KUALA LUMPUR: The Securities Commission Malaysia’s (SC) Audit Oversight Board (AOB) has urged audit firms to strengthen their capacity building and improve their quality control to demonstrate the importance of the value of audits and its relevance in ensuring good corporate governance of companies.
In a statement, SC said promoting reliability of audited financial statements, high quality audit practices and addressing inspection findings of audit firms in Malaysia remain a key focus for the regulator.
AOB executive chairman Datuk Gumuri Hussain said AOB is committed to maintaining its focus and positive momentum on key areas and game-changers such as the New and Revised Auditor Reporting Standards (Standards) as a means to drive greater transparency in auditors’ reports as well as financial reporting.
“The Standards will require auditors to disclose Key Audit Matters in their reports, leading to a more informative and tailored reporting specific to the clients’ circumstances instead of the present reporting approach consisting of standard templates or boilerplate reports.
“The AOB has organised engagements with the auditors and stakeholders prior to the adoption of these Standards.
“These include briefings by the UK Financial Reporting Council and International Auditing and Assurance Standards Board experts on insights and practical experience in implementation challenges in the adoption of these standards in Malaysia,” he said.
SC said it will closely monitor the auditors’ compliance in implementing the New and Revised Auditor Reporting Standards through AOB’s inspection programme to identify instances of non-compliance and trends.
Since 2015, the AOB has been gathering data encompassing revenue mix, human resources, training, client portfolio allocation and internal monitoring activities from the top 10 audit firms to benchmark their performance.
In 2016, the AOB inspected five major audit firms and seven other audit firms which collectively audited public-listed companies making up 96 per cent of the market capitalisation of Bursa Malaysia.