Why did Deloitte agree to audit 1MDB accounts?

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Deloitte's Rationale for Auditing 1MDB Remains Unexplained Amidst Scrutiny

Deloitte's decision to accept the audit engagement for 1Malaysia Development Berhad (1MDB) has been questioned by political figures, citing potential conflicts of interest and alleged shortcomings in the auditing process. While specific internal justifications from Deloitte have not been provided, the firm's acceptance of the role has drawn criticism regarding the thoroughness and independence of its examination of 1MDB's financial statements.
Allegations of Conflict of Interest

Concerns were raised regarding the presence of Nizar Najib, son of then-Prime Minister Datuk Seri Najib Razak, within Deloitte's financial advisory services division. PKR's Rafizi Ramli highlighted that Nizar Najib's position as an executive director could create issues of conflict of interest, or at least the perception thereof, for Deloitte in undertaking the 1MDB audit. This familial connection prompted questions about how the firm proceeded with the engagement, given the potential for perceived bias.
Doubts Over Audit Thoroughness

DAP's Tony Pua has urged the Malaysian Institute of Accountants (MIA) to investigate Deloitte, alleging a failure to report questionable transactions identified during the audit. Pua specifically referenced the International Standards on Auditing, which mandate auditors to exercise "professional skepticism" in their work. He argued that Deloitte's auditors could not claim ignorance regarding the significant public interest surrounding 1MDB and its financial dealings.
Previous Criticisms of Audit Quality

Prior to these recent calls for investigation, Pua had already voiced criticism regarding the perceived lack of thoroughness in Deloitte's audit of 1MDB. He pointed to instances where the firm reportedly indicated sufficient liquidity within 1MDB, even as the company was facing cash flow difficulties and required loan extensions. This discrepancy between the audit findings and 1MDB's reported financial struggles led to Pua's assertion that Deloitte's reputation was at risk.

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Why did Deloitte agree to audit 1MDB accounts?

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