Audit firm, auditors fined and prohibited from auditing by Malaysian oversight board

KUALA LUMPUR, Aug 19 — The Securities Commission Malaysia’s (SC) Audit Oversight Board (AOB) has fined and prohibited Chengco PLT and its partners from accepting public interest entities (PIEs) or schedule funds as clients and auditing their financial statements for 12 months.

In a statement today, the SC said the firm and its partners concerned were found to have multiple instances of noncompliance with international auditing standards, which were discovered in two inspections conducted by the AOB in 2016 and 2018 respectively.

The AOB also noted the firm had failed to remedy a recurring finding identified in the first inspection. As a result, the firm and the partners, Hong Thuan Boon and Liew Kwai Choy, were prohibited from accepting PIEs or schedule funds as clients and auditing their financial statements for 12 months, it said.

The firm was fined RM175,000 while Hong was fined RM57,000.

The SC said Hong and Liew were engagement partner and engagement quality control reviewer respectively for the audit.

“Another of the firm’s partners, Yap Peng Boon (Yap), was also fined RM44,000 for non-compliance with audit procedures. The firm, Hong, Liew and Yap appealed to the SC against the AOB’s decisions, however, the SC dismissed the appeal and affirmed the AOB’s actions,” it said.

The prohibitions on the firm, Hong and Liew took effect from Aug 6, 2019.

The AOB is established under the Securities Commission Act 1993 which came into force on April 1, 2010 to promote and develop an effective audit oversight framework and to promote confidence in the quality and reliability of audited financial statements in Malaysia. — Bernama

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