Kuala Lumpur, 10 October 2011

Court of Appeal upholds High Court decision on AOB matter

The Court of Appeal, on 6 October 2011, ruled in favour of the Securities Commission Malaysia (SC) on the Audit Oversight Board’s (AOB) registration of PricewaterhouseCoopers (PwC) on 1 April 2010.

In May 2011, the High Court had dismissed an application by Ramesh Chelliah for leave to commence judicial review proceedings against the AOB’s registration of PwC under the Securities Commission Act 1993. In delivering her decision, Justice Dato’ Rohana Binti Yusuf agreed that there were flaws in the application and that the applicant did not have the locus standi to commence judicial review proceedings. The High Court also ordered the applicant to pay costs to the Attorney General’s Office and the SC.

The Court of Appeal, presided by YA Dato’ Nihrumala Segara A/L M.K. Pillay, YA Dato’ Alizatul Khair Binti Osman Khairuddin and YA Datuk Wira Mohtarudin Bin Baki , upheld the decision of the High Court and dismissed the applicant’s appeal with costs.

The AOB was established in 2010 to protect investor interests and promote confidence in the quality and reliability of audited financial statements of Public Interest Entities (PIEs) which include public listed companies, licensed intermediaries, institutions licensed under the Banking and Financial Institutions Act 1989 and insurance companies under the Insurance Act 1996.

Now in its second year of operation, the AOB has, from January to September 2011, inspected 14 audit firms auditing 52% of the number of PIEs, which represents 65% of the PLCs, based on market capitalisation. The AOB continues to inspect audit firms and to monitor the progress of remediation measures identified.