The Winners and Losers of Malaysia's 2018 Budget

Malaysian Prime Minister Najib Razak on Friday announced a 280 billion ringgit ($66 billion) spending plan in the final budget before general elections take place in the next 10 months.

The premier lowered taxes for millions of Malaysians and increased social assistance as he gave an upbeat assessment of the economy. At the same time, those expecting corporate tax cuts were left disappointed and some toll concessionaires found themselves with fewer highways to collect from.

Here are the winners and losers.

WINNERS

Middle-income taxpayers

Najib announced personal income tax cuts of 2 percentage points for those earning between 20,000 ringgit and 70,000 ringgit a year. He said that would benefit 2.3 million taxpayers, including 261,000 people who wouldn’t have to pay the levy, and increase disposable income by as much as 1,000 ringgit.

Civil servants

The 1.6 million-strong force will get a 1,500 ringgit bonus over two payments, while government retirees will get half the amount. Najib also introduced more flexible hours and increased medical and education-related benefits. Employees of government-linked companies will also gain as the prime minister announced organizations will increase profit-sharing programs and introduce benefits such as substituting leave allowance for cash.

Agricultural economy

Najib outlined benefits of about 6.5 billion ringgit for farmers, fishermen, smallholders and rubber tappers. Voters from the agricultural sector have a higher weighting than their work, which contributes to less than a tenth of gross domestic product. Allocations include money for fertilizers, irrigation systems and replanting programs.

Planes, ships and oil rigs

Imports of aircraft, ships and oil rigs are among items that will be given relief from the 6 percent goods and services tax from next year. Cruise operators will also get relief from paying the tax on handling services by port operators for several years.

Student-loan dodgers

After warning student-loan dodgers three years ago of the dangers of non-payment, the prime minister is reaching out to them again to settle their debts. Najib has sought to woo younger voters with discounts on outstanding student loans and he gave them more time to remain eligible for such reductions. For those who just completed their studies, they will have a longer grace period before having to start to make payments.

Other winners

Venture capital: The minimum investment in venture companies will be reduced to 50 percent from 70 percent, while tax incentives will be expanded.
Pregnant women: Those in the civil service can leave work an hour early when they’ve passed the fifth month of pregnancy. For the private sector, the government is proposing 90 days of maternity leave from 60, matching what those in the public sector are already getting.
Comic book fans: They can rejoice too as more reading materials become zero-rated.

LOSERS

Companies

The budget focused on increasing disposable income for consumers but companies wishing for tax cuts after years of rising costs were left disappointed. Manufacturers in particular have struggled from higher operating expenses costs as a result of the implementation of minimum wages and the removal of energy subsidies.

Toll Operators

Toll collections will be removed on specific highways in the opposition state of Selangor, as well as battleground states of Kedah and Johor. Already, one toll operator said it’s awaiting "receipt of further details" from the government before commenting on the loss in collections.

The Opposition?

The battle for votes continues to be an uphill one for opposition groups with a lack of access to resources that Najib and his coalition have at their disposal. The election-friendly budget may be a swing factor for voters battling higher costs of living even as they blame the government for the increases.

by cindy

The Pros of Becoming an Auditor

·         Auditing is mentally challenging and stimulating. Although auditing does not ‘create’ or ‘make’ things, it’s highly analytical.

·         Auditors normally work in teams. A lot of learning happens on the job through team interactions. You learn from more senior colleagues and get to teach and mentor junior staff. Very tight deadlines are also a common feature of an audit engagement and it is essential to have support and cooperation from everyone on a team to achieve a task, therefore, you often form strong bonds and friendships.

·         Variety is a typical feature of the job. You regularly move from client to client and from office to office applying your skills and knowledge to a new set of circumstances continuously building your experience and expertise without being bored of doing the same thing.

·         Conflicts with the clients and within a team are sometimes unavoidable so you learn to negotiate and be assertive at the same time.

·         Travel can be a great part of the job, whether it’s a remote mine site in Leonora, a client’s office in Jakarta or an inter-state training seminar at a country resort.

·         A good sense of humour is necessary, especially during a high-pressure, long-hours assignment with a client. Practical jokes amongst team members are not uncommon!

