Part A Star Berhad is a company which is involved in oil and gas production. Permata...

Part A Star Berhad is a company which is involved in oil and gas production. Permata Biru Berhad (PBB), as the dominant shareholder, controls the selection and appointment of Star Berhad’s executive directors including the Chief Executive Officer (CEO). Star Berhad has gained public attention due to a project cost overrun scandal involving various malpractices. The internal auditor has issued a report on the loss of RM500 million to the company’s audit committee. However, the CEO explained that the losses were insignificant. No further investigations were conducted although ES, the company’s external auditor, has delayed signing off the accounts. Star Berhad’s board members were aware of the losses but they relied on the CEO’s explanation. Furthermore, none of the audit committee members have finance or accounting backgrounds and so they did not fully understand the company’s financial statements

. Required: a) Discuss the issues in Star Berhad.

b) Did the board members execute their roles effectively? Justify your answer.

c) If you were one of the board members of Star Berhad, what should you do when you got to know about the issues in the company?

Part B Justify the rationale of having two different individuals for the positions of chairman and the chief executive officer, respectively. Discuss.

please answer me before 5.30 . thank you

Expert Solution

Rahul Sunny answered 1 year ago

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