Financial statements for 2010, 2011 and 2012 do not provide a true and fair assessment of the company.
KPMG Malaysia, the former auditors for 1Malaysia Development Berhad (1MDB), has found that the financial statements it audited between 2010 and 2012 are inaccurate after analysing the declassified Auditor-General’s report on 1MDB.
In a statement today, the 1MDB Board of Directors said that in a letter dated June 8, 2018, the accounting firm advised 1MDB to immediately take all necessary steps to prevent any further or future reliance on the three audit reports, namely for the financial years ending March 2010, 2011 and 2012.”
According to KPMG, they reached the decision after going through the recently declassified Auditor General’s report on 1MDB and other relevant documents that were withheld from them by the previous management of the company,” it said.
1MDB said 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.”
“In addition, KPMG has advised us that 1MDB should notify the relevant authorities on the latest status of the audit reports,” it added.
KPMG was the auditor of 1MDB for the financial years of 2010, 2011 and 2012 before they were replaced by Deloitte Malaysia for refusing to validate accounts worth US$2.32 billion (RM9.24 billion).
Deloitte joined in 2013 but resigned in February 2016 after the US Department of Justice’s filed complaints seeking to recover over US$1.7 billion (RM6.83 billion) in assets traceable to funds allegedly misappropriated from 1MDB. They were replaced by Parker Randall.
Ernst and Young was the first of 1MDB’s four auditors, but their contract was also terminated by the former management.