The Malaysian Institute of Accountants (MIA) has referred Deloitte to a disciplinary committee for further action, following the completion of its investigation into the firm’s audit of 1MDB.
The scandal-ridden development company 1MDB was allegedly used by former Malaysian Prime Minister Najib Razak to channel over $700m into his personal bank accounts.
1MDB is currently audited by PwC which was appointed by the Malaysian finance minister due it to being the only Big Four firm considered unaffected by the corruption charges levelled against the investment fund.
MIA CEO Nurmazilah Dato’ Mahzan issued a short statement on 25 November: “With regard to the recent news in the media relating to 1MDB Auditor, Messrs Deloitte, MIA wishes to confirm that MIA has done the investigation on Deloitte where the case has now been escalated for hearing at the Disciplinary Committee.”
In June, KPMG, which was fired by 1MDB in 2012 for raising too many questions about its activities, stated that its audits of the company for the FY ended 31 March 2010 to FY ended 31 March 2012 should no longer be relied upon after a report which was previously unavailable to the firm was declassified by the Malaysian auditor general.
A spokesperson for Deloitte Malaysia said: "We continue to cooperate fully with all relevant authorities investigating matters associated with 1MDB. We stand by our professionalism, quality, independence and ethics in the services we provide. Given the ongoing investigations by the authorities, it would not be appropriate for us to comment further.”