Auditors need to be more vigilant and transparent
FocusM | 01 Feb 2019 00:30
The spotlight is back on the role of independent auditors. This time, it is not only on auditors of listed companies but also those of unlisted private companies.
On Jan 30, the Securities Commission (SC) issued a rare reprimand and fine of RM2.2 mil on Deloitte PLT for four counts of breaches related to the RM2.4 bil Sukuk Murabahah issued by Bandar Malaysia Sdn Bhd (BMSB) in 2014. Deloitte was the auditor for BMSB and 1MDB Real Estate Sdn Bhd (1MDB RE, now known as TRX City Sdn Bhd) for the financial years 2015 and 2016. Both BMSB and 1MDB RE are subsidiaries of 1Malaysia Development Bhd (1MDB).
For the record, Deloitte qualified its audit. It also highlighted that “the ongoing investigations into 1MDB indicate the existence of material uncertainty which may cast significant doubt about the group’s and the company’s ability to continue as a going concern”.
However, Deloitte failed to inform the SC about this, thus breaching Section 354(3)(b) of the Capital Markets and Services Act 2007 (CMSA).
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