The Malaysian Institute of Accountants (MIA) has finally announced that they will refer former 1MDB auditor Deloitte to its disciplinary committee. This was after a report was made by MP Damansara, Tony Pua, three and a half years ago about Deloitte.
A recap – Deloitte was the auditors for 1MDB and had signed off the 2013 and 2014 financial statements of 1MDB. Deloitte endorsed 1MDB report on Nov 5, 2014, after which 1MDB immediately failed to repay a RM2 billion loan at the end of November 2014.
Deloitte’s country managing partner Tan Theng Hooi, and audit partner Ng Yee Hong, had also testified before the Public Accounts Committee and stood by their report and verified that that the fair value of the investments at that time, amounting to RM13.4 billion, was there.
KPMG is also under investigation by MIA. A report was made in March 2015. After the Pakatan Harapan government came into power and released the AG’s report, KPMG issued a statement to imform 1MDB to disregard the audited accounts for the financial years ended March 31, 2010 (FY2010), FY2011 and FY2012 that it had signed off. I urge MIA to give us an update on their investigation.
Had Deloitte and KPMG professionally executed their roles, not fearing a corrupt government and red-flagged 1MDB accounts then, the colossal amount of stolen 1MDB money could be reduced.
MIA, as the professional body, can only take disciplinary action. Actions that can be taken are imposing a fine on the auditor, suspending its membership with MIA or ending its membership. Any punishment for Deloitte and KPMG by MIA if needed, it must fit the audit fees the two firms billed 1MDB.
I urge MIA to take the most drastic action if any of the rules were violated, by recommending that the Ministry of Finance revoke the auditor’s licence. It has been reported widely in the global news that 1MDB is the world’s biggest financial scam. Let the punishment be equal with the offence!