PA 503 : FUNDAMENTAL OF AUDITINGPN JULIANA BT MOHD ARIFFIN

NUR AZWEEN SYAFIRA BT ABDUL NASIR 10DAT11F2025NOR AMALIA BT AHAD 10DAT11F2027NORMASTURA BT AHMAD 10DAT11F2039SITI NABILAH BT ABDULLAH 10DAT11F2042NUR SYUHADA BT RUSLAN 10DAT11F2048

LECTURER’S NAME :

STUDENT’S NAME :

2.0 : PROFESIONAL AUDITING PRACTICE2.1.1 : OVERALL AUDIT PROCESS

2.1.2 ROLE OF AUDITING AND ACCOUNTING

STANDARDS IN AUDITING PROCESS

AUDITING STANDARDS

The Accounting and Auditing Committee (AAC) of MIA is responsible for issuing pronouncements on auditing matters.

MIA are called Malaysian Approved Standards on Auditing (MASA).

Main functions are the issuance of guidelines on the interpretation of auditing standards and reviewing making recommendations and submissions on corporate law methods affecting financial reporting and related matters.

ACCOUNTING STANDARDS

The responsibility of the Malaysian Accounting Standards Board (MASB) established under Financial Reporting Act 1997. Institute participates actively in the MASB’s standards setting process.

MIA also educates its members on the application of the MASB standards.

2.1.3 GENERAL TERMS USED IN AUDITING PROCESS

TRUE AND FAIR VIEW

The financial statements are not misleading.

The financial statements do not contain any material misstatements.

The financial statements are prepared on the basis of established criteria.

2.2 : LEARN THE PROFESSION AS AN AUDITOR

QUALIFICATIONS

(PART 1) ACCOUNTA

NT ACT 1967

(PART 2) ACCOUNTA

NT ACT 1967

DIPLOMA IN ACCOUNTING ADVANCED DIPLOMA IN ACCOUNTING BACHELOR OF ACCOUNTING

WAS A MEMBER OF ASSOCIATION OF ACCOUNTANT :MALAYSIAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANT (MICPA)MALAYSIAN INSTITUTE OF ACCOUNTANS (MIA) OR PRACTISING CERTIFICATE FROM MIA

WORK EXPERIENCE IN AUDIT FIRM :3 YEARS AFTER APPLYING BECOME A MEMBER MUST ATTENDING PUBLIC PRACTICE PROGRAMME BY MIA

2.2.2 : APPOINTMENT, REMOVAL & RESIGNATION OF AUDITOR

APPOINTMENT

SECTION 172(2) CA 1965 :

1. EVERY PUBLIC COMPANY SHOULD APPOINT INDEPENDENT AUDITORS

2. APPOINTMENT WILL BE MADE AT THE ANNUAL GENERAL MEETING OF THE FOLLOWING

3. DIRECTOR OF VACANCIES TO FILL ANY TEMPORARY POSITION FOR AUDITORS

4. FOR THE NEW COMPANY, DIRECTOR CAN APPOINTED THE AUDITOR IN FIRST AGM

REMOVAL & RESIGNATIO

N

SECTION 172(3) CA 1965 : AUDITOR POSITION CAN BE TERMINATED IN CASE OF DEATH, RESIGNATION OR DISMISSAL

SECTION 172(14) : AUDITORS CAN PLACING HIS JOB IF NOT A SINGLE COMPANY AUDITOR

SECTION 172(15) : AUDITOR POSITION CAN BE PLACING WITH PROVIDE WRITTEN NOTICE IN CERTAIN SITUATION

SECTION 172(7) : WHEN AN AUDITOR BEING REMOVED, THEN THE COMPANY MAY APPOINT OTHER AUDITORS IMMEDIATELY

IF A COMPANY IS NOT APPOINT OTHER AUDITORSTHEN THE REGISTRAR OF COMPANIES WILL APPOINT AN AUDITOR AND HOLD THAT POSITION UNTIL THE END OF NEXT AGM

2.2.3 : DUTY, RIGHT AND RESPOSIBILITY OF AUDITORS

DUTY BEWAR

E OF DUTIES

DUTIES TO

THIRD PARTIES

DUTIES TO

DETECT FRAUD

RIGHT

AUDITORS AUTHORIZED TO

CHECK THE RECORD COMPANY

AUDITORS ARE FREE FROM ANY ORAL OR

WRITTEN STATEMENT

AUDITORS ARE NOT ALLOWED TO LOMIT

THE SCOPE

RESPONSIBILITY

VERIFY THE ACCURACY

OF COMPANY

ACCOUNTS

REPORT TO THE MEMBERS OF THE COMPANY

ACCOUNTS SUBMITTED

DURING AGM

GIVE OPINIONS TO OBTAIN

INFORMATION

PRESENT THE

AUDITORS REPORT TO

THE DIRECTOR

DISCLOSURE OF FINANCIAL

FRAUD COMPANY IN ACCOUNT IF THE ANNUAL

SHAREHOLDERS TO ERRORS

2.3 : UNDERSTAND THE AUDIT PROFESSION AND REGULATORY IN MALAYSIA

2.3.1 : PROFESSIONAL BODIES INVOLVED IN AUDIT PROFESSION

Profession

bodies

Ministry Of Finance

Member of MIA

Professionally Quality

Auditors must

understanding the

principle & rules.

