Ex-auditor-general’s defence of Tabung Haji audit questioned
Yesterday
Ameer Fakhri
Senior accountant Khalid Ahmad says the inquiry had already reviewed the national audit department’s report before rejecting its clean opinion
Khalid Ahmad says former auditor-general Madinah Mohamad’s claim that her department found no evidence of theft when auditing Tabung Haji in 2017 did not address the RCI’s central criticisms.
PETALING JAYA: Former auditor-general Madinah Mohamad’s claim that the royal commission of inquiry into Tabung Haji might have reached a different conclusion had she been called to testify has raised questions over whether key information was omitted from the pilgrim fund’s 2017 audit report.
Khalid Ahmad, a former Association of Chartered Certified Accountants Malaysia advisory committee president, told FMT an audit report is supposed to reflect the auditor’s complete opinion and concerns.
“What is she admitting to? Is she admitting that she kept certain things (to herself) that she never put in the report? That she kept it a secret?” he asked.
“Once an auditor issues the report, that is final. There are no more unwritten or unexpressed opinions, worries or concerns as far as the auditor is concerned.”
Khalid Ahmad, a former Association of Chartered Certified Accountants Malaysia advisory committee president, told FMT an audit report is supposed to reflect the auditor’s complete opinion and concerns.
“What is she admitting to? Is she admitting that she kept certain things (to herself) that she never put in the report? That she kept it a secret?” he asked.
“Once an auditor issues the report, that is final. There are no more unwritten or unexpressed opinions, worries or concerns as far as the auditor is concerned.”
Khalid Ahmad.
He said Madinah had fulfilled her duty by making herself available to the RCI, and that it was up to the commissioners to decide whether they needed her testimony.
“She cannot blame the RCI here. They accept her report as it is. How would they know if she had actually kept something more than whatever is in the report?” he said.
Khalid was commenting after Madinah came out in defence of the national audit department’s 2017 audit of TH following the release of the RCI report.
Madinah had insisted that the department was right to issue a clean audit opinion with two “emphasis of matter” (EOM) paragraphs, stressing that the decision was based on audit evidence and international auditing standards.
She explained that EOMs are inserted to draw attention to significant issues in the accounts without altering the overall audit opinion.
Madinah also said issuing a qualified opinion without meeting the required standards could undermine the audit process and have major implications for stakeholders’ confidence.
However, the RCI criticised the department for taking depositor confidence into account when deciding on the contents of the opinion, saying such matters were outside the scope of an audit.
The RCI concluded that TH should not have been issued with a clean audit certificate for 2017.
Madinah also said she had made herself available to testify before the RCI but was not called to give evidence. She claimed the RCI would have come to different findings had she testified.
Khalid questioned what additional information Madinah could have provided, stressing that an auditor’s duty is to present all concerns within the report itself.
“You can’t keep a whole thing secret for almost 10 years and then say, ‘I expected to be called. Had they called me, I would have told this.’ For 10 years? To me, it’s very odd,” he said.
He added that Madinah’s statement — that the audit found no evidence of theft — did not address the RCI’s central criticisms, which focused instead on accounting treatment, asset impairment, governance failures, and the payment of hibah despite TH’s financial position.
“Audit reports never use the word ‘sakau’. There are better words for it – malfeasance, misappropriation, breach of trust and collusion.
“The RCI findings centred on accounting treatment, impairment and governance failures. That was the major contention,” he said.
The RCI found that TH reported a RM3.4 billion profit in 2017 when it should have recorded a RM1.4 billion net loss had the relevant financial reporting standards been fully applied.
The commission said the issues highlighted as EOMs should instead have been treated as serious non-compliance.
It said without the clean audit certificate, TH should not have declared hibah totalling RM2.75 billion for that year.
He said Madinah had fulfilled her duty by making herself available to the RCI, and that it was up to the commissioners to decide whether they needed her testimony.
“She cannot blame the RCI here. They accept her report as it is. How would they know if she had actually kept something more than whatever is in the report?” he said.
Khalid was commenting after Madinah came out in defence of the national audit department’s 2017 audit of TH following the release of the RCI report.
Madinah had insisted that the department was right to issue a clean audit opinion with two “emphasis of matter” (EOM) paragraphs, stressing that the decision was based on audit evidence and international auditing standards.
She explained that EOMs are inserted to draw attention to significant issues in the accounts without altering the overall audit opinion.
Madinah also said issuing a qualified opinion without meeting the required standards could undermine the audit process and have major implications for stakeholders’ confidence.
However, the RCI criticised the department for taking depositor confidence into account when deciding on the contents of the opinion, saying such matters were outside the scope of an audit.
The RCI concluded that TH should not have been issued with a clean audit certificate for 2017.
Madinah also said she had made herself available to testify before the RCI but was not called to give evidence. She claimed the RCI would have come to different findings had she testified.
Khalid questioned what additional information Madinah could have provided, stressing that an auditor’s duty is to present all concerns within the report itself.
“You can’t keep a whole thing secret for almost 10 years and then say, ‘I expected to be called. Had they called me, I would have told this.’ For 10 years? To me, it’s very odd,” he said.
He added that Madinah’s statement — that the audit found no evidence of theft — did not address the RCI’s central criticisms, which focused instead on accounting treatment, asset impairment, governance failures, and the payment of hibah despite TH’s financial position.
“Audit reports never use the word ‘sakau’. There are better words for it – malfeasance, misappropriation, breach of trust and collusion.
“The RCI findings centred on accounting treatment, impairment and governance failures. That was the major contention,” he said.
The RCI found that TH reported a RM3.4 billion profit in 2017 when it should have recorded a RM1.4 billion net loss had the relevant financial reporting standards been fully applied.
The commission said the issues highlighted as EOMs should instead have been treated as serious non-compliance.
It said without the clean audit certificate, TH should not have declared hibah totalling RM2.75 billion for that year.
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