Audit Oversight - Annual Report 2024 | Securities Commission Malaysia

Audit Oversight Board Annual Report 2024

Fostering high quality independent auditing to promote confidence in the quality and reliability of audited financial statements of public-interestentities and schedule funds in Malaysia.

CHAIRMAN’S MESSAGE

To achieve a sustainable culture of quality in the financial reporting ecosystem, key stakeholders must play their
respective roles effectively.
Over the years, we have engaged and collaborated with Audit Committees, academician,
investors, preparers of financial statements to strengthen the financial reporting ecosystem.

Highlights

KEY HIGHLIGHTS OF THE AUDIT OVERSIGHT BOARD’S CORE FUNCTIONS IN 2024

When coffee meets muffins.

Annual Report 2021

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When coffee meets muffins.

Highlights 2021

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REGISTRATION

REINFORCING REGULATORY EXPECTATIONS

Issued the revised AOB’s Handbooks for Registration and Recognition
Issued AOB Alerts to Audit Committees (ACs) on audit quality related matters to assist the ACs with their oversight responsibilities on auditors
Registered and recognised 29 new individual auditors, 1 new foreign audit firm and 3 new foreign individual auditors t Strengthened the financial reporting ecosystem through the AOB’ Conversation series with Auditors and ACs
Built capacity and capabilities of AOB-registered auditors by facilitating targeted training programmes

INSPECTION

STRENGTHENING THE FOCUS ON RISK-BASED INSPECTIONS

Inspected 13 audit firms, 40 partners and 40 audit engagements

ENFORCEMENT

FOCUSED AND IMPACTFUL ENFORCEMENT OUTCOMES

Setting the tone for quality through enforcement actions – 2 audit firms and 4 individual audit partners were reprimanded, prohibited from accepting as clients and auditing the financial statements of PIEs and schedule funds and a total of RM275,000 monetary penalty imposed

RM905.5

billion

RM519.5

billion

RM4.8

billion

RM39.3

billion

345

Registered individual auditors

Recognised individual auditors

Registered and recognised audit firms

Audited

1,203

PIEs

RM1,718

billion market capitalisation

Audited

1,203

schedule funds

RM716

billion NAV

Profile of the AOB’s Registered and Recognised Audit Firms and Individual Auditors as at
31 December 2024

377

Registered
individual auditors

Registered
audit firms

Recognised individual auditors

Recognised audit firms

Audited

1,304

PIEs

RM2,017

BILLION

Public-listed companies (PLCs)
market capitalisation

Audited

1,380

SCHEDULE FUNDS

RM750

BILLION

Net Asset Value (NAV)

Monitoring and Supervision of PIEs and Schedule Fund Auditors

The AOB’s oversight activities include the registration and recognition of auditors of
public-interest entities (PIEs) and schedule funds

In 2024, the AOB processed 29 applications for the registration of individual auditors of which one application was refused due to failure to meet the registration criteria imposed under Section 31P of the Securities Commission Malaysia Act 1993.

During the year, 26 individual auditors withdrew their registration with the AOB as they were no longer involved in the audits of PIEs and schedule funds

Stakeholder Engagement and Capacity-Building Initiatives

Engagement and Conversation on Audit Quality

The AOB places emphasis on regular and targeted engagements with key stakeholders, which includes auditors, financial
statements’ preparer, audit committees and fellow regulators. These engagements are beneficial to ensure stakeholders’
needs and concerns are translated into the AOB’s focus areas.

Statements

Statements from members of the Audit Oversight Board and financial statements for the financial year ended 31 December 2024

The Board of the AOB comprises a Non-Executive Chairman, an Executive Officer, and five other Non-Executive
Members who are appointed by the SC. The Non-Executive Members are representatives from the regulators, namely
BNM and SSM, the legal profession, accounting profession and the private sector. The Executive Officer is responsible
for the day-to-day administration of the AOB.

The Non-Executive Chairman of the AOB is appointed for a term not exceeding three years and the Non-Executive
Members of the Board are appointed for a term not exceeding two years. Both the Non-Executive Chairman and Non-
Executive Members are eligible for reappointment upon the completion of their term.

Others

Acronyms and Abbreviations.

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