Kuala Lumpur, 2 June 2014
Audit Oversight Board Prohibits Firm From Accepting PIEs As Client For 12 Months

Audit Oversight Board (AOB) has prohibited Wong Weng Foo & Co from accepting Public Interest Entities (PIEs) as clients for 12 months as the firm failed to comply with Section 31N (1) of the Securities Commission Act 1993 which requires audit firms to be registered with the AOB when acting as auditors of PIE.

In addition, the firm also failed to comply with the Malaysian Institute of Accountants By–Law (On Professional Ethics, Conduct and Practice) which deals with independence. AOB has also imposed a RM30,000 monetary penalty on the firm for the breaches.

“The spirit behind the independence requirement is to avoid familiarity threat between the client and the engagement team which could lead to influences that may compromise professional judgment, objectivity and professional scepticism,” said Nik Mohd Hasyudeen Yusoff, Executive Chairman of the AOB. He elaborated that the overall effectiveness of audit engagements depends on the independence of the engagement team and key audit partner. In view of this, any breach to independence requirement cannot be viewed lightly and necessitates strong action.

“The AOB expects audit firms to adhere strictly to the laws and regulation prescribed by it and will not hesitate to take action against any registered individuals or firms for failure of compliance” said Nik.

The AOB was set up by the Securities Commission Malaysia in 2010, to oversee the auditors of PIEs, protect investors’ interest and promote confidence in the quality and reliability of audited financial statements of PIEs.

As at 31 March 2014, a total of 306 individual auditors and 53 audit firms have registered with the AOB. The AOB has also recognised 15 foreign individual auditors from seven foreign audit firms.