KUALA LUMPUR (Aug 13): Former auditor general Tan Sri Dr Madinah Mohamad has defended her decision in 2017 to issue Lembaga Tabung Haji’s financial statements a clean audit certificate with two emphasis of matter (EOM) paragraphs, rather than a qualified audit opinion, according to Berita Harian.
She was the auditor general from 2017 until 2019.
Madinah said the EOMs, issued in July 2017, were intended to draw attention to two material matters identified during the audit. She said the decision was based on her professional judgement, audit evidence and applicable International Standards on Auditing.
“If we understand the accounting aspect, issuing an EOM means that the financial statements require attention,” she told the Malay daily on Wednesday.
The Royal Commission of Inquiry (RCI) raised concerns over the audit of Tabung Haji’s 2017 accounts, saying they should not have received a clean opinion and that the issues should have been treated as serious non-compliance. Madinah in the report said a qualified opinion was initially proposed over Tabung Haji’s impairment policy and RM227.81 million in investment impairment, but an unqualified opinion with EOM was eventually issued after discussions with then-prime minister Tun Dr Mahathir Mohamad on July 4, 2018, partly due to concerns over the impact on depositors’ confidence. Mahathir became the prime minister on May 10, 2018.
Madinah stressed that the auditor general is required under the Audit Act 1957 to conduct audits independently and professionally in the public interest. She said issuing a qualified opinion without meeting the relevant auditing standards could undermine the integrity of the audit process.
She also said the statutory audit conducted by the National Audit Department (JAN) and the Financial Position Review (FPR) conducted by PwC were different exercises and should not be directly compared.
Madinah said the two exercises differed in their objectives, scope and mandates. The JAN's audit was a statutory exercise carried out under the Audit Act 1957 and applicable auditing standards, whereas PwC's FPR was a special review conducted according to terms of reference established by its appointing party.
She cited the treatment of impairment as an example. The JAN's audit was based on Malaysian Financial Reporting Standards (MFRS) 139, which was applicable at the time, while PwC took into account Reporting Standards Implementation Committee (FRSIC) Consensus 14 , which, according to the Malaysian Institute of Accountants, was not a mandatory accounting standard.
“For that reason, the two assignments cannot be compared directly,” she said in the report.
Madinah also expressed disappointment that she was not called to testify before the RCI into Tabung Haji, despite attending the proceedings at the Department of Islamic Development Malaysia (Jakim) office at the appointed time.
“I had gone there on the appointed day and at the scheduled time at Jakim. I waited for more than 30 minutes, but unfortunately, I was not called.
“My right to be heard was denied when I was not called to the proceedings, even though I had already attended and waited there,” she told Berita Harian.
Read also:
MACC considering foreign forensic experts for probe into Tabung Haji RCI report
Govt prioritises Tabung Haji depositors over political interests, says deputy minister
Tabung Haji RCI report delay: Religious minister questions why Ismail Sabri sat on findings first
Govt never defaults on public debts despite Tabung Haji’s financial woes, says Amir Hamzah
Amir Hamzah: ‘Failure at multiple levels’ wiped out seven Tabung Haji investments, Al-Rawda the biggest loss
Muhyiddin: Bersatu MPs stayed for Tabung Haji RCI debate to represent 10 million depositors
Umno MPs turn tables, push for fresh probe into TH post-2018 restructuring
MPs call for forensic audits, multi-agency task force to probe 14 Tabung Haji investments
Govt to revamp Tabung Haji Act to put investments under SC oversight
Investment in Putrajaya Perdana dragged TH into 1MDB deal, incurring RM145.3 mil loss
BNM issued five warnings on TH's financial standing — Zulkifli
Anwar slams opposition for ‘drama’ during special Parliament sitting on Tabung Haji RCI report
Govt faced RM74.5b liability risk if bank run had occurred in 2018, Parliament told
Govt’s RM10b bailout of Tabung Haji to restore its finances; no assets sold to non-Muslims — minister
PM apologises for absence at special Parliament sitting on Tabung Haji RCI report
Investment in Putrajaya Perdana dragged TH into 1MDB deal, incurring RM145.3 mil loss
Tabung Haji RCI: MPs want transparent probe to uphold justice for people
Syed Saddiq questions whether Tabung Haji truly ‘saved’ after RM11.5 bil sukuk refinancing