Types of Actions Imposed
Directive to comply
Public reprimand
Remedy the breach according to directive of AOB
Undertake relevant professional education
Assign reviewer to oversee audit
Prohibitions from auditing and accepting PIEs and schedule funds as audit clients
Monetary penalties
Section 31Z of the SCMA
Revoke, withdraw or suspend the registration or recognition of auditors
Section 31Q of the SCMA
In imposing the above actions, the AOB applies the principle of proportionality in determining the appropriate enforcement sanction(s). To ensure that the sanctions imposed serve as an effective deterrence, the AOB takes into account the following considerations:
The AOB's Enforcement Actions Considerations
FIGURE 5: ENFORCEMENT ACTIONS TAKEN IN 2021
1
Revocation of Registration
2
Prohibitions +
Monetary Penalties
1
Monetary Penalty
1
Reprimand
TABLE 3: NUMBER OF OUTSTANDING CASES AS AT 31 DECEMBER 2021
TABLE 4: NUMBER OF CASES COMPLETED SINCE 2017
Year
No. of referrals for enforcement proceedings
No. of cases completed prior to 2021
No. of cases completed in 2021
No. of outstanding cases as at 31 December 2021
2017
1
1
-
-
2018
8
8
-
-
2019
4
4
-
-
2020
5
1
3
1
2021
1
-
-
1
TOTAL
19
14
3
2
Auditing standards stress the importance of audit evidence, where the auditor is required to prepare, on a timely basis, work papers that support the audit work performed and the conclusions reached.
However, in many instances, the AOB observed that the audit procedures and the audit evidence in the audit file are either non-existent, incomplete, or inadequate. Figure 6 depicts the observations with respect to enforcement in 2021.
FIGURE 6: THE AOB’S OBSERVATIONS OF 2021 ENFORCEMENT ACTIONS
In 2021, the SC was involved in three ongoing judicial reviews against the enforcement actions imposed by the AOB. These judicial reviews involved challenges to the AOB’s powers in enforcing its rules and regulations and the manner in which the AOB conducted its enforcement proceedings. In all the judicial review applications, the SC obtained favourable results, which further reinforced the robustness of the AOB’s enforcement framework and its processes.
JUDICIAL REVIEW APPLICATIONS AGAINST THE AOB’S ENFORCEMENT DECISIONS AS AT 31 DECEMBER 2021
Judicial Review
Brief description
Outcomes
Between Afrizan Tarmili Khairul Azhar (AFTAAS) and three of its partners and the SC
Challenges against the AOB’s powers and the manner in which the AOB conducts its enforcement proceedings.
Between RSL PLT and two of its partners and the SC
Challenges against the AOB’s powers and the manner in which the AOB conducts its enforcement proceedings.
Between Andrew Heng and the SC
Challenges against the AOB’s powers and the manner in which the AOB conducts its enforcement proceedings.