Financial audits now the key priority, to address non-compliance and governance shortfalls, says Auditor General

Tuesday 17 Sep 2024

KUALA LUMPUR (March 7): Financial statement audits of government entities are the core priority for the National Audit Department (NAD) starting this year, to address the issues of non-compliance and internal management shortfalls, said Auditor General Datuk Wan Suraya Wan Mohd Radzi.

“Financial statement audits will become a core and important part of our (NAD) work, especially beginning this year,” Wan Suraya told the audience at the Bank Audit Conference 2024 during her keynote address.

“The rationale for this is to respond to the concern by the government over instances of non-compliance and internal control weaknesses that are repeatedly mentioned in the annual audit reports in the past,” she added.

Wan Suraya said this forms one of NAD’s priorities towards becoming more stakeholder-focused and delivering value in the audit services it provides.

She noted that overall, the NAD conducts over 400 financial audits a year on federal agencies, federal and state statutory bodies, local governments and Islamic religious councils.

Through this, the auditor general said the NAD plays a focal role in the machinations of Malaysia’s parliamentary system in its duty to ensure the management and accounting of public funds are done in an economic, efficient and effective manner.

“Parliament, the government and the public service are guardians of public funds entrusted to them to deliver programmes and services to benefit the public.

“A key element of people’s confidence in our democratic institutions is the belief that public funds are being spent wisely and effectively and by [NAD] helping the parliamentarians to discharge their duties as our representatives and assisting the government in the management of public funds,” she added.

The release of the Auditor General’s Report on Federal Agencies 2022 on Wednesday (March 6) flagged concerns about the financial positions of a couple of federal agencies.

In particular, the report disclosed that the Federal Land Development Authority (Felda) bled heavily in 2022 while having hefty loan repayment commitments, while PR1MA Corp Malaysia is struggling to pay off the RM1.75 billion second tranche of its sukuk maturing in October this year, given its loss-making position in 2022.

Meanwhile, it highlighted that the Armed Forces Fund Board (LTAT) has logged a deficit in its reserves between 2020 and 2022. The fund’s deficit was RM376 million in 2020, RM258 million in 2021, and RM338 million in 2022.

The Bank Audit Conference 2024, hosted by the Asian Institute of Chartered Bankers (AICB) and Chief Internal Auditors Networking Group (CIANG), provides a platform for internal audit professionals to discuss trends shaping the audit and risk management landscape, regulatory developments, and how to further elevate the standards of internal audit practices in Malaysian financial institutions.

The conference will feature over 30 bankers, regulators and internal audit experts shedding light on the notable global trends in the industry, including digital disruption and cybersecurity, the increasing importance of ESG issues in business coordination, and sustainability reporting.

Edited ByKathy Fong

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