This chapter examines the core issues surrounding the roles, duties, and liabilities of auditors, which form the central focus of this study. It sets out the overarching aims, rationale, and broader implications of the research, highlighting its importance in the context of financial accountability and governance. In Malaysia, the legal framework governing auditors includes key statutes such as the Companies Act 2016 (CA 2016), the Financial Services Act 2013 (FSA 2013), and the Capital Markets and Services Act 2007 (CMSA 2007). In addition, regulatory instruments like the Bursa Malaysia Listing Requirements (BMLR) and the Malaysian Code on Corporate Governance 2021 (MCCG 2021) serve to guide and control the conduct of auditors. Despite these mechanisms, recurring financial irregularities involving auditors remain a significant concern. This study pays particular attention to the legal obligations of auditors toward third parties, particularly in light of the precedent established in Caparo Industries plc v Dickman & Ors [1990] 1 All ER 568. However, the categories of third parties recognized in that case are narrow and fail to account for the legitimate expectations and rights of broader stakeholders, including the Board of Directors, Audit Committees, potential debenture holders, trustees, employees, regulators, professional bodies, government entities, and the public. The principal objective of this research is to critically evaluate the adequacy of Malaysia’s current laws in regulating auditors’ responsibilities and liabilities. The Malaysian legal position lags the more progressive approaches adopted in jurisdictions such as the United Kingdom, Australia, New Zealand, Canada, and Singapore. Though, a landmark moment in Malaysian case law occurred in Mooney & Ors v Peat, Marwick, Mitchell & Co & Anor [1967] 1 MLJ 87, where Raja Azlan Shah affirmed that auditors owe a duty to shareholders collectively, grounded in Company Law, much water has passed since then. The case provided a platform to reinforce fundamental principles regarding auditors’ responsibilities; it notably fell short of clarifying whether auditors have a duty to ensure the accuracy of the content in their reports. This study contends that both the rights of existing and potential shareholders merit protection. A clear distinction must be drawn between individual and collective shareholder rights, with increasing emphasis on individual rights in the modern investment landscape. As shareholder expectations of auditors evolve, auditors must remain aware of these expectations. Presently, prospective shareholders are particularly vulnerable, as they possess no direct legal recourse against auditors, compelling them to approach investment decisions with caution.

Introduction

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发表日期：

2025年

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Loganathan Krishnan

摘要

This chapter examines the core issues surrounding the roles, duties, and liabilities of auditors, which form the central focus of this study. It sets out the overarching aims, rationale, and broader implications of the research, highlighting its importance in the context of financial accountability and governance. In Malaysia, the legal framework governing auditors includes key statutes such as the Companies Act 2016 (CA 2016), the Financial Services Act 2013 (FSA 2013), and the Capital Markets and Services Act 2007 (CMSA 2007). In addition, regulatory instruments like the Bursa Malaysia Listing Requirements (BMLR) and the Malaysian Code on Corporate Governance 2021 (MCCG 2021) serve to guide and control the conduct of auditors. Despite these mechanisms, recurring financial irregularities involving auditors remain a significant concern. This study pays particular attention to the legal obligations of auditors toward third parties, particularly in light of the precedent established in Caparo Industries plc v Dickman & Ors [1990] 1 All ER 568. However, the categories of third parties recognized in that case are narrow and fail to account for the legitimate expectations and rights of broader stakeholders, including the Board of Directors, Audit Committees, potential debenture holders, trustees, employees, regulators, professional bodies, government entities, and the public. The principal objective of this research is to critically evaluate the adequacy of Malaysia’s current laws in regulating auditors’ responsibilities and liabilities. The Malaysian legal position lags the more progressive approaches adopted in jurisdictions such as the United Kingdom, Australia, New Zealand, Canada, and Singapore. Though, a landmark moment in Malaysian case law occurred in Mooney & Ors v Peat, Marwick, Mitchell & Co & Anor [1967] 1 MLJ 87, where Raja Azlan Shah affirmed that auditors owe a duty to shareholders collectively, grounded in Company Law, much water has passed since then. The case provided a platform to reinforce fundamental principles regarding auditors’ responsibilities; it notably fell short of clarifying whether auditors have a duty to ensure the accuracy of the content in their reports. This study contends that both the rights of existing and potential shareholders merit protection. A clear distinction must be drawn between individual and collective shareholder rights, with increasing emphasis on individual rights in the modern investment landscape. As shareholder expectations of auditors evolve, auditors must remain aware of these expectations. Presently, prospective shareholders are particularly vulnerable, as they possess no direct legal recourse against auditors, compelling them to approach investment decisions with caution.