RM4.8bil gap between TH reports not proof of audit failure, says ex A-G

Former auditor-general Madinah Mohamad defended the audit of Tabung Haji against claims of failure, stating the RM4.8 billion disparity between the report and a separate PwC review does not indicate poor performance. Madinah clarified the two assessments had distinct objectives, terms of reference, and methodologies, rendering direct comparison inaccurate.

The differences arose from varying approaches to recognising and valuing asset impairments and investments, including TH’s subsidiaries and associates. She affirmed no evidence of theft or misappropriation was uncovered during the audit, emphasizing she would have reported any wrongdoing to authorities, as per her mandate. The audit adhered to standards and evidence, remaining grounded in reality.

The department's audit, conducted under the Audit Act 1957 and Tabung Haji Act, aimed to ascertain if TH’s financial statements presented a true and fair view according to prevailing accounting standards. PwC performed a financial position review with a different mandate, employing a broader evaluation of TH’s financial standing.

Madinah, who served as auditor-general from 2017 to 2019, noted the 2017 report did not explicitly point to theft evidence. She speculated that her testimony before the royal commission of inquiry (RCI) could have altered its findings. During a special Dewan Rakyat session on Aug 11, Syed Saddiq Syed Abdul Rahman questioned why Madinah’s testimony was omitted, as she was the auditor-general at the time.

The RCI discovered TH had concealed its financial position for years, reporting a RM3.4 billion profit in 2017 instead of a RM1.4 billion loss under proper accounting rules, a gap of nearly RM4.8 billion. The commission also criticized the national audit department for insufficient audits of TH’s financial statements from 2014 to 2017.