THE Securities Commission Malaysia’s (SC) Audit Oversight Board (AOB) has barred audit partners Chia Kwong Chow and Tai Yoong Noor of KC Chia & Noor from accepting and auditing any public interest entities (PIEs) or schedule funds for 12 months effective May 10, 2023. 

The board has also imposed a fine 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 (MFRS) 138 requirements.

“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.

Meanwhile, 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 the due process, including the appeal process, accorded to them,” it added. – Bernama, June 16, 2023.