Audit Act Amendments To Incorporate More Current, Dynamic Methodologies - Experts

KUALA LUMPUR, July 28 (Bernama) --  The Audit Act 1957 (Act 62) marked a new era last Wednesday after 33 years of status quo when the Dewan Negara passed amendments to grant the Auditor General broader powers to ensure efficient management of public funds.

These amendments are expected to have a positive impact, particularly by incorporating more current and dynamic auditing methodologies to meet the needs of the digital era.

Institute of Internal Auditors Malaysia (IIA Malaysia) president, Mohd Khaidzir Shahari, stated that the amendments also allow the Auditor General to issue internal audit guidelines to ensure they add value and provide advisory services to the audited parties.

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“The expansion of the Audit Department's powers to conduct follow-up audits aligns with global internal auditing standards. Follow-up audits are essential to verify whether the audited entity has implemented the necessary measures to ensure ongoing internal effectiveness.

"I am confident the expansion of the Audit Department's scope and powers will elevate the department to a more sophisticated level by utilising the latest auditing techniques and methods, including artificial intelligence and data analytics," he told Bernama today.

Mohd Khaidzir elaborated that the amendment now allows the Audit Department to audit companies registered under the Companies Commission of Malaysia (SSM) if they receive any financial support or guarantees from the government.

He emphasised that this authority demonstrates the government’s commitment to ensuring good corporate governance by the boards of directors and management of such companies. 

“This means that the boards and management of these companies must implement more effective corporate governance and oversight. In addition to external audits mandated by the Companies Act they will also be subjected to audits by the Audit Department, including performance audits, compliance audits, and 'follow the public money trail' audits,” he explained.

Meanwhile, the Global Institute of Internal Auditors (IIA Global) governor of Malaysia and member of the Public Relations Committee, Philip Rao, stated that one of IIA's global objectives is to support advocacy for public sector governance and accountability.

“In this context, the amendment to this Act is timely and reflects a positive step forward for Malaysia. IIA Malaysia remains committed to supporting the initiatives of the Auditor General’s Office and other governance bodies in improving transparency and accountability,” he said.

"We believe that this amendment will pave the way for a stronger and more robust governance framework that benefits all Malaysians," he said.

Last Wednesday, the Dewan Negara passed three Bills under the purview of the Prime Minister's Department: the Audit (Amendment) Bill 2024, the Arbitration (Amendment) Bill 2024, and the Construction Industry Payment and Adjudication (Amendment) Bill 2024.

During the winding-up debate on the Audit (Amendment) Bill 2024, Deputy Minister in the Prime Minister's Department (Law and Institutional Reform) M. Kulasegaran said that the bill aims to strengthen the Act with new provisions on par with current needs and the expanded role of the Auditor General.

The Audit Act 1957 was previously amended in 1978 and 1991. The 1978 amendment addressed the need for performance auditing, focusing on economy, efficiency, and effectiveness under Section 6(d), while the 1991 amendment provided the power to amend the Schedule under Section 11 of the Act. 

-- BERNAMA