1.

0 Introduction

For Bachelor in Accountancy (Hons.) program of UiTM, all students are required to undergo
six months compulsory industrial training on their seventh semester in final year. This
industrial training is held to expose students to the real working environment and provide
useful experience that would be helpful for students to build their career after graduating in
the future. Therefore, by the advice and recommendations of lecturers including the
coordinator of industrial training program, students were encouraged to apply internships at
the firm which has the nature of works in the related field such as accounting, auditing,
taxation and so on.

This industrial training program aimed to enhance students skills and improve their
knowledge in order to produce the graduates that skilful and competent. Apart of that, this
training would also help to enhance confidence level among students and also equip
students with various of skills such as communication, analytical thinking, leadership and
whatnot. Students will also get a chance to experience the environment of working in the real
world in particular sectors that they applied in. This program also train students in their
problems solving skills in order to survive in various problematic situations.

1.1 Company Background

I have been given a chance to do my internship at Ernst & Young of Kota Kinabalu Sabah
(EYKK) starting from 1st August 2016 until 31st January 2017. Generally, Ernst & Young has
been known as one of the Big Four of audit firms in the worldwide. Here in Kota Kinabalu
branch, there are five departments which are assurance, taxation, finance, information
technology and management and administration. I have located in the assurance department
in a team led by Manager, Ms Siti Jamariah Osli. This team consists of numbers of auditors
holding their own positions such as supervisor, audit senior and audit associate. Besides the
staff members, this team also has several trainees which including myself.

This company has safe and comfortable working environment that also complete with
technologies such as thumb print system and network sharing system. Almost all the
systems access in the office are protected as this audit firm need to maintain the privacy and
confidentiality attentively. In order to monitor work performance of an employee including the
trainees, timesheets system is being used globally so that management can monitor the
employees performance. In overall, the security system of this company is very good and
also flexible for fieldworks as auditors do not need to attend office first to punch in their
attendance instead they can go directly to the sites, this help to save time and cost.

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1.1 Company Background (Continued)

Ernst & Young Logo

Name : Ernst & Young, Kota Kinabalu

Type : Audit firm

Address : Suite 1-10-W1, 10th Floor, CPS Tower Centre Point Sabah, No. 1,
Jalan Centre Point, 88000 Kota Kinabalu, Sabah, Malaysia

Contact No : +6088-235 733

Departments : 1. Assurance department

2. Taxation consultancy department
3. Finance department
4. Administration and management department
5. Internal control system and information technology department

Our team :

Ms Siti,
Manager

Ms Jenny,
Supervisor

Ms Gina,
Audit Senior

Audit Associates

Trainees

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2.0 Summary of works done

2.1 Early briefing

In general, for newcomers in any organization will be given an early briefing. On the first day,
the Supervisor, Ms Jenny gives a short briefing to me and other new trainee member. She
introduced us to the company background and our teammates including staffs and other
trainees. She also shows to us the locations of various departments, washroom and the
working space provided for trainees.

After complete filling in the payroll and other forms required by management, I met
my team leader and also the Manager, Ms Siti. I introduced myself as the new trainee and
hand over the Reporting Letteri together with other necessary documents from university.
She also asked on my capability to work outside of office for fieldworks including the
transportations matters and whatnot. Besides that, she remind me on important rules and
regulations of the company specifically on the lift available. For trainees, we could have a lift
whether it be emergency or on personal reasons, however we need to repay the lift by either
deducting the daily allowance or to extend the working days after the due date which
supposed to be at the end of January 2017. Apart of that, for university reporting purpose,
she emphasized to maintain the privacy and confidentiality of informations from the
acknowledgement of outsiders.

After that, all the new trainees brought to the information technology department to
install the fingerprint access. The online timesheets system is used to monitor employees
works done and performance. All this system shows the presence of good internal control
system inside the company.

2.2 Early tasks

During my first week at the company, I received numerous of simple tasks to assist the staffs
such as help to file in documents, send out bank balance confirmations to the counter,
convert last year working papers for several companies, perform sales tests, casting financial
audit statements, key in data from clients trial balance into the working trial balance template
and assisting administration staffs to prepare the training materials for the audit staffs.

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 At the end of the first week I received a new task to get a chance to get involve in
overall audit process for first three companies from Audit Senior, Ms Gina. I managed to start
for Company A (with investment business nature), however the other audit team which lead
by Manager, Ms Belinda requested to Ms Siti to lend them two of our teams trainees to
assits them for their urgent audit works and one of the trainees happenned to be me.
Therefore, my manager, Ms Siti asked me to hand back over all the audit tasks that I just
received and start to follow the new team leader.

