Securities Commission Malaysia’s Audit Oversight Board published its 2025 Annual Inspection Report, finding that the proportion of audit engagements requiring significant improvement fell to 27% from 46% in 2024. Recurring deficiencies remained in accounting estimates, sampling, internal control testing and revenue recognition. The board inspected 14 audit firms, 40 individual auditors and 41 audit engagements during 2025. Its culture assessment of 4,092 respondents across nine Major Audit Firms found strong ethical behavior, consultation, compliance and professional challenge, but identified workload, staffing, remuneration and talent retention challenges. Several Major Audit Firms have begun using artificial intelligence tools for document analysis, compliance assessments and audit documentation. The board called for effective technology risk management and governance as firms expand their digital capabilities, alongside stronger governance, culture, monitoring and remediation processes.
Malaysia Securities Commission2026-08-06
Securities Commission Malaysia’s Audit Oversight Board reports decline in audit engagements needing significant improvement to 27%
Securities Commission Malaysia’s Audit Oversight Board found that audit engagements requiring significant improvement declined to 27% in 2025 from 46% in 2024, although recurring deficiencies remain. It urged firms to address workforce pressures and strengthen governance over artificial intelligence and other technology.