APM 11

DPMM NEGERI KELANTAN (REG. NO.: 196/56-3)31 December, 2012 Prepared by: Hareez Date: 01/13AUDIT PLANNING MEMORANDUM Reviewed by: Date: 01/13-------------------------------------------------------------------------------------------------------------------

1. INTRODUCTION

We have been re-appointed as the auditors for Dewan Perniagaan Melayu Malaysia Negeri Kelantan (Dewan) for financial year ended 31 December 2012.

2. CLIENT’S BACKGROUND

The principal objectives of the Dewan are as per note 1 audited account.

3. ASSESSING ENGAGEMENT RISK

Before deciding to accept the appointment of this audit engagement and to facilitate us in developing an appropriate audit plan, we have considered the following factors relating to engagement risk.

Management Integrity

Tuan Hj Mohd Rosli B. Ismail as the Yang Dipertua of the Dewan is responsible on Dewan’s affairs and financial management headed by the treasury, En. Kamaroz Zaman B. Mohd Salleh. Both of them are among successful businessmen in Kelantan.

Organisation and Management Structure

The Dewan management structure is systematically organized and the management style and capacity is consistent with the size and the growth of its business.

Conclusion

After considering the above mentioned factor, which affects our engagement risk, we are on the opinion that the engagement risk can be classified as medium risk client.

4. CLIENT CONCERNS AND SERVICE OBJECTIVE

In the current engagement, we are to perform an audit for the year ended 31 December 2012 and will be conducted in accordance


with approved auditing standards, guidelines and compliance with the relevant International Accounting Standard (IAS) & MASB and Akta Pertubuhan, 1966.

For any weaknesses that we noted during our audit, a Management Letter will be issued.

5. OVERVIEW OF AN ACCOUNTING SYSTEM

The accounts of the Company have been prepared under the historical cost convention.

For the year under audited, Mohd Suari bin Hj. Che Harun maintains prime documents and all financial affairs.

6. CONTROL ENVIRONMENT

Reliance can be placed on the internal control for the following reasons:-

a) Different staff maintains the books and recordsb) There is proper segregation of duties.

7. SUMMARY OF RISK IDENTIFIED AND AUDIT RESPONSES

Client appears to be honest and the representation can be relied upon.

Our audit response for Profit and Loss items and Balance Sheet items will focus on compliance and substantive test.

8. PRELIMINARY ANALYTICAL REVIEW

Proposed

Audited

Inc./(Dec)


2012 2011Results of Operations Ref

.RM’000

RM’000

RM’000 %

Income (a) 257 232 25 10.8

Expenses (b) 304 (289) 15 (5.2)

Operating (Over)/ Under (47) (57)

Major Balance Sheet Items

Cash and Bank Balances (c) 143 54 89 >100

Other Debtors (d) 45 19 26 >100

Other Creditors and Accruals

Fixed Assets

Investment

(e)

(f)

(g)

388

373

1069

224

372

1,069

164

1

0

73.2

0.3

-

a) This represents income received from Members’ fee, rental, DBC’s income, other income and dividend from shares.

b) This represents administrative expenses and mainly with salaries and wages, management expense, traveling & accommodation, company’s activities, legal and professional fees.

c) This represents cash in hand and at BIMB and CIMB.

d) This represents mainly outstanding rental, others debtor, utility and rental’s deposit.

e) This represents amount owing to rental deposit, Permodalan deposit, employee’s fund benefit, PERKESO and etc.

f) This represents net book value for fixed assets.


g) This represents investment on Konsortium Dewan, Sykt. Permodalan DPMM Kelantan Sdn. Bhd., Permodalan DPMM Kelantan Sdn. Bhd., Haji Kamaruzzaman (Koperasi), DRB-HICOM Berhad, Jerneh Asia Bhd and Johor Land Bhd.

9. ASSESSMENT OF AUDIT RISK

We have identified the following audit risks:

Area RiskCash and Bank Balances

- Cash in hand and at bank fairly stated

Other Creditors and AccrualsOther debtorsInvestment

- Amounts fairly stated

Fixed Assets - Verification of ownership and existence

--

Net book value fairly statedAll fixed assets are reflected in accounts

Profit and Loss account ---

Amounts fairly statedAccrual concept properly followsRecognition of capital and revenues expenses

10. COMPLIANCE AND SUBSTANTIVE PLAN

In view of the management responses on the internal control that we can rely on it, we will perform a compliance test and follows with substantive test on particular areas as follows:


ITEMS TEST

Cash in Hand and at Bank ---

Test on bank reconciliation.Obtain direct confirmation.Alternatively, used bank statement of account as confirmation from third party.

Other Debtors and Creditors

--

Creditors’ circularization on selected sample. Alternatively, test on creditors’ reconciliation, which supported with statement from creditor and vouched on any supporting documents.

Fixed Assets - Reasonable test on NTA.

Profit and Loss Account -

-

-

-

We would apply analytical reviews procedures on incomes and expenditures. Material or unusual variations from last year would be raised with client.

Transaction TestTo perform reasonableness test on emoluments.To perform reasonableness test on income and expenditure item to ensure that the amounts fairly stated.

11. MATERIALITY SCOPE

Total Assets (RM)

Net Operating Loss (RM)

Basis Amounts (RM)

1,630,588 - 1% 16,305.88- (47,177) 5% (2,358.85)


Since this is our fourteenth year audit for this company, we set materiality limit at RM 16,305.88. .

12. DEADLINE, BUDGETS AND STAFFING

12.1 We have planned for an audit schedule as follows:

Date

Commencement of field work 01/13Complete of audit field work 02/13Finalization of audit file 02/13Review by Principal /13Review by Atarek /13

12.2 Budgets

For Dewan fees estimated at RM3,000.

12.3 Staffing

Principal - Zuhair Bakri Bin Abu Bakar (ZZ)

Staff in charge - Ahmad Faris Bin Hashim (Faris)

Documents

APM 11