2.3 The temporary transfer

In the new team, I get to lend a hand for one month period approximately in assisting them to
complete their fieldwork. That is the first time I got a chance to go out to the clients place and
performed audit fieldwork. During the one month transfer, I have been taught by Ms Belinda
and other audit staffs on vouching, call over, casting and many other related audit tasks. I am
to get to learn from many more members from the transfer. I get to learn many new things
from the team eventhough I have a little tought time to communicate with the members as all
of the members are Chinese and they are more comfortable to speak in Chinese language
with each other.

Besides the audit tasks, the staffs of this team also taught me a lot on MS Excel tips
and tricks and also how to use printer and scanner. Upon the transfer I get to learn that each
audit team has different working style such as the vouching style. The vouching procedure
for Ms Belindas team are much more complex and much detail. For example, to confirm a
reasonableness of a purchase transaction, I need to check carefully the flow of the
transaction by checking the date of purchase order, delivery order, payment voucher and
official receipt. Plus, in almost every transactions, I need to check the clearence by
confirming the amount of cash in and out from bank statements.

This team also loves to teach me a lot as they know I have not yet familiar with the
audit procedures compared to the other senior trainee. Every time they gave me a task such
as to call over an audited financial statements, they tell me the proper way on how to do and
also the purpose to do so. That is when I know that the risk of making mistakes on the
preparation of the audited financial statements could lead the company into a massive
problems later. During the time of working in this team, I get to practice to speak more to
people whether it be the members or the client. This helps a little bit to improve my
communication skills and also enhance my self-confidence in dealing with people.

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 During this one month transfer, I got to accidentally making unnecessary mistakes
due to the miscommunication with the staffs. This caused me to do double works. However,
things get better as I could redo the same task much faster than the first time. The team also
managed to get the audit work done throughout the period. The mistakes I did also give me a
lot of important lessons too. I also get to teach myself to always be positive and think
positively and just be sure that there is nothing much to worry because eventually everything
will be alright in the end. I am thankful to Ms Belinda and all the team members that helped
and taught me more about the audit techniques, procedures and so on.

2.4 Back to the original team

Since a lot of things happened in one month time, going back to the original team is the
moment I have been waiting for quite sometimes. I could not wait to see my Manager and the
other team members again. On 1st September, my wish comes true, I am back in the original
team, ready to outperform my best to help the team. Therefore, I continued helping with the
previous task where I last stopped, which is the audit on Company A. I continued converting
last year working papers and complete them with the current years data and information
provided by the client. For the first company that has a quite big size and scope compared to
other small and dormant companies, this took me a very long period of time to complete the
working papers itself. At times I will stuck along the process as I need to go to clients place
to be able to continue the work. So, the Manager and the other staffs will ensure that each of
the trainee will have things to do, they usually will hand out other client company to audit
whenever it looks like we free. Therefore, I got a chance to handle the audit works for many
companies with various types of business activities and industries. Basically, throughout my
involvement on the audit works, I have learned the real audit process which including;

1. Requesting documents
2. Preparing an audit plan
3. Scheduling an open meeting
4. Conducting fieldwork
5. Drafting report
6. Setting up a closing meeting

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2.5 Six audit process
2.5.1 Requesting documents

Once the audit engagement commenced, auditor supposed to have full access on the clients
documents in order to get sufficient audit evidence. Usual practice as I observed here is
client will first provide us with their trial balance, income statement, balance sheet as well as
general ledger. Along the audit process, we could by law, request clients other supporting
documents such as the payment voucher, receipt voucher, official receipts, bank statements
etc. In addition, auditor also will usually request the meeting minutes and copies of bylaws
and standing rules.

2.5.2 Preparing an audit plan

After done with the first step, auditor could start to use all the data and information that can
be extracted from clients books to be filled into own working papers in our case by using MS
Excel. This working papers will help us to observes if there is any irregularities or
misconceptions carefully with the aid of risk management tools such as running a planning
materiality and tolerable error test. An auditor then can see what matters that need to be
given attention and what to do to solve the issues arise. Then, a proper audit plan is drafted.

