Topics: Auditing, Audit, Auditor's report Pages: 2 (498 words) Published: September 18, 2011
Top executives of Transmile Group Bhd may have been aware of the overstatement of the group's sales figures when the unaudited annual accounts for financial year ended Dec 31, 2006 (FY06) were released to Bursa Malaysia on Feb 15, sources say.

Transmile's external auditor Messrs Deloitte & Touche is said to have alerted the management, namely chief executive officer Gan Boon Aun, chief financial officer Lo Chok Ping and the audit committee on the inaccuracy of the substantially high revenue of RM989.2mil for FY06.

However, it is believed the matter was not taken to the board level.

Chairman of the audit committee Chin Keem Feung is also an independent director. The committee members are Shukri Sheikh Abdul Tawab and Khiudin Mohd Mohd.

Gan and Lo are currently on leave. An executive committee has taken over the group's daily operations.

Chem Quest Sdn Bhd director Ong Teng Ping has been seconded as acting-chief financial officer of the chartered freight service provider.

Transmile announced on Wednesday that interim findings of a special audit showed the group's sales revenue might have been overstated by RM333mil in FY06, and RM197mil in FY05.

Transmile's filed unaudited FY06 results showed the group's revenue jumped 80% to RM989.2mil from RM550mil a year earlier. Net profit more than doubled to RM157.5mil against RM74.8mil in FY05. Its trade receivables swelled to RM381mil from RM111mil.

Transmile and Deloitte could not be reached for comment.

However, in a statement, Deloitte said it had had regular discussions with Transmile's management and audit committee to address certain transactions that could not be verified when they were first discovered.

It said the sharp increase in trade receivables prompted it to perform extended auditing procedures.

"Up to end-April, the matter could not be resolved to our satisfaction and we could not sign off an unqualified opinion on the accounts.

"Hence, the letter to the company directors...
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