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The Securities Commission Malaysia’s (SC) Audit Oversight Board (AOB) has prohibited McMillan Woods Mea (AF 001995) (the “Firm”) and two of its partners, Mea Fatt Leong (Mea) and Wong Joo Hua (Wong), from accepting clients and auditing any public interest entities or schedule funds for 12 months, effective 14 February 2019.
Additionally, the Firm and Mea were also fined RM123,000 and RM44,000 respectively.
The actions were taken as the Firm and its partners failed to comply with the International Standard on Quality Control and relevant International Standards on Auditing when auditing the financial statements of a public listed company for the financial year ended 31 December 2016. The AOB took action against Mea in his capacity as the Engagement Partner and Wong in his capacity as the Engagement Quality Control Reviewer for the audit of the public listed company. The AOB noted numerous instances of non-compliances with the auditing standards which included non-performance of fundamental audit procedures which affected certain key audit areas. The AOB also noted that training was not provided to audit staff on recent changes to auditing standards and that outdated audit work programs were used for audit engagements.
The Firm and Mea appealed to the SC against the period of prohibition and quantum of monetary penalty imposed by the AOB. The SC dismissed the appeal and affirmed the AOB’s decision.
Compliance with auditing standards when auditing the financial statements of a public interest entity is a condition of registration for AOB registrants. Failure to comply with the AOB’s conditions of registration will result in a breach of section 31Z of the Securities Commission Malaysia Act 1993.
