Muscle Berhad (MB) is a successful Jitra-based sports nutrition company that develops, manufactures, and markets sports nutrition products. This company plans to venture their business into the Europen Market through UK. During MB establishment for public company in 2010 it was unprepared for the Company Commission of Malaysia (CCM) reporting requirements and still lack of sufficient infrastructure to support its growth. However, MBs revenues greatly increased each year (MBs reported revenue was RM3M in 2010, RM17M in 2011, RM67M in 2012 and RM111M in 2013). Due to lack of accounting experience and MBs senior management too much focused on revenue growth, it failed to establish sufficient internal controls and keep proper books and records. Consequently, Board of directors (BOD) decided to appoint Abdul as a member of MBs BOD and chair of the audit committee from July 2012 through April 10, 2014. In September 2012, Abdul noted that MB had not disclosed certain perquisite compensation paid to its executive officers. Abdul, however signed materially false and misleading filings with the CCM that failed to disclose all perquisites MB was required to disclose under the SEC laws. In 2013, an internal auditor began a review to determine the amount of undisclosed perquisites paid by MB to its executives since 2010. While, MB continously make filing to CCM, they not realising that the perquisites compensation was materially understated until July 2014. REQUIRED:

Based on the above situation; (a) Explain TWO (2) situations in which the ownership and control lacks in the OOB case above. (6 Marks)