Peregrine Investment Holdings Case

Executive Summery

This report provides an analysis of the liquidity and financial problem of Peregrine Investment Holdings

Limited (PIHL). The method of analysis includes implementation on findings, ratios, credit situation and

financial stability. The result of findings indicates that how PIHL collapsed step by step. Particularly, the

company met the Asian financial crisis and poor performance in reporting and accounting procedures,

risk management and internal audit. The report found that management took remedial action to the risk

which caused by Asia financial crisis, but it did not work. Recommendations include management should

consider their business nature and sufficiently understand the world financial situation, the company

should change the way of internal control, they should use effective and efficient internal control system.

If there was no financial crisis, the PIHL might not close down suddenly. Due to the influence of financial

crisis the taxi company was unable to pay PIHL which made PIHL's financial problems visible and none of

any companies was able to help PIHL, therefore PIHL went bankrupt.Methodology

In this report, the material came from one month collection by team members. To understand the PIHL's

operating situation and risk. Basically, we relied on ECU database which could be more reliable. We found

a journal which was written by the Managing Director of Peregrine Fixed Income Limited (PFIL), a

subsidiary of Peregrine Group, through searching ECU library. The journal is more reliable academic

resource because it came from academic website. Our team members found news through searching on

Factiva of databases on ECU library website. This source is not as reliable as other sources such as book

or journal, but we still used it as a consultative material. We also used theories from Auditing &

Assurance Services book and internal control standards 2010. In addition, we downloaded a report from

the Financial Services and the Treasury Bureau of Hong Kong government which was a very reliable

government report. Through the observation of the government report of the PIHL, team members

inspected the accounting