To Fiddle or Not to Fiddle

CASE STUDY 2

Synopsis
A financial controller in a Sino Malaysian joint venture was asked by a director representing the interest of the Chinese government , who was also a government official supervising foreign JV companies, to change the P&L position from loss to profit, so that he could paint a rosy picture in his report of JV performance under his charge.

Synopsis
This case introduces the scenario in which an accountant may face when he works in a foreign country in a joint venture. The dilemma can also faced by an accountant working in a family owned company in Malaysian, where decision is made by the ever powerful founder-owner.

Synopsis
The case also serves to illustrate the importance of corporate governance in the business world.

Corporate governance encompasses achieving corporate mission or objective, law compliance, upholding code of best practices and adherence to business and personal ethics.
The corporate governance could be the foundation of a better business world where fraud, malpractice, corruption could be minimised.

Objectives and Learning Outcomes

Relate the accounting training to date to explain the concept of true and fair view of financial statements. (Skill & attitude)

Understand and appreciates that an accountant must comply with the Malaysian accounting standards (now Malaysian financial reporting standards). Also as an overseas subsidiary of a Malaysian company, there is the need to consolidate the YBLCs account into the parent (group) accounts. (Skill & attitude)

Appraise the importance of corporate governance in the business world, and be aware of the elements in corporate governance. (Skill & attitude) Defend the principle of separation of ownership and management in the administration of the

company, and relate this to the directors fiduciary duty and duty of care owed to the company. (Skill & attitude)
Justify that corporate governance as a cornerstone for prevention of fraud, malpractice and corruption. (Attitude)

Develop strategies to inculcate the concepts & importance of corporate governance among executives and professional in business. (Skill & attitude)

Recognise the code of ethics and other trade best practices they have pledged to up hold. (Attitude) Be aware of the management problems that could be facing, and the need to be sensitive to issues, in cross cultural management in an international joint venture business. (Skill)
Apply the principles of international taxation when working in different countries overseas. (Skill)

Case Leading Strategy

Students should familiarise themselves with: Business law (basic principles of company law. law of contract, employment law etc) Financial reporting standards for Malaysia Principles of international taxation Tax avoidance vs. tax evasion Code of best practice for corporations Corporate governance Elements of business ethics Code of ethics for MIA members

Analysis
Suggest possible solution(s) for each of the issue(s) identified.

Issues/ problem faced by YBLC Ltd

Questions

Why is it wrong for the economic officer to make such a request?

What are the consequences of giving in to the economic officer/s request?

How would you ensure true and fair view of financial reporting?

Rubric Assessment
Poor (1) Moderate (2) Satisfactory (3) Good (4) Excellent (5)

Delivery & enthusiasm (40%)

No clear of ideas Show no interest and enthusiasm

Hard to follow of ideas Lack of enthusiasm and interest

Most ideas flow but focus is lost at times Limited evidence of interest in engagement with the topic
Limited use of visuals loosely related to the material

Clear flow of ideas Show interest in topic and engagement with class

Very clear and concise flow of ideas Show passionate interest in the topic and engagement with the class
Visuals augmented and extended comprehension of the issues in unique ways

Use of visuals (10%)

No use of visuals

Slight use of visuals

Use of visuals related to the material

Involvement of the class: -questions -generating questions -activities (30%)

No attempt to engage the class in learning

Little attempt to engage the class in learning

Questions and discussion dressed surface features of the topic Limited use of activities to clarify understanding

Questions and discussion addressed important information that developed understanding Appropriate activities used to clarify understanding

Excellent and salient discussion points that elucidated material to develop deep understanding Appropriate and imaginative activities use to extend understanding in a creative manner

Rubric Assessment
Poor (1)
Response to class queries (10%) Unable to response to questions and discussions Limited response to questions and discussion with no reference to theory/

Moderate (2)
Satisfactory response to class questions and discussion with limited reference to theory and research

Satisfactory (3)
Good response to class questions and discussion with some connection made to theory

Good (4)
Excellent response to student comment and discussion with appropriate content supported by theory.

Teamwork Peers evaluation (10%)