Say No To Hudud

Tuesday, August 16, 2011

Gatekeepers, influencers and the Auditors ~ part 2

Our recent expose' on the illegal release of incoming phone records by certain Maxis staff to PwC Malaysia Directors only serves to strengthen the case for a more comprehensive effort, by all the various parties who can influence the standard of Corporate Governance in the country for the good.

Errol Oh calls for the gatekeepers and influencers to buck up....but will they?

The Senior Directors of PwC Malaysia have not only shown that they can influence the very regulators whom are supposed to keep an eye on them, but have also managed to convince the staff of one of their bigger clients, in this case Maxis, to commit an act that has absolutely nothing to do with auditing, but is as illegal as anything that the PwC Malaysia Directors themselves have committed over the years.

This is a symptom of a total breakdown in the efficacy of the CG framework of the country. The regulators have not done their job. The various watchdogs are about as useful as dormice. The internal auditors of Public Listed Companies have no qualms about breaking the law just to satisfy their external auditors. The various accounting bodies are headed by the very same people who are committing the rule breaking acts. And the list goes on.

The two biggest losers in this one sided battle to 'safeguard' the public interest are the citizens of the country, and the Government of Malaysia. The people have no power to disclude auditors like PwC Malaysia from auditing and doing consulting work for the many GLC's and PIE's, and neither do they have the say to prevent their money from being invested into these GLC's and PIE's through the various Government Investment Arms.

The Government itself is setting itself up to be made a mockery of, as all the hard work towards economic transformation and generating solid economic growth is being sabotaged by the inability of its enforcement arms to ensure that investors, both foreign and domestic, can read any financial statement signed of by the likes of those in PwC Malaysia, as being a work of fact, and not one of fiction.

If the Government cannot get the regulators like the Securities Commission and the Audit Oversight Board to get their act together, while at the same time agencies like PEMANDU and its like are handing over lucrative consulting contracts to auditing firms like PwC Malaysia, who have shown the ability to even get a highly regarded company like Maxis to break the rules, then it is putting the cart before the horse when it comes to economic development.We must, as a nation, get our act together in something as fundamental towards
investor confidence as Corporate Governance and Audit standards if we are to join the ranks of the developed world.

And if this journey requires the various gatekeepers and influencers to be forced to do their jobs, so that auditors like PwC Malaysia actually end up doing their jobs as external auditors, instead of instigating their clients to commit illegal acts for the benefit of their external auditors, then that will be a giant step in the right direction.

The slide towards having a Corporate Governance framework which will become used in textbooks around the world as an example of how things are NOT supposed to be done is evident for all to see. The question is, are we going to do anything about it?

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