Audit firm, partners suspended a year over non-compliance

PETALING JAYA: The Securities Commission’s (SC) Audit Oversight Board (AOB) has suspended audit firm McMillan Woods Mea and its two partners for 12 months for failing to comply with auditing standards when conducting an audit on a public-listed company in 2016.

In a statement today, SC said the partners of the firm Mea Fatt Leong and Wong Joo Hua were also barred from accepting clients and auditing public interest entities for 12 months from Feb 12.

The firm and Mea were fined RM123,000 and RM44,000 respectively.

The action was taken as the firm and its partners failed to comply with the International Standard on Quality Control and relevant International Standards on Auditing when auditing the financial statements of a public-listed company for the financial year ended on Dec 31, 2016.

Mea was involved in the audit of the public-listed company as the engagement partner while Wong was the engagement quality control reviewer.

The board noted numerous instances of non-compliances with the auditing standards including non-performance of fundamental audit procedures which affected certain key audit areas.

The AOB also noted that training was not provided to audit staff on recent changes to auditing standards, and that outdated audit work programmes were used for audit engagements.

“The firm and Mea appealed to the SC against the period of prohibition and quantum of monetary penalty imposed by the AOB. The SC dismissed the appeal and affirmed the AOB’s decision,” said the statement.

Compliance with auditing standards when auditing the financial statements of a public-interest entity is a condition of registration for AOB registrants. - FMT