Apex court rules in SC's favour in enforcement action against audit firm

KUALA LUMPUR: The Federal Court has unanimously ruled in favour of the Securities Commission Malaysia (SC) and dismissed an application for leave to appeal by audit firm Afrizan Tarmili Khairul Azhar (AFTAAS) and its partners, namely Datuk Mohd Afrizan Husain, Tamili Dulah Kusni and Khairul Azahar Ariffin.

A Federal Court panel comprising Tan Sri Azahar Mohamed, Datuk Seri Hasnah Mohammed Hashim and Datuk Abu Bakar Jais delivered the decision on Aug 17, 2022.

The Federal Court decision reflects the seriousness of the breaches and reinforces the robustness of the SC’s Audit Oversight Board’s (AOB) enforcement framework, the SC said in a statement.

AFTAAS was also ordered to pay costs of RM30,000 to the SC.

"AFTAAS and its partners were sanctioned by the AOB for several breaches involving non-compliance with the auditing standards on fundamental and basic audit procedures during the inspection period between Feb 14 and March 5, 2019,” the statement said.

It said the AOB also found that some of the findings were recurring from the AOB’s previous inspection on the auditors, raising concerns on their capacity and capability.

The firm and its partners were prohibited from accepting clients and auditing public interest entities (PIE) or schedule funds for a period of 12 months.

In addition, the AOB also imposed fines of RM455,000 on AFTAAS, and RM88,000 each on Mohd Afrizan and Khairul, respectively.

With the Federal Court decision, the stay on the AOB’s enforcement decisions until the disposal of the leave application to the Federal Court obtained by AFTAAS and its partners at the Court of Appeal on Feb 11, 2022, has lapsed.

As such, the sanctions imposed by the AOB in its enforcement decision including the prohibitions shall take effect from Aug 17, 2022. - Bernama