Member of MICPA

MINISTRY OF FINANCE

All audit company established have got confirmation from Ministry Of Finance to audit all of incorporation under

section 8 Company Act 1965.

MEMBER OF M.I.A

All audit firm should have registration as a Member Of MIA body of a profession to the field of accounts and

auditing.

PROFESSIONALLY QUALITY

Audit company that is recognized as a qualified professional body.

AUDITORS MUST UNDERSTANDING THE PRINCIPLE & RULES

Audit company must know and understand the concepts and principles of accounting and auditing.

•to advance the theory and practice of accountancy in all its aspects;

•to recruit, educate, train and assess by means of examination or otherwise a body of members skilled in these areas;

•to preserve at all times the professional independence of accountants in whatever capacities they may be;

•to maintain high standards of practice and professional conduct by all its members and

•to do all such things as may advance the profession of accountancy in relation to public practice, industry, commerce, education and the public service.

MICPA

2.3.2 GENERAL AUDIT PROFESSION IN MALAYSIA

1. DELOITTE - The Big Four auditing firms is Deloitte Touche Tomatsu Limited,

commonly known as Deloitte - The second largest professional services network in the work - Deloitte provides audit, tax, consulting, enterprise risk and

financial advisory services

2, ERNST & YOUNG - The fourth accounting firm to make the Big Four is Ernst & Young

was founded in the 19th century. - Provides assurance, advisory, tax and transaction advisory

services

3. PRICE WATER HOUSE COOPERS ( PwC ) - Is the world’s largest audit and accountancy firm and

one of the Big Four auditors - Provide assurance, tax and advisory services

4. KPMG SDN BHD AWARDS : - Global 100 - Private Equity Advisory Firm of the Year - Malaysia - ICT Organisation of the Year - PIKOM ICT Leadership Awards (PILA) 2013 - DealMakers' Global Award - Private Equity Advisory Firm of the Year - Malaysia- Finance Monthly Global Awards 2013 - Financial Advisory Firm of the Year - Malaysia- GRADUAN Brand Awards 2012 – Preferred Employer in Business and Preferred Employer in Accounting - M&A International Global Awards Private Equity Advisory Firm of the Year – Malaysia 

2.3.3 REGALUTORY AND STANDARDS USED IN AUDIT PROFESSION IN MALAYSIA

REGULATORY STANDARDS

CENTRAL BANK (BNM)

Established on 26 January 1959 under the central bank og malaysia Ordinance , 1958

Main objective : - Issue currency & maintain reserve in order to safeguard the value of currency - Act as a banker & financial adviser to the government - Promote monetary stability & a sound financial structure - Influence the credit situation to the advantage of the country

Function : - Carried out within the context of the broader goals of promoting economic growth, a high level of employment, maintaining price stability & reasonable balance in the country’s international payment position, endocarting proverty & restructuring society

responsibility to answering that the availability & cost of money & credit in the economy are consonant with national macroeconomic objectives

SECURITIES COMMISION

Act 1993 – set up the securities commision Function: - to promote a strong and healthy securities market and to maintain the confidence of investors in line with provisions of the Securities Commission Act and the Securities Act 1983

Function include : - Supervising exchanges, clearing house and central depositories - Registering authority for prospectuses of corporations other than unlisted recreational clubs - Approving authority for for corporate bond issues - Regulating all matters relating to securities and futures contracts, unit trust schemes, mergers and acquisition of companies - Lincesing and supervising all lincesed persons - Encouraging self- regulation - Ensuring proper conduct of market institiutions and licensed persons

The securities commision played a significant role in the establishement of the Financial Reporting Act1997 and continues to be involved in the Malaysia Accounting Standards Board ( MASB )

COMPANIES COMMISSION OF MALAYSIA SEC 169 (4) CA 1965 : Every company incorporated under the

act to have its profit & loss account and balance sheet duly audited before

they are presented at the AGM

SEC 9 ; That audit must be performed by an approved company auditor

as define under section 8

SEC 174 (2) : The power & duties of the auditor under cmpany’s account

Set up to amalgomate the activities of the former register of Company & Register of Business

Main function To ensure that the provisions of the act & law specified below are administered, enforred, carried out & complied with : - Companies Act 1965 - Trust Companies Act 1949 - Kootu Funds ( Probihition ) Act 1971 - Registration of Business Act 1956 - Any Subsidiary legislation made under the act specified above

Function include among other : - Enhancement & promotion of the supply of business & corporate information - Acting as agent of the government & providing services in collecting & enforcing payment of prescribed fees - Regulations & promoting proper conduct amongst directors, secretaries & other officers of a corporation Companies Commisionof Malaysia played active role in accounting profession

AUDITING STANDARDS

AUDITING STANDARDS

- Standards are needed to enhance the quality of audit performed by the auditor.

- Standards are “ Measure of an acceptable level of quality of professional work performed by auditors.

- Guidelines for an auditor is performing an audit of financial statements.

- Auditor in Malaysia should follow the standards the professional qualities issued in the By-Laws ( on Professional Ethics, Conduct and Practice )