Flight of funds
QUESTION 1: Image you were a director of MTSB in 2006, what would be the steps you would taken to fulfill your fiduciary duties as a director.
The steps MTSB have taken to fulfill the fiduciary duties as a director according section 6 of Companies Act, fiduciary duties of a director.
Step 1 : Understanding about duties of director
To carry out your duties as a director well, it is necessary for you to be fully aware of the duties and responsibilities expected of directors. Directors are fiduciaries of the company which appoints them. A fiduciary is a person who is expected to act in the interests of another person.Hence, as a director, you have a duty to act in the way you honestly believe to be in the best interest and benefit of the
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Step 2: Having attorney conduct a legal audit or check up Through this step MTSB are able to aware about income tax that needs to pay but also discover where income is being derived and what expenses have been incurred at the same time get an overall picture of the financial health of company from time to time. For example appendix B.1, the expense for advertising and entertainment and travelling continues increase from year to year. The gap also quit big. Therefore, it should have explanation together with proof if necessary. It is such preventive approach to legal situations is designed to enable a company to identify potential legal problem early, therefore it minimizing legal risks and maximizing legal right. It can avoid the uncertainty and costs and prevent the incipient legal problem from manifesting. By this way, make the confidence level of investor increase to continue invest in company. There are no standard for conducting a legal audit in accounting. Therefore, to start may begin by examining the MTSB governing document to ensure the company is compliance with laws. The legal review also should be designed to report the current status of legal affairs, assist the board and management in evaluating present and potential legal risks and recommend a future course of conduct if necessary. However, it is not a guarantee that MTSB not involved in legal problem in future but it is preventive measure which can reduce risk, improve