The Securities Commission Malaysia’s Audit Oversight Board (AOB) has released its Annual Inspection Report 2024, providing key insights into its supervisory role over audit firms and individual auditors registered with the Board.
The AOB’s inspection in 2024 includes assessments of 40 partners and 40 audit engagements across 13 audit firms, which include the Major Audit Firms.
These nine Major Audit Firms collectively audit 76% of Public-Listed Companies (PLCs), representing 95% of total market capitalisation in Malaysia. These firms also audit 1,319 Schedule Funds accounting for 99% of the total net asset value (NAV) of Schedule Funds nationwide.
The report highlights improvement in audit quality where the number of enforcement cases over the inspected engagements for the year had significantly reduced from 16% in 2023 to 8% in 2024. This positive outcome reflects the continuous efforts of audit firms and individual auditors to enhance audit quality.
Additionally, the report features insights into Audit Quality Indicators (AQIs) of its registered audit firms, which include compiled statistics used by the AOB to assess audit firms’ performances.
These indicators show that both Major and Other Audit Firms are actively addressing challenges such as resource adequacy and high staff turnover, with efforts aimed at improving workforce stability and operational capacity.
The AOB encourages firms to build on these initiatives by ensuring consistent audit quality across all engagements, to address the deficiencies and findings included in the Annual Inspection Report.
Improvement in firms’ quality management systems, specifically the monitoring and implementation of internal quality controls, is critical in supporting audit quality.
In addition, the Annual Inspection Report highlighted AOB’s efforts in strengthening the monitoring and supervision of auditors such as Keeping a Watch on Auditor Resignations and Effectiveness of Firm’s Remediation.
The AOB remains committed in its ongoing efforts to strengthen audit capacity and capability, audit quality and governance of its registered firms.
The AOB’s Annual Inspection Report 2024 is vailable at https://www.sc.com.my/aob/about-audit-oversight-board/aobs-annual-inspection-report
