Page 13 - AOB 2018 (ENG)

Audit
Oversight
Board
ANNUAL
REPORT
2018

REINFORCING REGULATORY EXPECTATIONS

The AOB continues to reinforce regulatory expectations through its three key functions – registration and
recognition, inspection as well as enforcement. In 2018, this was achieved through the following key efforts:

Gatekeeping Monitoring Collaboration

• Strengthened existing • Strengthened ongoing • Joint research by the AOB,
registration pre-assessment monitoring efforts, where Malaysian Institute of
and recognition processes, non-compliances with Accountants (MIA) and
reinforcing the regulatory auditing standards and Association of Chartered
expectations on the audit regulations identified were Certified Accountants (ACCA)
firms’ system of quality control routed for enforcement or on the Enhanced Auditors’ Report
at point of registration and other appropriate action. (EAR): A Review of First-Year
recognition for Malaysian and Implementation Experience in
foreign audit firms respectively. • Mitigated the risk of Malaysia, contained insights into
future failure arising auditors’ communication with
• Introduced New Criteria for from serious audit quality audit committees and investors’
Registration with the AOB, concerns identified during perceptions and behaviour.
following its in-depth review of inspections and through
existing registration criteria and ongoing monitoring • AOB Dialogue with
its engagement with the audit efforts, where auditors’ Professional Bodies, concerns
profession. current and past performance were shared following inspections.
in and outside of Malaysia The AOB also facilitated
were considered. Actions discussions and brainstorming
taken included additional with the audit profession on the
conditions imposed on best way forward to improve
registered auditors and audit quality in Malaysia.
revocations of auditors’
registrations. • Annual AOB Conversation with
Auditors of PIEs and Schedule
Funds, where greater insights
were shared from the inaugural
In 2018, the AOB’s monitoring function identified instances where 2017 AOB Annual Inspection
AOB-registered auditors exceeded the maximum period allowed Report and the announcement of
to act as a key audit partner of a PLC audit client. the New Criteria for Registration
with the AOB.
These breaches of the By-Laws (On Professional Ethics, Conduct
and Practice) of the Malaysian Institute of Accountants (MIA By-
laws) compromised the auditor’s independence when conducting
the audits.

The AOB views such ethical breaches seriously, and
enforcement proceedings were initiated against the
individual auditor as well as the audit firm.

PART ONE FOSTERING HIGH QUALITY INDEPENDENT AUDITING IN THE CAPITAL MARKET | 11

T_2018 AOB AR PART 1.indd 11 10/04/2019 5:03 PM