Audit Oversight Board (AOB) has publicly reprimanded two registered auditors, Lim Kok Beng of Ong Boon Bah & Co and Chan Kee Hwa of Khoo Wong & Chan for failing to comply with the International Standards on Auditing (ISAs) while auditing the financial statements of public interest entities (PIEs).
The two auditors were also found to have breached the registration conditions imposed by the AOB under section 31O(4) of the Securities Commission Act 1993 (SCA).
In addition to the reprimand, a monetary penalty of RM10,000 was imposed on Lim Kok Beng of Ong Boon Bah & Co.
The two auditors are the first to be reprimanded by the AOB in 2014. The audit regulator had in previous years taken action against eight individual auditors for failing to comply with auditing and ethical standards. The AOB emphasises that the reprimands do not necessarily suggest that the financial statements of the affected PIEs contained any material error or their financial reporting controls are weak.
“While we are pleased with the overall efforts taken by the auditors in Malaysia in ensuring the quality of their work, the AOB will not hesitate to take action to ensure auditors comply with relevant standards. The value of audit is the reliability of the reports issued by the auditors,” said Nik Hasyudeen, Executive Chairman of the AOB.
The AOB was set up by the Securities Commission Malaysia in 2010, to oversee the auditors of PIEs, protect investors’ interest and promote confidence in the quality and reliability of audited financial statements of PIEs. The independent audit regulator conducts yearly inspection to ensure audit firms comply with requirements of the ISAs and the relevant MIA By-laws. The AOB publishes the inspection findings annually which include key root causes which could impact audit quality.
