Should Deloitte lose its license over the 1MDB audit?

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Deloitte's License Suspension Over 1MDB Audit Is Being Considered by MIA

Kepong MP Lim Lip Eng has called for the Malaysian Institute of Accountants' (MIA) disciplinary board to consider withdrawing Deloitte's license to practice in Malaysia, arguing that the punishment should be proportionate to the scale of the 1MDB financial scandal. The MIA has completed its investigation into Deloitte's audit of 1MDB and has referred the matter to its disciplinary panel for further action.
Call for Drastic Action Against Deloitte

Lim Lip Eng has urged the MIA disciplinary board to take significant action against Deloitte, stating that penalties should extend beyond monetary fines. He specifically recommended considering the revocation of Deloitte's license to operate in Malaysia, citing global reports that have widely labelled 1MDB as the world's largest financial scam. Lim emphasised that the severity of the punishment should align with the magnitude of the alleged offence.
MIA Investigation Completed and Referred to Disciplinary Panel

The MIA confirmed that its investigation concerning Deloitte's audit of 1MDB has concluded. Following this completion, the case has been forwarded to the MIA's disciplinary panel for subsequent review and decision-making. This referral comes after Lim Lip Eng had previously applied pressure on the MIA to address a complaint lodged by Damansara MP Tony Pua regarding Deloitte's role in the 1MDB audits.
Past Statements and Actions Regarding Deloitte's Audit

In 2016, Deloitte itself issued a statement indicating that its audit reports for 1MDB's 2013-2014 financial statements could no longer be relied upon. This retraction was attributed to new information that emerged from the US Department of Justice's filings, which were part of efforts to recover over RM6.8 billion in assets linked to 1MDB. Lim had also previously demanded action against Deloitte and its former country managing partner, Datuk Tan Theng Hooi, for allegedly providing misleading information to Parliament's Public Accounts Committee concerning the audit.
Censure Also Suggested for KPMG

In addition to the focus on Deloitte, Lim Lip Eng also called for censure against KPMG, another accounting firm that previously audited 1MDB's accounts. He stated that any disciplinary measures taken by the MIA against both Deloitte and KPMG should be commensurate with the audit fees that these firms billed to 1MDB. This suggests a belief that the financial compensation received should be a factor in determining the appropriate penalty for any professional misconduct.

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Should Deloitte lose its license over the 1MDB audit?

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