THE Securities Commission Malaysia’s (SC) Audit Oversight Board (AOB) has prohibited audit partners Chia Kwong Chow and Tai Yoong Noor of K.C. Chia & Noor from accepting and auditing any public interest entities (PIEs) or schedule funds for 12 months effective May 10 this year.
In addition, the AOB has also imposed fines of RM50,000 on Chia and RM25,000 on Tai.
As the engagement partner, Chia has failed to assess the appropriateness of the PIE capitalising a significant amount of consultation fees as deferred expenditure in accordance with Malaysian Financial Reporting Standards (MFRS) 138 requirements.
“Chia also failed to obtain sufficient appropriate audit evidence to verify a significant number of transactions with incomplete records of deferred expenditure,” the AOB pointed out in a media statement.
“In addition, no alternative audit procedures were performed to verify these incomplete records.”
The deferred expenditure was subsequently re-classified as non-current assets held for sale. Chia again failed to assess the appropriateness of the PIE classifying the deferred expenditure as non-current assets held for sale in accordance with MFRS 5 requirements.
Meanwhile, Tai as the engagement quality control reviewer has failed to sufficiently review the selected audit documentation relating to significant judgements and significant risk areas of the engagement and basis of the conclusions reached.
“The audit deficiencies which the AOB had discovered had affected the overall audit quality. The sanctions were imposed after the due process, including the appeal process, accorded to them,” added the AOB. – June 16, 2023