SC’s AOB Emphasise the Need for High Quality Audit in light of Covid-19
7 April 2020   |   Kuala Lumpur

The Securities Commission Malaysia (SC)’s Audit Oversight Board (AOB) today issued a circular to auditors and audit committees regarding the importance of ensuring high quality of audit on financial reports of Public Interest Entities (PIEs) in light of the challenges posed by the Covid-19 pandemic.

In a circular to auditors and audit committees, the AOB, which regulates auditors of PIEs, said today that they are closely monitoring the impact of the pandemic on the quality of financial reports of PIEs.

“We are cognisant of the difficulties faced by auditors who may need to conduct remote auditing and have limited access to clients’ books and records. Audit engagements could take a longer time, leading to delays in meeting reporting or regulatory deadlines,” said Datuk Syed Zaid Albar, Chairman of the SC.

To ease the challenges faced by the firms, the AOB have announced that the audit regulator will only commence inspection of audit firms of PIEs after 15 May 2020. Firms that are required to submit any remedial action plan to the AOB will be given an extended deadline till 30 June 2020.

The AOB has also extended payment of registration fees to 1 July 2020. The implementation of Audit Transparency Report of large registered audit firms of the AOB shall be deferred to 2021.

“We are aware that audit firms and PIEs’ immediate concern is to ensure the continuity of their business operations and ability to withstand market and industry volatility. Nevertheless, the SC’s AOB is of the view that the current situation should not undermine the delivery of high quality audits. Those charged with governance, in particular Audit Committees, should be extra vigilant and cautious to ensure reliable, audited financial information is provided to investors and shareholders for informed decision making,” Syed Zaid added.

Auditors and Audit Committees, as well as those charged with governance, should work closely together during this period to uphold audit quality and enable audits to be performed in compliance with established standards.

“PIEs need to understand that it is imperative for auditors to be given sufficient time to carry out their work, which may, in some cases, require companies to adjust their reporting deadlines” said Dato’ Gumuri Hussain, Non-Executive Chairman of the AOB.

The AOB is responsible for the registration of auditors of PIEs or schedule funds defined in Schedule 1 of the Securities Commission Malaysia Act 1993. There are currently 40 audit firms and 330 auditors registered with the AOB, to audit the financial reports of PIEs.

The AOB is constantly in contact with its stakeholders and will continue to monitor the situation carefully. The detailed circular can be viewed at the link here https://www.sc.com.my/regulation/technical-notes-practice-notes-and-circulars/aob-communications-to-auditors-and-audit-committee. Those who have any queries may also email [email protected]
SECURITIES COMMISSION MALAYSIA 
AUDIT OVERSIGHT BOARD
SC-World Bank-IOSCO Asia Pacific Hub Conference 2019: Enhancing Financial Inclusion through Islamic Finance and FinTech
(From left to right):
  1. Abayomi A. Alawode, Head of Islamic Finance, Finance, Competitiveness and Innovation, The World Bank Group
  2. Datuk Syed Zaid Albar, Chairman of the Securities Commission Malaysia (SC)
  3. Dr. Firas Raad, Country Manager for Malaysia, East Asia and Pacific, The World Bank Group 
  4. Datuk Zainal Izlan Zainal Abidin, Deputy Chief Executive of SC
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