UKAM4023 INTEGRATED CASE STUDY

UNIVERSITI TUNKU ABDUL RAHMAN

FACULTY OF ACCOUNTANCY AND MANAGEMENT
ACADEMIC YEAR 2022/2023
BACHELOR OF ACCOUNTING (HONOURS)
TUTORIAL QUESTIONS

TUTORIAL 12 – FINANCIAL STATEMENT FRAUD & FORENSIC ACCOUNTING

CASE: BREW Sdn Bhd
(This is a fictional case adapted and extracted from Jan 2022 past year)
Brew Sdn Bhd (BREW) founded in 1962 as a company importing and exporting coffee beans
to major retailers in Malaysia. In the six decades of their business, the company has been
continuously growing. Despite started as a company focusing on coffee beans, the company
now have a wide range of other beverage related ingredients and also supplies to cafes and
restaurants throughout the nation.

The management of the company are claiming that they are not much affected by the
pandemic and are not facing any severe financial difficulties. However, the shareholders
have concerns on the survival of the company especially in 2020 and 2021.

The following are extract of financial information for the past six years.
Extract of Financial Statements for the years ending 31 March….
  2017 2018 2019 2020 2021 2022
  RM RM RM RM RM RM
Sales 890,755 906,700 987,410 838,940 475,340 693,405
Net profit 204,870 215,678 233,950 187,430 (114,568) (101,165)
Non-current
assets 459,000 445,950 455,380 443,900 285,650 298,460
Cash and Bank 197,830 196,940 203,198 103,543 92,904 205,902
Accounts
Receivables 295,780 276,500 233,390 310,560 430,600 427,580
Inventory 102,500 103,220 112,433 129,325 143,470 289,012
Non-current
liabilities 517,530 523,531 551,295 588,179 628,179 782,903
Current liabilities 233,280 217,890 222,756 221,033 269,830 344,520

The company asserts that they have been managing during the pandemic, due to the
management skills of the managers. In hiring employees, the company ensures that they
select employees with proper qualification. All employees at all levels are ensured to have
necessary skills to handle their respective job scope. This is due to the manager’s
perception of ensuring that employees can be left to operate the business independently.
UKAM4023 &UKAM4024 INTEGRATED CASE STUDY
TUTORIAL 1 – STRATEGY: PART I
 UKAM4023 INTEGRATED CASE STUDY
TUTORIAL 12
FINANCIAL STATEMENT FRAUD & FORENSIC ACCOUNTNG

Required:
The shareholders are having concerns on the financial statements of the company and if
there are any possibilities of manipulation due to the drop in performances.
1. Using the appropriate forensic analysis tool, assess the following that could initiate
motivation for fraudulent activities
a. Profitability condition of the company
b. Liquidity condition of the company
c. Gearing condition of the company

2. What do you think are the excuse the company would use to justify their survival
throughout the pandemic?