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27 Jul 2016 01:25pm

Deloitte resigns as auditor of Malaysian government fund 1MDB

A Malaysian government investment fund revealed on Tuesday that Deloitte resigned as auditor in February

1MD is at the centre of a large-scale global corruption probe, with the announcement coming a week after the US Department of Justice filed a civil suit aiming to seize $1bn (£800m), after it claimed $3.5bn had been misappropriated from the fund.

According to the Wall Street Journal, Deloitte is the third auditor to leave the corruption-hit organisation. The paper said that KPMG signed off on 1MDB’s accounts for the years 2010-2012, but was fired in 2013 after raising questions over a specific investment. EY was fired in 2010 after raising similar questions.

Although 1MDB said in its statement yesterday it is confident that no wrongdoing has been committed, it said that 2013 and 2014 audited financial statements should no longer be relied on “by any party”.

In a statement, Deloitte said that the information contained in the DoJ's complaint would have impacted the financial statements if known at the time of its 2013 and 2014 audits.

"Accordingly, those audit reports issued by Deloitte Malaysia dated 28 March 2014 and 5 November 2014 respectively in connection with the 2013 and 2014 financial statements of 1MDB should no longer be relied upon," Deloitte Malaysia said.

Ellie Clayton

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