KPMG: 2010-2012 1MDB AUDIT REPORTS INACCURATE

They do not provide a true and fair assessment, says external auditor

KPMG has told 1Malaysia Development Bhd (1MDB) not to rely on its audit reports on the latter’s financial statements for the years ended March 2010, 2011 and 2012.

KPMG, in a letter to 1MDB on June 8, indirectly suggested discrepancies in the strategic development company’s financial affairs after the new government released information that was classified by the previous administration.

KPMG said the audit reports over the three years did not provide a true and fair assessment of 1MDB as it was not allowed access to some relevant documents.

The firm had reached the decision after going through the recently-declassified Auditor-General’s report on 1MDB and other relevant documents that were withheld from it by the previous government, 1MDB said in a statement yesterday.

“If the documents had been disclosed to the auditors, KPMG believed the information would have materially impacted the financial statements and the relevant audit reports,” 1MDB added.

KPMG was 1MDB’s external auditor during the three years in question, before being dismissed by the latter’s board.

Prime Minister Tun Dr Mahathir Mohamad was seeking to recoup US$4.5 billion of funds that were potentially lost through 1MDB after his Pakatan Harapan coalition swept into power in last month’s general election.

Dr Mahathir had ordered the Auditor General to release a report that was protected since 2016 by the Official Secrets Act and revived an investigation into 1MDB.

In the letter, KPMG advised 1MDB to immediately take all necessary steps to prevent any further or future reliance on the three audit reports.

The firm advised 1MDB to notify the relevant authorities on the latest status of the audit reports.