KUALA LUMPUR: Securities Commission Malaysia’s (SC) Audit Oversight Board (AOB) has prohibited Ong and Wong Chartered Accountants and three of its audit partners from accepting and auditing any public interest entities (PIEs) or schedule funds for a 12-month period, starting from Sept 7.
The audit partners are Ong Koon Liang, Ong Kong Lai and Wong Cham Mew.
Additionally, the AOB imposed fines of RM227,000 on Ong and Wong, RM35,000 each on Koon Liang and Kong Lai and RM34,000 on Cham Mew, Bernama reported.
“Based on the AOB’s inquiry findings, Ong and Wong and the three audit partners were found to have failed to comply with the relevant International Standards on Auditing and International Standard of Quality Control 1 when auditing two PIE clients,” the commission said in a statement yesterday.
SC said the AOB found numerous audit deficiencies in the engagement reviews of the two PIE clients, led by Koon Liang and Kong Lai, as the engagement partners.
These deficiencies, among others, relate to the sufficiency and appropriateness of the audit evidence obtained and the completeness of audit documentation to support the conclusions reached, it said.
Additionally, in the audit of PIE 2 where the subsidiaries operate in a foreign country, the AOB noted issues concerning the reliability of documents and the audit team’s control over the trade receivables confirmation where requests were made and received through the management of PIE 2 in contravention of the relevant ISA,
“Cham Mew, the engagement quality control reviewer (EQCR) for both the PIEs, failed to sufficiently review the selected audit documentation relating to significant judgements and risk areas of the engagement as well as the basis of the conclusions reached.
“This affected the overall audit quality as evidenced by the multiple audit deficiencies discovered in the two audits performed,” it said.
As for the breaches by Ong and Wong, SC said the auditor had failed to comply with the relevant requirements of ISQC 1.
In particular, the firm had failed to ensure that its quality control monitoring system operated effectively, resulting in its failure to detect the audit deficiencies found in the audits of the two PIE clients, it said.
In addition, the audit deficiencies found in the audit of PIE 2 raised concerns about the audit firm’s understanding and knowledge in performing audit(s) in a foreign country and in meeting the relevant audit requirements in the foreign country, it said.
“The AOB would like to stress that auditors must be familiar with and adhere to the laws, regulations and reporting requirements of foreign jurisdictions when performing audits of an entity outside Malaysia.
“The AOB also reiterates the crucial role of EQCR in safeguarding the integrity of audit quality and control process.