Rights Duties Liabilities of Auditors in Malaysia PDF

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Statutory Requirement for Appointment of Auditors

Tenure and Appointment

S.172(1) and (2): Every company must appoint an auditor at its AGM, to hold office from the conclusion of that meeting until the conclusion of the next AGM.

Management Advisory Services Managing Perception

Factors to Safeguard Independence

New company, may appoint first auditor before the first AGM. S.172(10): if an auditor is not appointed or reappointed at the AGM, any member of the company may make an application to the registrar for the appointment of an auditor.

Auditor Rotation In US, 5-year rotation cycle

Self-interest threat Self-review threat

Regulatory requirement Primary statutory source of authority: Companies Act 1965 (latest Companies Act 2016) Duties, functions, liabilities and responsibilities of auditors are further defined by MIA

Threats to Independence

Familiarity Intimidation Advocacy

Rights, Duties & Liabilities of Auditors in Malaysia

In cases of disqualification, removal or resignation of auditors, the directors may appoint a new auditor provided the auditor is qualified and has not been previously disqualified from acting as an auditor.

Statutory Requirement for Removal and Resignation

S.172(4): The company may remove auditor from office at any time b passing a special resolution. Public company; must give 14 days notice of removal to RoC. Private company; may not be required.

S.172(14) and (15): Auditors can resign from their post before the ex their term, but must give notice of their intention to resign. Such notice only effective if it complies with the prescribed require of form.

Statutory Rights of Auditor

Integrity to be straightforward, honest, fair dealings, truthfulness does not associate with report that contains misleading statement, does not omit required information

Principles under MIA By-Laws Objectivity

Professional Behavior

not to compromise their professional/business judgement because of bias, conflict of interest, undue influence

to comply to relevant laws and regulations avoid any action that may discredit the profession Advertising, Marketing and Promotions material are professionally dignified and in accordance with legislations does not make exaggerated claims about their services, qualifications, experiences

Professional Competence and Due Care maintain professional knowledge and skill to ensure client receive competent professional service act diligently in accordance with technical & professional standards

Confidentiality refrain from: disclosing outside the firm use acquired information without authority use confidential information for personal advantage unless: disclosure is authorized disclosure required by law professional duty or right to disclose

1. Right upon removal Representations in AGM Attendance at AGM 2. Right to remuneration 3. Right to Access Information...