THE Securities Commission Malaysia’s (SC) Audit Oversight Board (AOB) has called on audit firms to strengthen their operational capacity and internal systems to ensure sustained improvements in audit quality across the industry.
In its Annual Inspection Report 2024, released Thursday, the AOB said audit quality had shown a positive trajectory, with enforcement cases involving inspected engagements falling from 16 per cent in 2023 to 8 per cent in 2024.
“This positive outcome reflects the continuous efforts of audit firms and individual auditors to enhance audit quality,” the AOB said.
The report covered assessments of 40 audit partners and 40 engagements across 13 firms, including all nine Major Audit Firms — which together audit 76 per cent of public-listed companies (PLCs), representing 95 per cent of total market capitalisation in Malaysia.
These firms also audit 1,319 Schedule Funds, covering 99 per cent of their total net asset value.
Audit Quality Indicators (AQIs), used to benchmark audit firm performance, showed that both Major and Other Audit Firms had taken active steps to address challenges such as resource constraints and high staff turnover.
“Improvement in firms’ quality management systems, specifically the monitoring and implementation of internal quality controls, is critical in supporting audit quality,” the AOB stated.
The AOB encouraged all firms to continue addressing the deficiencies highlighted in the report and to ensure audit quality is upheld consistently across all engagements.
The 2024 report also detailed AOB’s supervisory focus, including initiatives such as “Keeping a Watch on Auditor Resignations” and reviewing the “Effectiveness of Firm’s Remediation”, as part of efforts to strengthen the overall governance and accountability of the audit ecosystem.
“The AOB remains committed in its ongoing efforts to strengthen audit capacity and capability, audit quality and governance of its registered firms,” the Board said.
The *Annual Inspection Report 2024* is available at: [www.sc.com.my](https://www.sc.com.my/aob/about-audit-oversight-board/aobs-annual-inspection-report) - August 21, 2025
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