2.5.3 Scheduling an open meeting

Senior management and key administrative staff of client are then invited to an open meeting
during which the scope of the audit is presented by the auditor. A time frame for the audit is
determined, and any timing issues such as scheduled vacations are discussed and handled.
Department heads may be asked to inform staff of possible interviews with the auditor. This
supposed to be performed so that the future fieldwork will easily carried out later.

2.5.4 Conducting fieldwork

The auditor takes information gathered from the open meeting and uses it to finalize the audit
plan. Fieldwork is then conducted by speaking to staff members and reviewing procedures
and processes. The auditor tests for compliance with policies and procedures. Internal
controls are evaluated to make sure they are adequate. The auditor may discuss problems
as they arise to give the organization an opportunity to respond. As some of the issues will
need auditor to have discussion with client to understand better on the issue as auditors may
not fully understand on certain business transactions by their own.

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2.5.5 Drafting report

After all the four steps earlier done, the auditor prepares a report detailing the findings of the
audit. Included in the report are mathematical errors, posting problems, payments authorized
but not paid, other discrepancies and other audit concerns are also listed. The auditor then
writes up a commentary describing the findings of the audit and recommended solutions to
any problems. These results and outcomes are shown in the working papers with the help of
MS Excel software. This will ease the review of works process for audit associate or senior,
manager and also partner.

2.5.6 Setting up a closing meeting

The auditor solicits a response from management that indicates whether it agrees or
disagrees with problems in the report, a description of management's action plan to address
the problem and a projected completion date. At the closing meeting, all parties involved
discuss the report and management responses. If there are any remaining issues, they're
resolved at this point.

2.6 Further learning outcomes

Basically the industrial training for six months give me a lot of lessons to learn specifically in
the field of auditing and assurance. In class AUD589, Auditing 1 previously, the lecturer, Ms
Hayati has provide us with basics image of auditing. As I am practically practice in this field I
get to see the surface of audit process and the trivial matters related to audit works through
the whole process.

There are many process I have been get involved in, starting with the audit
preparation which is basically trainees part which is to prepare the working papers. Usually
the client company is an existed client, therefore the preparation of audit working papers is
much more referring to the previous years working papers. The staffs or manager will asked
us to convert the last year working papers into the current year first. The working papers
consist of number of sections depending on the clients companys size and types of
business industries. For example section A for assets, B for liabilities C for expenses
and D for revenues. This working papers shows details on the analysis of clients books of
accounts and necessary audit works that has been done to confirm that client are complying
with the related accounting and auditing standards and there is none fraudelent activities
being commit.

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 The second phase, after done with the preparation of audit working papers, the
analysis of raw data and information provided by client will be initiated. Generally our audit
team will receive the trial balance, balance sheets, income statement and general ledger
from client upon the audit engagement. The auditors then will start to prepare working trial
balance to analyze whether the information provided are true and fair on the surface.

The next part will be to detail the audit works which involve performing the audit
confirmations, reasonableness test, etcetra. One of the audit confirmation is bank balance
confirmation. In the clients books of accounts, stated the bank balance on certain amount for
example RM 500.00, this balance might be true or false. Therefore, besides analyzing the
bank statement copy and the bank reconcilation in clients book, auditor also need to send
out to bank or financial institution to confirm the balance as at the exact date. Besides bank
confirmations, balance confirmations will be send out to the third party after getting the
consent from client, the third parties are generally the creditors and the debtors.

Other than that, the assets such as land, motor vehicle, inventories and etc. Will be
needed to be confirm its existency and accuracy. The procedures that can be done to confirm
the ownership of a land is by sighting the original land title from client or perform the land
search from Land and Survey Department. Usually, sight the original land title will be done
beforehand as it is faster and took less cost compare to performing land search as it required
a certain amount of land search fee. For motor vehicle, we usually request to see the original
registration card to confirm the vehicles ownerships. For inventories or stocks, procedures
such as stock take will be a help to confirm the existency and accuracy in amount of this
particular asset.

Besides asset and liability, revenue and expenditure also need to be analyze
thoroughly along the audit process especially the expenditure. Audit work that usually
performed for this called vouching. After go through the expenses ledger, auditor need to
vouch to the supporting documents including payment voucher, receipt voucher, official
receipts, delivery and purchase order, bank statement, pictures, memos, letter and etc. In
order to start the vouching process, an auditor need to prepare the planning materiality and
tolerable error test first. This is because, the expenses claimed by the client might be a lot,
so, materiality concept will be much of help for an auditor to lessen the burden of vouching
works. However, as one of audit associates advice, for legal and professional fee, penalty
and some expenses with such nature, the materiality concept is not so important. In other
words, these type of expenses are necessarily be vouched.

