If you were the Finance Director of Eneready Berhad, what would be your response

to Lisa’s instructions?

Assume that I was the Finance Director of Eneready Berhad, I would be give
advice to Lisa and discuss with her about the impact of fraud because it is unethical and
against her professional code of conduct. If Lisa still not accept device or charge her
mind on hand, I would not to join and following her instruct. However, I also would be
report the issue to the board of directors (BOD) when during the board meeting. If the
reporting in BOD doesn’t work, I would go inform relevant authorities accordingly about
this in accordance. If problem still cannot be solved, I would get out of the situation by
resigning.

Another situation for if I was the Finance Director of Eneready Berhad is follow
the Lisa instruct. If I follow, the risks that maybe happen will take it by me. If the fraud
was discovered, I could face fines or even be dismissed and the defendant.
Discuss the implications of the action taken by Mr. Ismail to his firm Mikhail and
Co in relation to the professional audit code of conduct.

A code of ethics/professional audit code is necessary and appropriate for the

profession of internal auditing, founded as it is on the trust placed in its objective
assurance about governance, risk management, and control. It was include two essential
components;

1. Principles those are relevant to the profession and practice of internal auditing.
2. Rules of conduct that describe behavior norms expected of internal auditors.
These rules are an aid to interpreting the Principles into practical applications and
are intended to guide the ethical conduct of internal auditors.

Internal auditors are expected to apply and uphold the following principles;

1. Integrity
The integrity of internal auditors establishes trust and thus provides the basis for
reliance on their judgment.
2. Objectivity
Internal auditors exhibit the highest level of professional objectivity in gathering,
evaluating, and communicating information about the activity or process being
examined. Internal auditors make a balanced assessment of all the relevant
circumstances and are not unduly influenced by their own interests or by others in
forming judgments.
3. Confidentiality
Internal auditors respect the value and ownership of information they receive and
do not disclose information without appropriate authority unless there is a legal or
professional obligation to do so.
4. Competency
Internal auditors apply the knowledge, skills, and experience needed in the
performance of internal audit services.
 The implication of the action taken by Mr. Ismail to his firm Mikhail and Co in
relation to the professional audit code of conduct is it will make his firm Mikhail and Co
financial loss. Lisa was instructed Yursey (finance director) omitting the recording of
returned products worth RM 1.5 million and creates fictitious sales of worth RM 7
million. He also managed to do this by generating several hundreds of false invoices for
large industrial orders and by understating expenses. This will make the costs of
fraudulent financial reporting are harder to determine. Fines assessed for misleading
investors, civil suits to recoup investor and creditor losses and the unwillingness of
companies to extend credit to the business in the future all add up to a severe financial
loss for the company. It will make the public question about the integrity of the company.
The second implication is external confidence. The tampering of returned product
worth and fictitious sales of worth has been shown to be fraudulent. Once a fraud has
been uncovered, the company faces an ongoing problem of public trust in the
organization. It will make the firm may have to pay a higher price for credit, may be
refused membership in trade associations or might not be considered for a strategic
alliance.
The actions taken by Mr. Ismail also will implication the company morale. If the
fraud be found， it will affect the company’s culture and morale can be shattering. Any
association with a company that has perpetrated or suffered fraud can be troubling and
embarrassing for the people who work there. If employees leave the company, they may
carry an association with a fraudulent company into their next place of employment, even
if they were not involved.
Conclusion, the actions taken by Mr. Ismail will be making the harmful to his to
his firm Mikhail and Co. Also that, his behavior will also hurt himself. Once found
fraud, he may be facing the defendant, be fined, and even will be fired. The reputation
also will be bad and then making difficult to find a job because of the previous record
about fraud.