KUALA LUMPUR: The Securities Commission's audit oversight board (AOB) has prohibited audit partners Chia Kwong Chow and Tai Yoong Noor of KC Chia & Noor from accepting and auditing any public interest entities (PIE) or schedule funds for 12 months from May 10, 2023.
The regulator also imposed fines of RM50,000 on Chia and RM25,000 on Tai.
In a statement, the SC said Chia, as the engagement partner, 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.
It said he 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.
Following the reclassification of the deferred expenditure to non-current assets held for sale, 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.
Meanwhile, the SC said Tai, as the engagement quality control reviewer, 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, had affected the overall audit quality," said the SC.
it added that the sanctions were imposed after the due process, including the appeal process, accorded to them.
