Audit Quality Framework in Malaysia

1. Audit Quality Framework in Malaysia Nik Mohd Hasyudeen Yusoff President Malaysian Institute of Accountants

2. The Financial Reporting Chain Board of Directors Audit Committee Management Internal Auditors External Auditors Regulators Shareholders Other users

3. Roles of the Players The Players in the reporting chain General Role Board of Directors Set the tone for corporate governance Audit Committee (All independent) Oversee the implementation of internal control and financial reporting matters Management Implements good internal control and effective financial reporting Internal Auditors Provide reasonable assurance on internal control and risk management External Auditors Provide reasonable assurance on the financial statements Regulators Enforce the laws MIA and professional bodies Educate, set standards and enforce standards

12. The Ethical Framework PRINCIPLES THREATS SAFEGUARDS PROFESSIONAL JUDGEMENT

13. Auditors’ Independence rules Framework of Principles: Identify Threats Evaluate Threats Apply Safeguards Decide on Engagements Self-Review Self-Interest Advocacy Familiarity Intimidation Significant? Assurance team, firm, network firm? Profession or legislation Assurance client Firm’s Internal procedures Eliminate the threats or withdraw from engagement

14. Auditors’ Independence rules Audit Client Client Non-audit Assurance client Type of Assurance Engagement Assurance team, firm and network firm Non-audit, not restricted use Assurance team and firm Non-audit, restricted use Assurance team and firm has no material financial interest Independence requirement:

16. Q&A and Thank You