Three giants later, last of 'Big Four' to crunch 1MDB accounts

Finance Minister Lim Guan Eng has instructed that PricewaterhouseCoopers (PWC) be appointed as 1MDB's new auditor to determine the state-owned company's financial standing.

PWC is the sole firm among the 'Big Four' global accounting giants that did not become embroiled in the 1MDB scandal.

"I have instructed that the Finance Ministry take steps to appoint PWC to conduct a special position audit and review of 1MDB so that Malaysians would know the true financial state of the company.

"We would then be able to determine the cost of the shenanigans to the taxpayers.

“We would submit the PWC report to the 1MDB special committee set up by the prime minister once it is completed," he told a press conference in Putrajaya this evening.

1MDB has not furnished its annual report for 2015, 2016 and 2017, on grounds that the police were in possession of key documents which were seized during a raid in July, 2015.

KPMG was the appointed auditor for 1MDB's annual report in 2010, 2011 and 2012.

However, 1MDB terminated KPMG's services when it raised questions about certain investments for the 2013 annual report – just as it was about to issue a qualified opinion, according to the Public Accounts Committee.

This refers to a statement issued by KPMG that suggested the provision of insufficient information, meaning that the company in question has not maintained appropriate accounting standards.

New auditor Deloitte signed off the 2013 annual report, which KPMG refused to do without a qualified opinion.

Prior to this, 1MDB's auditor was Ernst & Young, which was appointed in March 2009, shortly before the Terengganu Investment Authority was converted into 1MDB.

Ernst & Young’s services were terminated in September 2010 without signing off on any financial reports.

The auditor had requested several documents to ascertain the fair value of 1MDB's assets and liabilities for its joint venture with PetroSaudi International before its services were terminated.

Previously, 1MDB auditors were either sacked for refusing to approve 1MDB's books, or had given the nod despite questionable accounts.

After going through three of the four accounting giants, the previous BN government had trouble finding a new auditor that was willing to handle 1MDB's accounts.

1MDB, at the time, resorted to hiring Parker Randall, which is not considered a global accounting giant as it comprises different accounting firms across the globe.

In Malaysia, Parker Randall is represented by local firm Aftaas (Afrizan Tarmili Khairul Azhar), with a number of firms it audited having previously been criticised by the opposition.

The new Pakatan Harapan government has accused the previous BN administration of trying to cover up the multi-billion ringgit 1MDB scandal and has vowed to uncover the alleged wrongdoings. -Mkini