YOURSAY ‘Internal auditor focuses on controls, compliance, efficiency and wastage.’

Auditor-general says no reason to audit 1MDB

Baiyuensheng: Being audited by one of the Big Four audit firms does not mean the internal auditor stops auditing. By the same argument, all public companies audited by the Big Four, then need not have internal audits done or have internal audit services.

The objectives of audits done by the Big Four and by internal auditors are different. This type of argument is fine for junior staff but from an experienced person like auditor-general Ambrin Buang, it just makes him appear amateurish and naive.

Telestai!: Ambrin, I'll tell you why you need to audit 1Malaysia Development Bhd (1MDB).

As the government auditor, you are an internal auditor focusing on system of controls, compliance, efficiency and wastage. This role is not undertaken by an external auditor because they focus on true and fair financial reporting.

Yes, they do look at internal controls but only so that they can rely on it when expressing an opinion on the financial statements.

So you see, the scope of work of the internal and external auditors are quite different. When your answer is "because it is audited by the Big Four", you have totally missed the point.

Anonymous #559621903: The Big Four are commercial auditors who may look only at the procedures but not question other matters.

As long as every expense has a voucher, the commercial auditor is satisfied even if the department head buys a car for his personal use using government funds. But the government auditor will go a step further and question the head’s authority to make such purchase.

BeeC: My company was also audited by a Big Four audit firm. So why does the Inland Revenue Board (IRB) still need to tax audit my company?

Mushiro: Chief secretary to the government Ali Hamsa seems to be happy with the horrible performance of the government departments. There is no use trying to confuse the people or talk about improvements or the action taken against only one person.

The bottom line is that tons of money may have been embezzled and assets bought are substandard or cannot perform. I dare Ali Hamsa to benchmark our auditor-general’s reports to Singapore’s, Hong Kong’s or even Indonesia’s.

As auditor-general, Ambrin has done an excellent job through the 2013 Auditor-General’s Report. But his reason for not auditing 1MDB sounds 'political', the kind to please his political master.

I thought the auditor-general reports directly to the Agong or Parliament, so there’s no need to please anyone.

SMC77: Who signed off the 1MDB account? It is dubious as key 1MDB subsidiaries have failed to file their accounts for more than two years. How did he draw enough comfort to sign off the 1MDB account in the first place?

Baiyuensheng: The Big Four, first of all, are LLPs - limited liability partnerships - so of not much use. They have a fiduciary duty not to us, the rakyat, but to the company, i.e. 1MDB, according to the requirement of fair and just opinion on the financial statement.

Particularly for fraud, they rely mostly on management declaration as they are not duty-bound to detect and investigate fraud. More and more companies are relying on internal auditing to play a greater role in detecting fraud - that is, if they have the resources.

I am sure the Auditor-General’s Office with its 'huge' budget can carry out such a task if need be. An internal audit carried out by it can 'see' more things.

Abu_Maryam: 1MDB had been already audited by an international auditor. So, it is enough. If re-audited by Ambrin, Pakatan Rakyat will say it is wasting the rakyat's money.

Jaded: This is a case of stupidity at its highest. Big auditing firms which fail to do the job were the reason for the recent collapse of big financial firms. It seems there is no hope for the government.

Anticonmen: The purpose of an external audit is only to form a true and fair opinion on the financial statements. The Big Four accept letters by third parties as "sufficient and appropriate" audit evidence and even rely on such letters.

Some of these document letters are obtained to claim a certain audit assertion as true, for example, the existence of an asset.

The external auditor does not go beyond such letters to probe their validity or the actual existence of the asset or money. Even if one knows that there is fraud or that the asset is non-existent, very seldom does one point out the irregularity in his audit report for fear of losing the client.

Fair Play: The auditor-general has no business or power to audit the accounts of a company registered under the Malaysian Companies Act 1965.

If the Auditor-General’s Department gets involved, it might imply that either the Securities Commission or the Companies Commission or both, are not performing their duties in accordance with the powers vested them under their respective Acts of Parliament (Securities Commission Act and the Companies Commission Act).

The auditor-general is only empowered to audit government departments, ministries and agencies (statutory bodies formed under an act of Parliament or state enactment) at the federal and state level.

Laughable: There is a difference here. The external auditor had earlier replaced another even more reputable auditor who resigned because they were not able to sign off the accounts without qualifying.

Therefore as the auditor-general, you should have more reason to audit 1MDB's account, given the unusual circumstances leading to the removal of the earlier auditor.

Victor Johan: Ambrin, let us have you announce the name of the 'big international corporation' that had audited 1MDB, shall we?

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