Monitoring and Supervision of PIE and Schedule Fund Auditors

As of 31 December 2021, there were 41 audit firms registered and recognised by the AOB, which audited 1,203 PIEs and 1,255 schedule funds. There were four foreign audit firms and 12 foreign individual auditors recognised by the AOB.

In 2021, the AOB conducted inspections on 14 audit firms covering 45 individual auditors for 54 audit engagements. The AOB adopted a risk-based inspection approach in its planning and engagement selection process and specific key areas in the selected audit engagements. To further strengthen its monitoring process, the AOB conducted off-site monitoring reviews by analysing auditors’ reports and disclosures made within Annual Reports and Audited Financial Statements of the respective PIEs, focusing on the financial position of the PIEs and various significant risk indicators.

In 2021, the AOB took five enforcement actions. The AOB revoked the registration of an audit partner and imposed a monetary penalty of RM400,000 on an audit firm for failing to comply with the relevant ethical standards relating to the auditors’ independence. The audit firm is also prohibited from accepting and auditing any PIE or schedule fund for a period of 12 months. In addition, the AOB also imposed a monetary penalty of RM150,000 and RM50,000 on the same audit firm and its audit partner respectively for breaching the relevant requirements of the International Standards on Auditing (ISA). A prohibition for a period of 12 months was also imposed on the audit firm.

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