TRANSMILE

COMPANY
COURSE TITTLE
UDE 1013 Auditing I
LECTURER
Sir Mustaffa Bin Bukhari

GROUP MEMBERS
1. Adam Syakirin Bin Azman Elmiza UDE190027
2. Nurin Nazifa Binti Zakaria UDE210099
3. Mohd Danish Aiman Bin Mohd Mahathir UDE210146
4. Muhammad Irfan Daniel Bin Mohd Rafi UDE210150
5. Muhammad Alif Haikal Bin Azhan UDE210177
6. Sharifah Nur Salwani Binti Syed Mohamed Izzat UDE210187
7. Laila Maisarah Binti Noor Hisham UDE210207
TRANSMILE COMPANY BACKGROUND
Kuok Brothers Sdn Bhd
Robert Kuok Hock Nein
The controversy
- Financial years of 2005 & 2006
- Overstated it’s revenue by 530
millions
Started in 1993 Location
As a scheduled all-cargo
Subang Airport, Kuala Lumpur
airline
27th October 2020 Where is Transmile now?
- “Raya Airways Sdn Bhd”
Transmile Group Bhd found guilty
- Scheduled airline designated by
of furnishing misleading
the Ministry of Transport of
statements to Bursa Malaysia
Malaysia
 Effects that companies/persons faced from the fraud.

1. Stock Market

Resulting in a significant • Hit a peak of RM 14.40 Loss a huge amount of

drop in the value of • Decreased to RM 4.64 market value and has been

Transmile shares. • Reaching RM 0.50 per delisted from stock

share exchange.
 Effects that companies/persons faced from the fraud.

3 January

2. Shareholders RM 14.40
2010
• Shareholders loss a large
amount of money. 2007
March
• Drop in share price.
RM 0.50
Effects that companies/persons faced from the fraud.

The largest shareholder as at 28 April 2006 ;

19.5% 17.3% 4.4%

Trinity Coral Pos Malaysia JP Morgan
Sdn Bhd Bhd
Effects that companies/persons faced from the fraud.

3. Employees
• Involved cooperation between some of the organization’s key
employees and outside vendors.
• Huge effect on current and former Transmile employees.
• Major impact on their future career opportunities.
 Effects that companies/persons faced from the fraud.

4. Malaysia government
• As a result of the Transmile scandal, Malaysians' trust in
corporate governance and transparency has been compromised.
The National Integrity Plan promotes corporate accountability
and compliance to promote higher ethical standards by harming
the reputation of the government during a scandal like Transmile.
 Effects that companies/persons faced from the fraud.

5. Transmile group berhad

• The fraud had the most significant impact on the company. Devolution of a
cargo carrier from a public company to one with no active business and a few
subsidiaries or associate companies that have either ceased to operate or went
out of business. Upon completion of the sale, on July 16, 2013, they sold the
company's wholly-owned subsidiary, Transmile Air Services Sdn Bhd, which was
previously designated as a national freight carrier by the Ministry of Transport
in 1996. As a result, their reputation has been tainted so badly that they are
now considered one of Malaysia's worst and most well-publicized examples of
corporate governance failures. Since their stock was delisted on May 24, 2011,
they have yet to recover and have yet to recover from their disastrous situation
 Effects that companies/persons faced from the fraud.

6. Deloitte & Touche

• An external auditor, Deloitte & Touche, audited Transmile Group
Bhd. During the past decade, Transmile has enjoyed a long-
standing partnership with Deloitte & Touche. On the other hand,
a long-standing relationship might jeopardize the familiarity in
some cases. As a result, familiarity may adversely affect auditors'
mental independence and, hence, on the quality of their auditing.
Deloitte & Touche has been harmed by the controversy since it
became public, leading to questions about potential conflicts of
interest and auditor independence. There is a risk that it could
tarnish the reputation of the auditing profession and undermine
public confidence in auditors' work.
3 Components of Internal
Control

Neptune Jupiter
Control Mars
Control
Neptune is the Jupiter is the
Management
Despite being red,

Activities
farthest planet from
the Sun
Enviroment
biggest planet in
the Solar System
Risk
MarsAssessment
is a cold
place, not hot
Control Activities
● Assessing the risk and control of
fraud .
● Recommending actions to
reduce risk and improve control
.
● Effectiveness system of internal
control .
● Reporting detected fraud to the
top management team .
● Maintaining independence and
objectivity,
Control
Enviroment
• Conduct proactive audits
• Use computer -assisted auditing
(CAAT) techniques
• Performing real -time
monitoring
• Identify indicators of fraud.
Management Risk Assessment
• Conducting inspections .
• Provide more objective input .
• Anti -fraud program .
• Provide insights organizational
operations, control systems and
risks.
WHAT HAPPEN
TO TRANSMILE
COMPANY IN
THE PRESENT
TIME.
• Two former non-executive director
of Transmile Group Berhad were
fined RM300,000.
• Former executive officer (CEO) of
TransmileGroup Berhad was fined
RM2.5 million for being found
involved in allowing misleading
statements.
WHAT HAPPEN TO
TRANSMILE
COMPANY IN THE
PRESENT TIME.
• The Transmile Group Berhad website
is also inaccessible and the place
where Transmile Group operates has
also not been found.
• The one-high-flying air cargo
handling today has shrunk into an
inactive company and some
subsidiaries that have ceased
operation and are inactive
CONCLUSION
• The Transmile Group Berhad fraud
case was a result of the lack of
integrity, the indepedency of the
stakeholders.
• The Transmile company was hit by
an accounting scandal in 2007
where their revenue and profits
had overstated since 2004.
• The board of directors also has
failed in monitoring the
performance of the management.
 THANK YOU!

Link :
https://youtu.be/ysOpLVLtgeo