Kuala Lumpur, 22 February 2017 ? Four ASEAN audit regulators and Big-Four  audit firms in the region have collectively agreed on a measurable goal to improve audit quality. This initiative was announced at the ASEAN Audit Regulators Group (AARG)'s 5th annual Audit Inspection Workshop held in Kuala Lumpur from 21 to 22 February 2017. The Workshop also saw AARG embark for the first time, on a long term collaboration with World Bank to further strengthen audit oversight practices in the region.

Audits play a crucial role in upholding the reliability of financial statements and investors? confidence in capital markets. This new initiative saw the Big-Four audit firms in Malaysia, Indonesia, Singapore and Thailand agree to work towards achieving a reduction of at least 25% in the number of listed companies? audits with inspection finding(s). The AARG comprises Malaysia's Audit Oversight Board (AOB), Indonesia's Finance Professions Supervisory Center (PPPK), Singapore's Accounting and Corporate Regulatory Authority (ACRA), and Thailand's Securities and Exchange Commission. The progress towards this goal will be monitored and measured at a national level by the respective AARG members on an ongoing basis.

This initiative also complements a similar initiative  by the International Forum of Independent Audit Regulators (IFIAR) in March 2016 to achieve a targeted reduction in audit inspection findings globally, so as to address persistent deficiencies in listed public interest entity  audits. To achieve this goal, the AARG will ramp up its engagement with the Big-Four audit firms? leadership to address root causes of recurring inspection findings.

In another first, the 5th AARG Audit Inspection Workshop marked the first collaboration between the World Bank and AARG. To complement AARG's on-going efforts to raise the standard of audit quality in ASEAN, the World Bank's Centre for Financial Reporting Reform (CFRR), in collaboration with experts from the East Asia Pacific region of the Bank's Global Governance Practice, has secured funding from various sources and is providing other technical assistance to boost capacity building efforts. These efforts are in line with the AARG's on-going work to achieve greater alignment in audit regulatory practices among ASEAN members.

The Workshop was attended by over 75 participants from 12 jurisdictions including audit regulators from Brunei, Cambodia, Laos, Philippines, Vietnam, China, Japan, and Hong Kong. To cater to the differing needs of the participants, the Workshop featured presentations by experts on various audit oversight models suitable for countries in the development phase of audit regulation, as well as thematic inspections suitable for countries with more established audit oversight programmes.

Comments on the goal of 25% reduction: 

Mr Kenneth Yap, Chief Executive, ACRA (Singapore) said ?By setting a quantifiable milestone, audit regulators and audit firms in the region have demonstrated their commitment to work together to raise audit quality in the region. This bodes well for investor confidence in ASEAN.?

Dato? Gumuri Hussain, Executive Chairman of AOB (Malaysia), said ?This initiative will instil a sustainable culture of audit quality across audit firms in the region which will result in enhancing the confidence in the capital market, in the quality and reliability of audited financial statements.?

Mr Langgeng Subur, Head of PPPK (Indonesia) said ?The PPPK is committed to support the improvement in audit quality. We believe a reduction in inspection findings will contribute towards greater public trust in financial statements.  As a regional grouping, the AARG will work closely together with the audit firms to achieve this target.?

Ms Nidaporn Assawateerakiat, Director of the Accounting Supervision Department, SEC (Thailand) said ?High quality audits and financial reports are crucial to maintain trust and confidence in our capital markets. The AARG strongly believes that this initiative will help to achieve this objective and contribute to sustainable and long-term economic growth in the ASEAN region.?

Comments on the collaboration with the World Bank:

Dato? Gumuri Hussain, Executive Chairman of AOB, said ?The inaugural collaboration is an imperative step to foster a consistently aligned and strong audit regulation in the ASEAN region. We are delighted with the opportunity to host such an important event in the AARG's calendar of events.?

Mr Jarett Decker, Head of World Bank's CFRR, said ?The AARG has done exemplary work in building a regional knowledge-sharing forum to improve audit regulation throughout the ASEAN region. The World Bank is pleased to partner with the AARG to provide additional technical support and resources. We look forward to a strong and fruitful partnership in the years to come.?