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 Critical part of working papers is on the taxation as well as deferred taxation due to
the complexity of tax computation. Usually, the staffs will not let the trainees to do this part
alone. Hence, the audit senior or associate will help trainee to complete this part.

Other than to confirm the true and fair of clients accounts, auditor are also need to
observe the clients minutes of meetings, annual return and other related statutory forms
prepared and provided by the appointed company secretary of the clients company. The
staffs called this as doing the statutory audit.

Once all of those process of audit done, an audited financial statements will be
prepared for client. For this process, audit team will be assisted by the administration staffs,
specifically the typists. They are the person in charge of typing the audited financial
statements prepared by the auditors. Once the audit works reviewed by the audit associate
or senior, then the manager and lastly the EY partner and there is no more mistakes to be
found, the signing pages will be prepared for client and partner. Therefore the audit reports
will be finalized.

As a trainee with less knowledge and experience compared to other audit members,
we usually given a domant company or small company to be audited. For bigger size firm, a
trainee will be involved in a trivial process such as to perform vouching, sales tests and etc.

Along my internship, a problem that I ever encounter is when I was assigned to

handle audit on club and charity organization named it Company C. The process of audit
are quite in conflict, as the Manager expect me to complete the work in short time. However I
encounter some problems since the process are a bit different from the other companies as
the client did not prepare proper bookeeping records. All they have provided us were only the
bank statements and receipt and payment analysis that they prepared by themselves in their
own format which is hard to understand. While, the senior staff who asked to supervise me
for the work at that time are engaging with a fieldwork. Therefore, I took plenty of time to
understand the analysis by my own. It cause the completion time to be dragged longer which
also means I could not met my managers expectation. However, my manager provide the
best solution for the problem. Finally I able to finish the audit works without any further
problems.

One of unique experience is on the first month when I got transferred to a different
audit team for a month. Eventhough I only get chance to help only on vouching, calling over,
casting and do the subsequent measurement, I get to learn a different style of audit
techniques from the team and been taught a useful lessons by the teams manager, Ms
Belinda and the other staffs as well. At first, I felt a little bit pressured since it is on my second
week of the month and need to adapt with another teammates that I have a little tough time

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to communicate with. However, I am glad because it makes me realized that the more staffs I
got to know, the more I get to learn from my short six month internship.

Besides learning the related matters on accounting, taxation and auditing. This six
months internship also provide me with another lessons related to life. In real life, an integrity
is the best quality one has to possessed. Integrity means a firm adherence not only when
people looking but also when there is nobody around. Honestly, on my first week as I could
not adapt well with the working environment as there is no personal working space provided
for trainees, I got demotivated and imagine myself could sneak out of office during working
hours. However, thinking again about an unseen matters that could be questioned later
maybe not here in this world but hereafter, about the obligations and responsibilities as an
employee, I came back to my sense to always do the right thing.

2.7 Audit procedures

The way of doing audit, the techniques which used during audit can also be called as audit
procedures.This procedure is operated by the following procedures.

2.7.1 Records examination

This audit procedures is commonly used by the auditors. The inspection of books and
documents is made to verity the validity of data. The process of key in data into the working
papers template ease this procedure to be done.

2.7.2 Compliance

Compliance means to check the arithmetical accuracy of accounting record, the balancing
accounts can be compared with the vouchers to test the reliability of data.

2.7.3 Ticking

Ticking means the policy if the work against an entry in books of accounts to show that it has
been examined by the audit various arks are used for addition, posting calling, forward and
balance whatnot. Ticking is generally done with pencil, although some auditors also use pen
for this purpose.

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2.7.4 Casting

Casting means the checking of addition and financial statements .This job is generally done
by junior audit staff or a trainee like me. Most auditors used mechanical instruments for this
purpose. Usually all the series of item that bring up to one sum balance is necessarily be
casted to ensure the computation made is right.

2.7.5 Calling Over

Calling over means the completion of entries in a book with its supporting documents or
vouchers .This job is done by two clerks one reading the item to the other clerk pronunciation
is necessary to distinguish between some words. In our practice, calling over mostly done to
check the audited financial statements. For example in the balance sheet gor stated the item
of property, plant and equipment and the details of the computation is on note number 5.
Thus, we need to comfirm that the note number 5 is really the details of the property, plant
and equipment.

