Say No To Hudud

Monday, August 8, 2011

Gatekeepers, influencers and the Auditors.

These professionals the so-called gatekeepers include company secretaries, internal and external auditors, corporate advisers, lawyers, rating agencies and valuers.

The influencers are the analysts, financial journalists, watchdog groups and other corporate governance advocates. The Blueprint points out that this group does not have explicit nexus with companies or their boards, but they have an important role in promoting corporate governance through their ability to influence public opinion and to highlight poor governance practices. Step up, Gatekeepers and Influencers - Errol Oh (The Star 6th August 2011)

Mr Errol Oh, helping things get back on track.
The Audit Oversight Board is a gatekeeper. And its job is to ensure that only auditors who are vetted and truly qualified for the job in terms of conduct are allowed to audit Public Interest Entities. It's parent, the Securities Commission is also a gatekeeper, with the power to take to task any auditor that falls short of acceptable standards of ethics and practise.

But can these two closely linked bodies alone be enough to safeguard the interests of the public, whose monies are tied up in the PIE's, via one government investment arm or another?

As we have seen with the case of PwC Malaysia, auditors can exert a degree of influence on the very gatekeepers who are supposed to scrutinise them, to the extent that standards are not met, and ethics is just a random word with little meaning.

Mr Errol Oh's contention that the gatekeepers and influencers have to step up is timely. The global economic turmoil is still chugging along, and our country can scarcely afford another accounting scandal of major proportions when market players are as jittery as they are. Even if that was not the case, don't we have to achieve some semblance of a standard in Corporate Governance and Audit practices on our way to becoming a developed economy.

We have seen how the citizens of this country are demanding a greater say in matters which they have traditionally not been too concerned about. If private citizens, whether rightly or wrongly, can make the choice to make their voice heard, then what are the various parties who are supposed to be the gatekeepers and influencers, as the SC terms them doing about Corporate Governance standards?

As Mr Errol Oh sums it up, "More to the point, these measures won't work if the gatekeepers and influencers don't buy into the idea that they have a part to play in enhancing corporate governance in Malaysia. If they refuse to accept this, they have no business being gatekeepers and influencers in the first place."

If the gatekeepers and influencers continue to shirk their duties, then it will be just a matter of time before they are replaced by independent watchdogs, who will be as brutal in their handling of these gatekeepers and influencers, as they can be of recalcitrant auditors.

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