Incorrect accounts are the board’s problem

WHEN the accounts of a listed company turn out to be unreflective of the company’s financial performance and position, there are several options for enforcement action. The worst-case scenario (for those responsible for the accounts, that is) is when the regulators take court action that may lead to heavy punishment.

Perhaps the best-known example began in July 2007, when three former top executives of Transmile Group Bhd were charged with abetting the cargo airline in making a misleading statement about reported revenue of RM338mil. This referred to the company’s quarterly report that contained the unaudited consolidated results for the financial year ended December 2006.