2.7.6 Vouching

Vouching is very important audit technique. The act of vouching consist of checking the
documentary evidence such as cash memo, bills, and invoices as should establish. The
accuracy and truthfulness of the entries appearing in the books of accounts and in those
cases where it is not so, the matter are noted or discussion and if the auditors still remains
unsatisfied, the outstanding are reported to the client.

2.7.7 Verification

When an auditor has vouched the entries appearing in the books of accounts his duty is not
thereby fly discharged if appointed for audit under the act he has to report whether or not the
balance sheet exhibits a true and correct view of the state of affairs of the company for this
purpose he should satisfy himself on the following points.

1. The each asset and liability is correctly valued and correctly stated in the balance sheet.

2. That the actually existed at the date of the balance sheet.

3. That they are properly of the business.

4. That they are not suffering from a charge except that disclosed in the balance sheet.

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The audit procedures or techniques carried out to achieve the forgoing objective are known
as verification.

2.7.8 Reporting

After the above steps, the auditor is required to bring to the knowledge of his clients what he
has come across during the process of auditing. Consistent with team oriented working
environment, the subordinates need to report the audit outcomes and explain the audit
evidence obtained to the superiors including manager, senior manager and partner.
Therefore, the observations and comments as a medium of reporting should be jotted down
clearly in the working papers to help the superiors easily understand.

2.8 List of Companies

Along the internsip period, I have assist auditing in numbers of companies. However due to
privacy and confidentiality, it is prohibited to share the client companies identities. Thus, I
named them using alphabets in this report, the companies including:

Compan Business activity

y
A Investment
B Hotel industry
C Club and charity organization
D Bookstore
E Automobile industry
F Retailing industry
G Manufacturing company
H Dormant
I Oil and gas

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3.0 Strengths and weakness analysis
Strengths
Communication Skills
Improve my communication skills because
most of the time I have to interact with
client.
Learning skills
I am more willing to learn from many senior
staff as well as from other trainees. Each of
them has their own speciality and unique
working styles.
Handling difficulties
I can handle a different nature of business
and size of firm especially holding company
which is more difficult to audit.
Administration Skills
Learn how to do admin tasks such as
receive call from clients, dealing with
scanner and photocopy machines.
Opportunities
Real working environment
This internship program had exposed me to
real working environment that could help
me in the future.
Gain experiences
Gain experience to do audit on many
companies with various types of business
core activities.
Clear view
I had clear view on audit process by given
chances to go to clients company for
fieldwork.
Related with courses taken
To be grouped in assurance and advisory
department really give me experience that
related to my course.
4.0 Conclusion and recommendation
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Weaknesses
Punctuality
Sometimes, task given cannot be done in the
time given as there are amendments or there
is another issue arise.
Lack of confidence
Certain clients could not cooperate well with a
trainee as they preferred permanent and
experienced auditor to audit their accounts.
Lack of knowledge and skills
I have not yet master in some accounting
knowledge for example on taxation which
affect my capability. My communication skills
also low when I need to deal with clients that
comfort to use Chinese Language.
Threats
Limited facilities
Number of computers inadequate for all
trainees. Sometimes this situation affect the
work efficiency.
Late submission
When there is any insufficient information, we
will ask client to give the documents to us but
client always submit late. So, it caused me to
delay some audit tasks.
Along this six months internship at Ernst & Young Kota Kinabalu, I have gained a valuable
experience that could not easily be obtained. This firm is an outstanding audit firm in
worldwide where every scope of works is challenging especially for beginner like trainee.
However, with the help of kind senior staffs of the firm that willing to share their knowledge,
all of the hardships become more easier along the learning progress.

I have learnt a little bit much on how to do the financial auditing for real. I get to learn
a lot of audit techniques and procedures and also getting familiar with the audit process.
These experiences will eventually help me in building my career better in the future. I have
realized that I am able to do almost everything when there are effort, commitment, patience
and prayer. I am feeling blessed and grateful to have the chance to experience all of these.

I hope this internship program gives a meaningful and valuable experience not only to
me, but also to the entire trainees in no matter what field they were in. I am looking forward
for one more semester before graduation so that I could go back to work again and to carry
UiTMs name with pride.

Last but not least, I also would like to recommend that this internship program will
continuosly be held in the next many years more. As I am honestly believe that the most
powerful lessons is when one practically doing things for real besides only knowing the
theories on the surface. Furthermore, this kind of program gives more benefits than what it
costs not only to the university but also to the whole industries of the nation.

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