SC imposes one-year ban and fine on audit partners

 

The Securities Commission said its Audit Oversight Board took action against Chia Kwong Chow and Tai Yoong Noor after according them due process.

KUALA LUMPUR: The Securities Commission has barred audit partners Chia Kwong Chow and Tai Yoong Noor of the firm KC Chia & Noor from accepting and auditing any public interest entity (PIE) or scheduled funds for 12 months from May 10.

The Audit Oversight Board (AOB) has also imposed fines of RM50,000 on Chia and RM25,000 on Tai, the SC said in a statement today.

It said that Chia, as the engagement partner, had failed to assess the appropriateness of a PIE capitalising a significant amount of consultation fees as deferred expenditure in accordance with the Malaysian Financial Reporting Standards requirements.

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“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 capital market regulator said.

The SC said the deferred expenditure was subsequently reclassified as 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 the MFRS 5 requirements, it said.

The SC said that Tai, as the engagement quality control reviewer, failed to sufficiently review the selected audit documentation relating to significant judgments and significant risk areas of the engagement and the basis of the conclusions reached.

The audit deficiencies, discovered by the AOB, had affected the overall audit quality, it said. “The sanctions were imposed after due process, including the appeal process, accorded to them,” it added. - FMT