Because of the scandalous nature of the registration of PricewaterhouseCoopers in Malaysia under the Malaysian Audit Oversight Board (AOB), to hope for a fair and impartial inspection of PricewaterhouseCoopers Malaysia is perhaps too much to ask of the AOB.
Rule 4012, under Section 4 of the Rules of the Board, states the rules under which the PCAOB may conduct an inspection of PricewaterhouseCoopers Malaysia.
Rule 4011 states, " STATEMENT BY FOREIGN REGISTERED PUBLIC ACCOUNTING FIRMS
A foreign registered public accounting firm that seeks to have the Board rely, to the extent deemed appropriate by the Board, on a non-U.S. inspection when the Board conducts an inspection of such firm pursuant to Rule 4000 shall submit a written statement signed by an authorized partner or officer of the firm to the Board certifying that the firm seeks such reliance for all Board inspections."
To what extent can the PCAOB rely on the inspection, or lack off, of PricewaterhouseCoopers Malaysia by the Audit Oversight Board, when these questions on Corporate Governance remain unanswered?
How will the PCAOB decide on this question under Rule 4012: (a) (1) information concerning the level of the non-U.S. system's independence and rigor, including the adequacy and integrity of the system, the independence of the system's operation from the auditing profession, the nature of the system's source of funding, the transparency of the system, and the system's historical performance;
(2) the independence of the system from the auditing profession, including
(ii) whether the person or persons governing the system -
(A) have been appointed, or otherwise selected, by the government of the non-U.S. jurisdiction, without the approval of, or consultation with, any person affiliated or otherwise connected with a public accounting firm or an association of such persons or firms;
(iii) whether a majority of the individuals with whom the system's decision-making authority resides do not hold licenses or certifications authorizing them to engage in the business of auditing or accounting and did not hold such licenses or certificates for at least the last five years immediately before assuming their position within the system;
If the PCAOB conducts an inspection of PricewaterhouseCoopers Malaysia, how will they find the answers to the first three of the eight functional areas in the review of the Firm's practices, policies and procedures?
(1) tone at the top;
We are still waiting for at least a peep from the top on the allegations against them, so the tone will be one of deafening silence perhaps? And if the PCAOB decides to ask Mr Paul Boorman, the Global Leader for Operations, some questions, will the silence then become unbearable?
|Paul Boorman, Global Leader Operations for PricewaterhouseCoopers.|
(2) practices for partner evaluation, compensation, admission, and
assignment of responsibilities, and disciplinary actions;
Can the PCAOB find the appointment of Sham Directors, in a sham company, by the Senior Partners of PricewaterhouseCoopers Malaysia, as sound?
(3) independence implications of
non-audit services; business ventures, alliances, and arrangements; personal financial
interests; and commissions and contingent fees;
Can the PCAOB find the continued existence of PricewaterhouseCoopers Consulting Sdn Bhd (464379-U), to hide contingent liabilities and defraud its creditors, and the appointment of tainted auditors to audit its books, by the Chin Kwai Fatt and Company, and the fact that PricewaterhouseCoopers LLP in the USA, owners of the brand name PricewaterhouseCoopers, have known about this since 2003, and yet chose to remain quiet as nothing to be concerned about?
Can the PCAOB let all these and more go unchecked?