The Securities Commission Malaysia’s (SC) Audit Oversight Board (AOB) has called for Audit Committees (AC) of public listed companies (PLCs) to continuously and rigorously engage auditors to promote an effective audit process.
The AOB reminded AC on the importance of their role in driving audit quality improvements at the ‘AOB’s Conversation with Audit Committees’ virtual series. The series is part of the AOB’s ongoing engagement with AC to strengthen PLC oversight on auditors and the audit process. This is in line with the SC’s efforts to improve corporate governance in PLCs and increase investors’ confidence in the quality and reliability of audited financial statements. It is also part of the AOB’s capacity building initiatives for the accounting and auditing industry.
The AOB highlighted the need for AC to consider information in the Annual Transparency Reports (ATR) prepared by their audit firms, when evaluating the appointment and reappointment of external auditors. The ATR provides information on legal and governance structures of firms, measures taken to uphold audit quality and manage risks, and measurements of audit quality indicators.
In addition, AC were strongly encouraged to understand and discuss the findings and firm-level statistics shared in the AOB’s Annual Inspection Report with their respective auditors, to ensure that the risk areas identified are adequately addressed. Given the challenging business environment, the AOB also urged AC to continue assessing the impact of the Covid-19 pandemic on the internal controls of financial reporting.
Yesterday’s ‘AOB’s Conversation with Audit Committees’ marks the final session in a series of engagement with AC which started in November last year. Over 1,250 AC members from 715 PLCs attended the sessions, sharing insights on good practices by the AC in supporting audit quality.
