The Securities Commission Malaysia’s Audit Oversight Board has barred audit partners Chia Kwong Chow and Tai Yoong Noor of K. C. Chia & Noor, from accepting and auditing any public interest entities or scheduled funds for 12 months effective 10 May 2023.
In addition, the AOB has also imposed fines of RM50,000 on Chia and RM25,000 on Tai. The board said as the engagement partner, Chia has failed to assess the appropriateness of the PIE capitalising a significant amount of consultation fees as deferred expenditure in accordance with Malaysian Financial Reporting Standards (MFRS) 138 requirements. Chia also failed to obtain sufficient appropriate audit evidence to verify a significant number of transactions with incomplete records of deferred expenditure. In addition, no alternative audit procedures were performed to verify these incomplete records.
The deferred expenditure was subsequently reclassified as Non-Current Assets Held for Sale. It said Chia again failed to assess the appropriateness of the PIE classifying the deferred expenditure as Non-Current Assets Held for Sale in accordance with MFRS 5 requirements. Tai, the Engagement Quality Control Reviewer, has failed to sufficiently review the selected audit documentation relating to significant judgements and significant risk areas of the engagement and basis of the conclusions reached.
The audit deficiencies, which the AOB had discovered, said had affected the overall audit quality. The sanctions were imposed after the due process, including the appeal process, accorded to them.
