Fixation With Big 4 Audit Firms A Disservice To Local Auditors

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From FLK
The Malaysian Institute of Corporate Governance (MICG) had on June 25 released a public statement pertaining to the Serba Dinamik saga.
MICG had said: “Whatever choice is made, a reputable audit firm with established international affiliations will be needed to complete the statutory audit for the 2020 financial year.”
Two weeks ago, the Minority Shareholders Watchdog Group (MSWG) was much more specific in its response to a query from a financial daily on the proposed appointment of an independent audit firm by the company.
It stated that it augured well for the company that the second opinion it was seeking was from a firm associated with a Big Four accounting firm.
Why this fixation with the Big 4 accounting firms and now with a reputable audit firm with established international affiliations?
Both the statements from MICG and MSWG have clearly undermined the excellent work done by the Securities Commission (SC).
The SC has, through the Audit Oversight Board (AOB) and the 40+ audit firms registered with it, pursued a dual objective of upholding the quality of financial reporting domestically, while encouraging convergence towards a high-quality global financial reporting framework internationally over the past 10 years.
Not all these 40+ audit firms have international affiliations. But the fact that they are still auditing public-listed entities and not had their registration with AOB revoked speaks for itself.
Financial markets and investors, regardless of their geographical location, depend on high-quality information in order to function effectively.
It appears that these audit firms registered with the AOB, but which lack affiliation with an international network, still command the confidence of the market and the investors.
Reporting requirements may be different in the various jurisdictions but, in this case, it appears that there is no necessity for multiple sets of financial information to be prepared.
If any of these audit firms registered with AOB is unable to meet and deliver transparent, consistent, comparable, relevant and reliable financial information, while maintaining high-quality accounting standards, their registration should have been revoked much earlier.
Quality audits begin with high-quality auditing standards. And the SC and the AOB have done an excellent job in promoting and maintaining high-quality auditing standards among all the audit firms registered with AOB.
This is not done through reputation or affiliation to any international network.
Are MICG and MSWG, in their respective statements, implying that audit requirements are not sufficiently developed to provide the level of enhanced reliability in our country?
FLK is an FMT reader.
The views expressed are those of the writer and do not necessarily reflect those of MMKtT.

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