than the RM3 billion to RM4.5 billion than previously thought. Are there any explanations for this revised value?
Finally, EY’s opinion that the impact is RM1.438 billion and not more than RM3.5 billion (and possibly up to RM4.5 billion) as previously reported. Does this mean RM2 billion to RM3 billion worth of transactions have been resolved? This is in fact a good progress, since 57% up to 67% of the contentious value respectively has been cleared.
In a nutshell, given these three observations, it is evident that EY’s SIR, albeit still work in progress, had managed to resolve up to RM3 billion worth of transactions. The balance of RM1.438 billion needs to have further audit verification works to be done in order to conclusively close the matter at hand.
When RM1.438 billion is disclaimed against any reliance place on it, it is thus reasonable to have it resolved prior to disclosure even if EY's stands by its work and Bursa stands by it opinion.
p.s. Please circulate to the Telegram/Whatsapp group and forums. Thanks.
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