KUALA LUMPUR (Oct 28): The partners of Baker Tilly Monteiro Heng PLT (Baker Tilly Malaysia), which lost its appeal to overturn the Securities Commission's (SC) Audit Oversight Board's (AOB) decision to reprimand partner Andrew Heng, are considering escalating the matter to the Federal Court.

In a statement on Thursday, the firm's partners said they were “deeply disappointed” with the AOB's decision, because it was made without taking into account that the auditing standards accord an auditor the right to exercise professional judgement, as well as allowing Heng an oral hearing, which is in breach of the rules of natural justice and constitutes a denial of his right to be heard.

“Baker Tilly Malaysia believes that it has exercised the highest/requisite degree of care and skill in the discharge of its duties in relation to the audit of the said PLC company.

“As a dynamic firm that is constantly evolving and innovating, Baker Tilly Malaysia reaffirms its commitment towards the highest standards of audit and compliance with the prevailing auditing standards,” it added.

Earlier, the Court of Appeal on Thursday ruled in favour of the SC and dismissed Heng’s appeal against the High Court’s decision dismissing his judicial review application, Bernama reported.

A statement issued by the SC on Thursday said the court also awarded costs of RM15,000 to the commission, said the report.

On Aug 2, 2019, the SC's Audit Oversight Board (AOB) reprimanded Heng for failing to comply with relevant International Standards on Auditing.

According to the report, as the engagement partner for the audit of a public interest entity (PIE), AOB found that Heng had failed to perform sufficient audit procedures and obtain sufficient audit evidence to support the conclusions reached on the existence of cash and bank balances, and bank overdrafts as at Dec 31, 2014.

The report added that for the financial year ended Dec 31, 2014, the PIE adopted an early cut-off date of Dec 20, 2014 for its recording of bank transactions.

“Heng had subsequently filed an appeal to the SC to review AOB's decision. The SC dismissed the appeal and affirmed the AOB’s actions on Nov 12, 2019,” it said, quoting the report.

On the same date citing the report, it said Heng filed an application for a judicial review to inter alia, setting aside both the AOB and SC’s decisions, but the High Court on Aug 25, 2020 ruled in favour of the SC and dismissed Heng’s judicial review application with a cost of RM10,000 to be paid to the SC.

Heng subsequently appealed to the Court of Appeal, and the publication of this reprimand, which was subject to a stay of execution by the High Court, has been uplifted following the decision of the Court of Appeal, it added according to the report.