Top Glove Corporation Berhad (TGCB) is a leading rubber gloves manufacturer. During one of the after-office meet-ups with your old friend, Andy Pamelo, he asked for your help to enlighten him on the performance of TGCB. He was planning to buy shares of TGCB and has studied some essential sections in TGCB's 2021 Financial Statements. The sections are presented in the "Top Glove Information for Q1" file in the Supporting Information for 12-hour Take-Home Assessment folder.

Andy referred you to the section on assets in the TGCB's Statement of Financial Position, and he was puzzled why the TGCB's brand, which is well-known around the world, was not listed as an asset of the company. Additionally, he was curious about the item "Intangible assets". He wanted to know what intangible assets and why they were included as assets, even though they have no physical substance?

Andy recognized the importance of cash in any business organization, and he was concerned when he saw that TGCB reported negative net cash flows from investing activities (for the group), as reported in the statement of cash flows. He was confused about this fact because TGCB is a profitable company. He wanted to know why a profitable company could report negative cash flows from investing activities.

Before both of you departed, Andy asked a final question about the independent auditor of TGCB when he referred to the opinion paragraphs of the report. In particular, he wanted to know the role of independent auditors in TGCB.

You had promised Andy to prepare a note addressing all the questions and will send it to his email.

TASK

Write a note to Andy to answer all his concerns. The note must explain the following questions as asked by Andy:

1. Why is TGCB's popular and well-known brand not listed as one of the assets? Why are intangible assets included as assets, even though they have no physical substance? Use the 4 characteristics of assets to support your explanation. (Word limit: 150 words or less)

Explain why TGCB reported negative net cash flows from investing activities. Should Andy be concerned about this situation? Include in your explanation the importance of other sources of cash flows and an example of a company with negative net cash flows from investing. (Word limit: 150 words or less)

Why does TGCB need to hire an auditor to audit its financial statements? Explain the process the auditors have to do before they can form the opinion that TGCB's 2021 financial statement gives a true and fair view of the financial position of the Group and the company? (Word limit: 150 words or less)