KUALA LUMPUR: The Securities Commission Malaysia's (SC) Audit Oversight Board (AOB) has imposed fines of RM150,000 and RM37,500 on an audit firm and an audit partner for failing to comply with key audit partner rotation requirements.
The firms are Grant Thornton Malaysia PLT (GTM) and its audit partner Mohamad Heizrin Sukiman, respectively.
According to the SC, Heizrin violated a crucial provision of the Malaysian Institute of Accountants (MIA) By-Laws (On Professional Ethics, Conduct and Practice) during the transition phase of the updated MIA By-Laws.
"Heizrin was an engagement partner and engagement quality reviewer on the audit of a PIE from 2013 to 2017, after which he was required to serve a minimum cooling off period of three consecutive years."
"But he failed to do so and as a result was involved in the audit of the PIE for more than seven years," it added.
According to the commission, GTM did not fulfil the quality standards set by the International Standards of Quality Management (ISQM) 1, as adopted by the MIA.
It said particularly in terms of failing to adhere to relevant ethical requirements, including those related to independence as outlined in the MIA By-Laws.
The MIA By-Laws require that an audit engagement partner must not participate in an audit engagement for more than seven consecutive years to maintain audit independence.
"The AOB views the breach seriously as auditors' independence and compliance with ethical standards are fundamental requirements for the audit profession."
"GTM and Heizrin had appealed to the SC against the AOB's enforcement action. The SC heard the appeal and after due process, affirmed the AOB's decision," the SC said.