September 24, 2020: The Audit Oversight Board (AOB) has imposed a fine of Rs 50,000 on Aslam Malik & Company, Chartered Accountants for multiple violations of the law.
One of the reported partners of the firm signed six auditor’s reports of listed companies on behalf of the firm without first attaining the necessary authority from ICAP to sign such reports on behalf of the audit firm. The firm had failed to report this partner for the purposes of audit quality control review. The firm also filed false information to AOB regarding this partner and provided a false declaration that the information provided was updated and true.
The action was taken by AOB after providing an opportunity of being heard to the firm and explaining its position in writing and in person. AOB also directed the firm to submit an action plan comprising substantive measures to address the weaknesses in its systems and controls.
AOB is the independent regulatory authority that oversees the quality of audit of financial statements of public interest companies that include all listed companies. The stakeholders of these companies include investors, shareholders, lenders, and tax authorities which place their trust in the independent assurance provided by external auditors that the financial statements prepared by the management present a true and fair view of the companies’ financial statements. Only the audit firms registered with AOB are authorized to audit the financial statements of a public interest company.