KUALA LUMPUR, Aug 23 — Accounting firms Deloitte and KPMG are under investigation by the Malaysian Institute of Accountants (MIA) over their respective audits of 1MDB that are now suspect.
According to The Star, the investigations are on whether the firms had breached the Accountants Act when they signed off the state investment firm’s accounts from the period 2009 to 2014.
“There are complaints lodged against KPMG and Deloitte and we are investigating the auditors in question. The complaints are on the auditors and it’s ongoing,” MIA chief executive officer Nurmazilah Mahzan was quoted as saying.
She did not provide a timeframe for the probes.
MIA executive director for surveillance and enforcement Datuk Muhammad Redzuan Abdullah said the investigations were at disciplinary committee level and started in mid-2016.
Now wound down, 1MDB had changed auditors with unusual regularity, going from Parker Randall to Ernst & Young, before opting for KPMG and Deloitte later.
Ernst & Young resigned without signing off the accounts in 2010 while KPMG closed 1MDB’s books for 2010, 2011 and 2012 without any qualifications.
KPMG has now sought to disavow these audited accounts, after the Auditor-General’s previously classified audit of 1MDB was released to the public by the government.
Deloitte took over in 2013 but could not “conclude” its 2013 accounts.
Deloitte also issued a similar statement saying that its audit report issued on March 28, 2014 and November 5, 2014 for the financial years ending 2013 and 2014 should no longer be relied upon.
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