The Malaysia Securities Commission (SC) dismissed Chengco PLT’s appeal and affirmed the Audit Oversight Board (AOB) decision to suspend the audit firm’s registration for two years due to serious audit quality issues identified in audits of three public interest entities. Alongside the firm-level action, the AOB sanctioned five Chengco PLT audit partners who acted as engagement partners and engagement quality control reviewers. Two partners, Hong Thuan Boon and Yap Peng Boon, were suspended for two years, while Tan Wae Leng, Kong Tung Sam and Ng Kee Siang were prohibited for one year from accepting as clients and auditing any public interest entities or schedule funds. The AOB found multiple breaches of the International Standards on Auditing as adopted by the Malaysian Institute of Accountants, including failures to obtain sufficient audit evidence in key areas such as bank borrowings, opening balances and prior year adjustments, going concern, other payables and accruals, revenue, cost of sales, redeemable convertible preference shares and goodwill, with recurring deficiencies also noted in property development costs and fixed deposits. Engagement quality control review was also found to be inadequate, particularly for documentation relating to significant judgements and risk areas, and some deficiencies were recurring from past inspections, following prior sanctions in 2019. The two-year suspension of Chengco PLT took effect from 12 June 2025. The partner suspensions and prohibitions took effect from 30 April 2025, and the affected partners did not appeal.
Malaysia Securities Commission 2025-06-12
Malaysia Securities Commission upholds Audit Oversight Board’s two-year suspension of Chengco PLT for serious audit quality breaches
The Malaysia Securities Commission upheld the Audit Oversight Board's decision to suspend Chengco PLT's registration for two years due to serious audit quality issues. Five audit partners were sanctioned, with two suspended for two years and three prohibited for one year from auditing public interest entities. The sanctions were based on multiple breaches of International Standards on Auditing, including inadequate audit evidence and engagement quality control.