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Casa says 'nothing much it can do' about qualified audit opinion
MAINBOARD-LISTED Casa Holdings, which distributes home appliances and develops properties in Malaysia's Iskandar region, said on Monday that group auditor Nexia TS has issued a qualified audit opinion on the company.
This is because Nexia was unable to obtain sufficient appropriate evidence to ascertain the carrying amount of the group's investment in Malaysia-listed Fiamma, in which Casa has a 15.21 per cent interest.
Casa's investment in Fiamma is classified as an associate company as Casa is deemed to have significant influence over Fiamma through its representative on the Fiamma board.
Fiamma is audited by KPMG Malaysia, but when Nexia approached KPMG, KPMG cited the Listing Rules of Bursa Malaysia as a factor in not being able to allow Nexia access to themselves or their audit working papers.
Nexia said: "Due to the above restrictions, we were also not able to perform any other satisfactory alternative procedures for us to
fulfil the requirements of Singapore Standard on Auditing 600, Special Considerations – Audit of Group Financial Statements (including the Work of Component Auditors)."
Casa said: "For the past few years, the group auditor (Nexia) and the component auditor (KPMG) have tried to cooperate but failed to find a workable solution or reach an agreement in complying with their respective regulatory and other requirements. The board is of the view that even though the company has significant influence over Fiamma, it does not have authority to dictate what the component auditor can or cannot do to assist the group auditor, and hence there is nothing much the company can do in changing the situation.
"So going forward, the company foresees that the audit opinion shall remain status quo unless there is a change in rules and regulation and its implementation."