The Federal Court has unanimously ruled in favour of the Securities Commission Malaysia and dismissed the application for leave to appeal by an audit firm Afrizan Tarmili Khairul Azhar (AFTAAS) and its partners, namely Datuk Mohd Afrizan bin Husain, Haji Tamili bin Dulah Kusni and Khairul Azahar bin Ariffin.
The panel’s decision reflects the seriousness of the breaches and reinforces the robustness of the SC’s Audit Oversight Board’s (AOB) enforcement framework. AFTAAS was also ordered to pay costs of RM30,000 to the SC and its partners were sanctioned for several breaches involving non-compliance with the auditing standards on fundamental and basic audit procedures during the inspection period between 14 February and 5 March 2019. The AOB also found that some of the findings were recurring from the previous inspections of the auditors, raising concerns about their capacity and capability.
The firm and its partners were prohibited from accepting as clients and auditing public interest entities (PIE) or scheduling funds for a period of 12 months. In addition, the AOB also imposed fines of RM455,000 on AFTAAS, and RM88,000 each on Datuk Mohd Afrizan and Khairul respectively.
With the Federal Court decision, the stay on AOB’s enforcement decisions until the disposal of the leave application to the Federal Court obtained by AFTAAS and its partners at the Court of Appeal on 11 February 2022 has lapsed. As such, the sanctions imposed by the AOB in its enforcement decision including the prohibitions shall take effect from 17 August 2022.