·         At the end of a big engagement there is often an all-expenses paid client’s dinner where everyone gets together to relax, socialise and celebrate a job well done.

Start considering areas within accounting where you feel you would shine. Some key employers in Audit include the Office of the Auditor General, the Big Four, Banks and many mid-tier firms. Recruiters like Robert Half are also currently looking for internal auditors due to demand. They also give a good description of the work involved in audit.

by cindy

Auditors' Responsibilities Regarding Fraud

Major scandals that have affected the accounting profession in recent times have usually been as a result of fraud. Therefore, in order to maintain confidence in the profession it is important for auditors and directors to understand their role in the prevention and detection of fraud.

ISA 240 the Auditor's Responsibilities Relating to Fraud in an Audit of Financial Statements recognises that misstatement in the financial statements can arise from either fraud or error. The distinguishing factor is whether the underlying action that resulted in the misstatement was intentional or unintentional.

It is important to note that fraud is a criminal activity. It is not the role of an auditor to determine whether fraud has actually occurred. That is the responsibility of a country's legal system. Auditors must be aware of the impact of both fraud and error on the accuracy of the financial statements.

Fraud can be further split into two types:

• fraudulent financial reporting - deliberately misstating the accounts to make the company look better/worse than it actually is
• misappropriation of assets - the theft of the company's assets such as cash or inventory.

The external auditor's responsibilities

The external auditor is responsible for obtaining reasonable assurance that the financial statements, taken as a whole, are free from material misstatement, whether caused by fraud or error. Therefore, the external auditor has some responsibility for considering the risk of material misstatement due to fraud.

In order to achieve this auditors must maintain an attitude of professional scepticism. This means that the auditor must recognise the possibility that a material misstatement due to fraud could occur, regardless of the auditor's prior experience of the client's integrity and honesty.

ISA 315 Identifying and Assessing the Risks of Material Misstatement Through Understanding the Entity and Its Environment goes further than this general concept and requires that engagement teams discuss the susceptibility of their clients to fraud. The engagement team should also obtain information for use in identifying the risk of fraud when performing risk assessment procedures.

To be able to make such an assessment auditors must identify, through enquiry, how management assesses and responds to the risk of fraud. The auditor must also enquire of management, internal auditors and those charged with governance if they are aware of any actual or suspected fraudulent activity.

Despite these requirements, owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements may not be detected, even when the audit is planned and performed in accordance with ISAs. The risks in respect of fraud are higher than those for error because fraud may involve sophisticated and carefully organised schemes designed to conceal it.

Reporting fraud

If the auditor identifies a fraud they should communicate the matter on a timely basis to the appropriate level of management (i.e. those with the primary responsibility for prevention and detection of fraud). If the suspected fraud involves management the auditor shall communicate such matters to those charged with governance. If the auditor has doubts about the integrity of those charged with governance they should seek legal advice regarding an appropriate course of action.

In addition to these responsibilities the auditor must also consider whether they have a responsibility to report the occurrence of a suspicion to a party outside the entity. Whilst the auditor does have an ethical duty to maintain confidentiality, it is likely that any legal responsibility will take precedent. In these circumstances it is advisable to seek legal advice.

Directors' responsibilities

The directors have a primary responsibility for the prevention and detection of fraud. By implementing an effective system of internal control they should reduce the possibility of undetected fraud occurring to a minimum.

The directors should be aware of the potential for fraud and this should feature as an element of their risk assessment and corporate governance procedures. The audit committee should review these procedures to ensure that they are in place and working effectively. This will normally be done in conjunction with the internal auditors.

Internal auditors may be given an assignment:

• to assess the likelihood of fraud, or if a fraud has been discovered,
• to assess its consequences and
• to make recommendations for prevention in the future.

Audit procedures

As well as adopting an attitude of professional scepticism the auditor is required to perform the following procedures in light of the risk of fraud:

• Discussion amongst the engagement team regarding the susceptibility of the client to fraud;
• Consider the risk of fraud when documenting and testing internal controls;
• Enquiring of management how they: assess the risk of fraud; and identify and respond to the risks of fraud

  by cindy