Inspection of Audit Firms and Individual Auditors

The AOB conducts inspections on auditors of PIEs and schedule funds to promote confidence in the quality and reliability of the audited financial statements in accordance with Section 31V(1) of Part IIIA of the SCMA.

Annual inspections are conducted on the Major Audit Firms* while the Other Audit Firms are inspected at least once in five years, based on risk consideration. As at 31 December 2024, the public listed companies audited by the Major Audit Firms constitute approximately 96% of the market capitalisation of the stock exchange.

DIAGRAM 2
Firm and engagement level reviews

Firm level
Assess firms’ compliance with the requirements of the International Standards on Quality Management (ISQM) 1

Engagement level

Assess auditors’ compliance with the International Standards on Auditing (ISAs) and relevant ethical standards; and
Assess whether sufficient and appropriate audit evidence had been obtained in relation to the audit reports of PIEs or schedule funds.

In 2024, the AOB inspected nine Major Audit Firms and four Other Audit Firms including a total 40 audit engagements. As shown in Diagram 3, the audit engagements that have been inspected in 2024 involve audit clients with businesses spanning across various industries.

Note:
* The Major Audit Firms are firms that have more than 10 partners who collectively audit more than 50 PIEs with a total market capitalisation exceeding RM15.0 billion.
The Major Audit Firms comprises of Baker Tilly Monteiro Heng PLT, BDO PLT, Crowe Malaysia PLT, Deloitte PLT, Ernst & Young PLT, Grant Thornton Malaysia PLT, KPMG PLT,
PriceWaterhouseCoopers PLT and UHY Malaysia PLT. The Other Audit Firms are firms other than the Major Audit Firms.