Audit Oversight - Annual Report 2021 | Securities Commission Malaysia

Audit Oversight Board Annual Report 2021

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

CHAIRMAN’S MESSAGE

I am pleased to report on the Securities Commission Malaysia’s Audit Oversight
Board’s efforts and activities for 2021.

introduction

The Audit Oversight Board (AOB) was established under Part IIIA of the Securities Commission Malaysia Act 1993 (SCMA) to regulate auditors of PIEs and schedule funds for and on behalf of the SC. The AOB also exercises oversight over any person who prepares a report relating to financial information of PIEs and schedule funds in relation to capital market activities.

The AOB remains focused on its mandate to foster high-quality independent auditing in the capital market. While the AOB continues with its core functions, namely registration and recognition, inspection, and enforcement, it is mindful of the challenges faced by the audit industry. Drivers such as global economic uncertainties and technological disruptions are regularly monitored to ensure that the AOB’s focus is current and relevant.

THE AOB’S CORE FUNCTIONS

When coffee meets muffins.

Annual Report 2021

Lorem ipsum dolor sit amet, consectetur adipiscing elit praesent. vehicula leo diam, et dapibus urna molestie sodales.

When coffee meets muffins.

Highlights 2021

Lorem ipsum dolor sit amet, consectetur adipiscing elit praesent. vehicula leo diam, et dapibus urna molestie sodales.

Registration

The AOB is responsible for the registration of auditors of PIEs and schedule funds. It also recognises foreign auditors who audit the financial statements of foreign corporation listed on Bursa Malaysia.

Inspection

The AOB conducts inspection and monitoring programmes on auditors to assess the auditors’ degree of compliance with auditing and ethical standards applicable in Malaysia.

Enforcement

The AOB initiates enforcement proceedings and imposes appropriate sanctions for non-compliance with auditing/ ethical standards, regulation and securities laws.

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 2021

345

Registered individual auditors

Recognised individual auditors

Registered and recognised audit firms

Audited

1,203

PIEs

RM1,718

billion

public-listed companies (PLCs)
market capitalisation

Audited

1,255

schedule funds

RM717

billion

net asset value (NAV)

Monitoring and Supervision of PIE and Schedule Fund Auditors

The 2021 key highlights from the AOB’s core function are addressed in the following sections.

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.

Stakeholder Engagement and Capacity-Building Initiatives

The responsibility for performing quality audits of financial statements rests with auditors. However, the AOB believes that regular engagements with its various stakeholders and leadership of the audit firms will have a positive effect on enhancing audit quality. Audit quality is achieved in a situation where there is support from, and communication among key stakeholders in the financial reporting ecosystem.

In 2021, the AOB became a member of the International Forum of Independent Audit Regulators’ (IFIAR) Investor and Other Stakeholders Working Group (IOSWG). The IOSWG includes IFIAR Members from Austria, Canada, France, Italy, Japan, Korea, The Netherlands, South Africa, United Kingdom (UK) and United States (US). The objective of the IOSWG is to enhance investor protection and improve audit quality based on suggestions both by investors who are the ultimate beneficiaries of the audit and other stakeholders with interest in audit-related matters. The AOB continued with its stakeholder engagements and capacity-building initiatives for its registrants in 2021.

The AOB continued with its stakeholder engagements and capacity-building initiatives for its registrants in 2021.

Statements

Statements from members of the Audit Oversight Board and financial statements for the financial year ended 31 December 2021.

The Board of the AOB comprises a Non-Executive Chairman, an Executive Officer, and 5 other Non-Executive Members who are appointed by the SC. The Non-Executive Members are representatives from the regulators, namely Bank Negara Malaysia (BNM) and Companies Commission of Malaysia (SSM), the legal profession, auditing 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 of 3 years and the Non-Executive Members of the Board are appointed for a term of 2 years. Both the Non-Executive Chairman and Non-Executive Members are eligible for reappointment upon the completion of their term.

Others

Acronyms and Abbreviations.

Download the Report

click here