KPMG tells 1MDB board 2010-2012 audit reports 'unreliable'

PETALING JAYA: KPMG, one of four external auditors that 1Malaysia Development Bhd (1MDB) hired over the course of 2010 till 2017, has come out as the second auditor to void its audit reports on 1MDB, citing revelations in the declassified Auditor-General's report on the state investment company.
KPMG asked the board of directors of 1MDB to no longer rely on its audit reports for the financial years ending March 31, 2010, 2011, and 2012.
Deloitte, which was 1MDB's auditor between 2013 and 2016, had in July 2016, upon announcing its intention to resign, declared that its audits of the company for the financial years 2013 and 2014, could not be relied on, following the filing of a civil forfeiture action by the US Department of Justice for assets linked to the 1MDB scandal.
The services of 1MDB's first auditor Ernst & Young LLP were terminated before it could complete the audit for the first year, while its latest auditor Parker Randall, was appointed in 2017, months after Deloitte resigned.
According to the 1MDB board today, KPMG advised them in a letter dated June 8 to "immediately take all necessary steps to prevent any further or future reliance" on the three audit reports.
KPMG said it reached the decision after going through the recently declassified Auditor General's report on 1MDB and other relevant documents that were withheld from it by the previous management of the company. If the documents had been disclosed to the auditors, KPMG believed the information "would have materially impacted the financial statements and the relevant audit reports".
In addition, KPMG has advised the 1MDB board to notify the relevant authorities on the latest status of the audit reports.
In a separate statement, 1MDB announced that the deputy secretary general overseeing government investments at the Treasury, Datuk Asri Hamidon, has been appointed chairman of 1MDB, effective Monday. He replaces former secretary-general of the Treasury Tan Sri Irwan Serigar.
Additionally, 1MDB has formed an executive committee comprising Pricewaterhousecoopers executive chairman Datuk Mohammad Faiz Azmi, government investment company division undersecretary Datin Rashidah Mohd Sies and former Agrobank president and CEO Datuk Wan Mohd Fadzmi Wan Othman. The committee will manage the company's day-to-day operations.