IN a filing to Bursa Malaysia yesterday, Fintec Global Bhd said it has received a notice in writing dated Dec 21 from PKF Malaysia with the auditor’s term of office to end 21 days after that date.
What Fintec encountered illustrates a rising trend of external auditors resigning due to “resources constraint” in recent times.
On Dec 16, three other public listed companies, namely DGB Asia Bhd, INIX Technologies Holdings Bhd and SMTrack Bhd had also received notice in writing from Jamal, Amin & Partners (JAP) on their resignation as auditors of the companies.
In DGB’s announcement, it was stated that JAP’s resignation was due to “manpower issues”, while SMTrack and INIX’s filing with Bursa Malaysia stated that “the resignation is on a voluntary basis” without both companies specifying the reasons.
Perhaps, minority shareholders should use their uncanny ability to read between the lines when it comes to the resignations of external auditors at mid-tenure for often than not, there’s more to this than meets the eye.
After all, amid the raging COVID-19 pandemic this year, it can be assumed that many people (including external auditors) are without jobs and will be readily available to fill up any job vacancy, thus resolving any issue relating to “human resources constraint”.
Below are some reactions from the Minority Shareholder Watch Group CEO Devanesan Evanson:
“Shareholders appoint the external auditors to report to them on the ‘true and fair’ view of the annual audited financial statements. Thus, they play an important role in the corporate governance ecosystem.
Apart from being members of the Malaysian Institute of Accountants, external auditors who audit public interest entities (which includes PLCs) are required to be registered with the Audit Oversight Board (AOB) under the purview of the Securities Commission.
Maybe, the Audit Oversight Board should take cognisance of external auditors who resign citing “resources constraint” as obviously, these auditors have an issue with having adequate resources to perform their external audit function.
Minority shareholders view such announcement with apprehension and suspicion if “resources constraint” is cited only for isolated cases and not by other external auditors, ie it is not an industry-wide issue.
Given that “resources constraint” has been cited as a reason for the external auditor’s resignation by logical extension, “resources constraint” should be an industry-wide issue for external auditors.
As such, we should brace ourselves for more such resignations … both by PKF Malaysia and other external auditors.” – Dec 23, 2020
