MP asks MIA about its probe of 1MDB’s auditor Deloitte

KUALA LUMPUR (Nov 22): Member of Parliament for Kepong Lim Lip Eng has asked the Malaysian Institute of Accountants (MIA) on the status of its investigation of Deloitte Malaysia over the latter’s handling of the audit of 1Malaysia Development Bhd (1MDB).

Speaking to reporters in Parliament where he had earlier posed a question to the Ministry of Finance on the role of Deloitte in the 1MDB scandal, Lim said the top executives of Deloitte had defended the company’s work when they testified before the Public Accounts Committee (PAC) in 2015.

“We all know now that these defences were false. We call upon MIA to take action,” said Lim yesterday.

Deloitte had in July 2016 resigned as 1MDB’s auditor, and had in the same month announced that audit reports it issued in connection with the 2013 and 2014 financial statements of 1MDB should no longer be relied upon. Deloitte’s move to distance itself from 1MDB came after a civil forfeiture complaint filed by the US Department of Justice on July 20 the same year.

Deloitte said the complaint contains information, which, if known at the time of the 2013 and 2014 audits of 1MDB, would have impacted the financial statements and affected the audit reports.

“I think that is not enough, it is a matter of professionalism,” Lim said.

Deloitte took over the auditing of 1MDB accounts from KPMG, which had decided to issue a qualified audit report for 1MDB’s 2013 financial statements.

KPMG was replaced in December 2013, before issuing its audit report.

KPMG was reportedly dismissed after a difference of opinion on the fair value of 1MDB’s investment in Bridge Global SPC through Brazen Sky Ltd.

Deloitte verified the accounts for the 2013 and 2014 financial years, with an unqualified opinion without any qualification or emphasis of matter.

This article first appeared in The Edge Financial Daily, on Nov 22, 2018.

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