CORPORATE LAW

OK Sdn Bhd had appointed Razif to audit the company's account. While doing the audit, Razif discovered several invoices that showed signs of having been altered. He also found that some files were missing from the file cabinets in the accounts office. He enquired about it and the company's managing director, Tuan Suhaimi, told him that the company's office was broken into a few weeks before and some files had been stolen. Tuan Suhaimi also informed Razif that the altered invoices were due to some clerical mistakes.

Razif accepted the explanation and without investigating it further, he then prepared a report which was tabled at the company's annual general meeting. It turned out that Tuan Suhaimi had siphoned nearly RM 1.4 million from the company and transferred them to his personal account. Tuan Suhaimi had since migrated to Australia taking the money with him. Mona, who relied on Razif account report has subsequently subscribed and paid for the shares in the company and she suffered losses.

The company and Mona now wish to take action against Razif. Advise Razif. (50 marks)