4000 Note 17 Professional fees include a payment made to the company secretary

4000 note 17 professional fees include a payment made

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4,000 Note 17 Professional fees include a payment made to the company secretary, auditors and tax agents. The Inland Revenue Board audited the company’s accounts for the years of assessment 2004 and 2005. Some financial discrepancies were found and the Inland
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12 Revenue Board took action for ‘fraud and wilful default’. An amount of RM100,000 was paid to the company’s tax agents as a professional fee. As a result, the company was required to pay only additional taxes for the two years of assessment, including a penalty payment. Also charged under professional fees is a sum of RM50,000 paid to a professional trainer to conduct a training program for the company’s staff. The training program was approved by the Malaysian Industrial Development Authority (MIDA). Note 18 The subscription is paid to “The Malaysian Association of Mineral Water Manufacturers”. Note 19 Quality accreditation expenditure was incurred to obtain the European Economic Community certification of Quality Standard from Brussels. Such a certification will facilitate the exporting and marketing of the company’s products to European countries. The certificate is expected to be issued sometime in early 2008. Note 20 Included in the repair and maintenance expenditure is the cost of replacing the existing wire fence around the factory with a high concrete wall, and installing new security features like special lighting and cameras for improved security, costing altogether RM150,000. Note 21 The company operates a special retirement fund for its workers, called the ‘ Loyalty Retirement Fund ’. It was designed to retain valuable and experienced employees from leaving the company. For each employee, the company contributes 5% of the employee’s annual salary into the fund. The employee is automatically entitled to the amount to his credit in the fund upon retirement or leaving the firm. The employees do not contribute anything towards this fund (and thus the attraction to the employees).
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13 For the financial period ending 30th September 2006, one employee left the firm and was paid RM50,000 from this Fund. During the relevant financial period the contributions and payments made were as follows: Fund RM Employees Provident Fund 150,000 SOCSO 100,000 Loyalty Retirement Fund 285,000 Total 535,000 Note 22 The company confirmed to the auditors that travelling involved the following: Nature and purpose of travelling RM Local travelling by company sales and marketing personnel 30,000 Trips by director to Mexico 75,000 Trips by director to Vietnam 25,000 Trip by director to Germany to inspect bottling machine. 10,000 The company confirms that the bottling machine in Germany was not up to expectation, and subsequently was not purchased. As for the trips to Mexico and Vietnam, the company was unable to provide the relevant supporting documents.
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14 Other information The following information was extracted from the tax computation for the year of assessment 2005: RM Unabsorbed capital allowance c/f to year of assessment 2006.
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