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Researcher : Mr Loganathan a/l Krishnan

Designation: Assis tant Professor

Faculty: Faculty of Accountancy and Management

Department :Department of Manage ment

E mail Address: loganathan@mail.ut ar.edu.my

Background

Auditors examine the accounts of a company and report to the company on the accounts. Fundamentally, the concern is how auditors carry out these duties effectively. Legislations namely Companies Act 1965, Accountants Act 1967, Securities Industry Act 1983, Banking and Financial Institutions Act 1989 and Capital Market and Services Act 2007 have made major inroads to ensure that auditors carry out their duties and obligations effectively. Additionally, the Code of Corporate Governance was drawn in 2000 and amended in 2007, to further enhance the effectiveness of auditing in the interests of stockholders and stakeholders.

Research Gap

Essentially, there is no research been done on the auditors? role from a legal perspective combining the relevant legislations, cases and the Code of Corporate Governance. Most of the research done examined the Code of Corporate Governance in isolation. Hence, this research will explore the legal standards laid down by the legislature and the courts in relation to auditors and corporate governance. 

Scope of Research

It is pertinent to determine whether the Code of Corporate Governance is adequate and comprehensive in ensuring that auditors play an effective role in auditing a company. This is particularly imperative in the light of recent scandals involving auditors in Malaysia namely in Transmile Group Bhd, Ocean Capital Bhd, Megan Media Holdings Bhd and Southern Bank Bhd. The duties and obligations of auditors must be reassessed to bring about a more meaningful role in countering the scandals involving auditors. The research then proceeds to explore the appropriate litmus test in laying down sound principles governing the duties and obligations of auditors. This is crucial because there is increased reliance by stockholders and stakeholders on auditors. Moreover, there is a growing concern for corporate governance domestically, regionally and globally. Hence, the research will include a comparative study on the legal position in developed countries such as United Kingdom, Australia and New Zealand. Thus, the research will recommend suitable reforms to be made to the current Code of Corporate Governance.

Research Methodology

As this is a legal research, qualitative method will be employed. The methodology peculiar to legal research will be used namely analytical reasoning, justificatory reasoning and historical review. The research will examine the various aforementioned legislations governing auditors; cases decided by the courts in Malaysia, United Kingdom, Australia and New Zealand pertaining to auditors? duties and obligations; and the relevant provisions in the Code of Corporate Governance.

Research Outcomes

      1.   Presenting the research findings at both national and international conferences for constructive queries/comments and feedback. This will provide further insight on the subject matter from both national and international perspectives.

2.      To publish the research findings in international indexed double blinded refereed scholarly journals.

3.      To submit a report to the Malaysian Institute of Corporate Governance to consider reforms, suggestions and recommendations to the current Code of Corporate Governance.

4.       To submit a report to the relevant body which govern auditors for consideration in drawing up amendments to the current standards and guidelines pertaining to corporate governance.

5.      To conduct training and seminars advising auditors on their role and legal position as auditors.