Audit firms are exhorted to sign up for eConfirm.my, the Industry-wide Electronic Bank Confirmation Platform in Malaysia which MIA is spearheading and will go live on 5 May 2020.
eConfirm.my is entering the market at an opportune moment. The delays in receiving bank confirmation replies have seriously impacted on the timeliness of financial statements being approved by the Board of Directors and hence the delay in the signing of audit reports.
eConfirm.my will help audit firms to expedite bank confirmations and enhance the bank confirmation process, which will in turn support compliance with approved standards on auditing, financial reporting deadlines and practice review requirements especially during the restrictions imposed under the Movement Control Order (MCO) and even post-MCO.
Many MIA audit firm members, particularly small and medium practices (SMPs) that lag in adopting digital technologies such as cloud storage and remote work tools, report challenges working during the MCO. Cognizant of their challenges, the Institute has engaged with the relevant government bodies and regulators to extend the pertinent compliance deadlines.
In addition, the Institute is strongly advocating that audit firms sign up to use eConfirm.my. Currently, more than 100 audit firms are on board along with seven pilot banks in eConfirm.my. Despite the restrictions of the MCO, MIA has successfully facilitated the training of hundreds of auditors and bankers via remote video training sessions from 6 to 17 April 2020 to prepare them for the transition.
Fruition of MIA’s Strategic Collaboration Approach
eConfirm.my is a multi-stakeholder platform that leverages on MIA’s collaborative leadership approach. The plan to develop an industry-wide electronic bank confirmation platform (Platform) and eliminate the need for paper-based confirmation was conceived in 2016.
MIA then set up a task force in 2016 to look into various options for service providers, to facilitate the implementation process and to identify the roles and responsibilities of relevant stakeholders such as auditors, bankers, the Association of Banks in Malaysia (ABM) and Bank Negara Malaysia (BNM) within the electronic bank confirmation framework. A local vendor, i.e. Extol Corporation Sdn Bhd (Extol) was eventually awarded the tender to develop the Platform, with a much more economical usage fee compared to the current fee charged by a global vendor in the market.
MIA would like to accord its appreciation to BNM, ABM, banking institutions, audit firms and many other stakeholders as the Platform would not have materialised without their support.
Multiple Benefits of eConfirm.my
Audit firms that use eConfirm.my, which is slated to be launched in May 2020, will gain the following benefits:
• Keep up with Global Trends and Local Market Developments – Online confirmations are the preferred method for confirming client information in jurisdictions such as the United States of America, the United Kingdom and Australia. In Malaysia, online confirmations are currently being used in a limited manner for confirmations with some foreign banks, but they are predicted to become the norm once the eConfirm.my is rolled out and becomes the preferred method.
• Work Remotely Even During Business Shutdowns – Lockdowns and remote working are predicted to become normalised in the post-COVID-19 era as social distancing and remote work are mandated to reduce infection risks. Like it or not, audit firms that want to maintain their business continuity and sustainability must adopt digital tools. These can range from cloud storage to enable round-the-clock access to data, online meeting tools to simulate a virtual office environment and engage with staff and stakeholders, and the upcoming eConfirm.my to expedite audit processes.
• Improve Efficiency and Security – Manual bank confirmations are inefficient and
time consuming, with an average turnaround time of 4 to 8 weeks. Any delays in receiving bank confirmations could affect audit work and subsequently impact the timely approval of financial statements by the client’s Board of Directors. eConfirm.my is much faster.
Worse, the management of audit clients can conceal fraud by compromising the manual confirmation processes, for example, through the creation of false confirmation contact details, signature forgery and clients intercepting the confirmation process, making it difficult for even the most experienced auditors to detect financial fraud.
By embedding industry-standard authentication and authorisation procedures, eConfirm.my delivers a high standard of security and deters fraudsters. Verification of the organisations and users via the eConfirm.my ensures confirmations are only sent and received by registered and authenticated auditors and banks.
• Minimise Risks of Human Error and Optimise Talent – There is a risk of human error as the manual confirmation is labour-intensive, especially during the peak audit period. For example, posting confirmation requests to the wrong address will require re-sending the confirmation and further follow-up.
As a bonus, the eConfirm.my can eliminate the mundane tasks that affect talent retention. Retain younger talent by adopting technology and eradicating time-wasting and tedious jobs such as the numerous printing, mailing, follow-up and monitoring tasks that are part-and-parcel of the bank confirmation process. In a year, and depending on the size of the firm, auditors may have to manually send out hundreds or even thousands of such confirmation request letters. Put these hours to better productive use.
• Improve Your Practice Review Rating – One of the most common reasons for low practice review inspection ratings among audit firms is the failure to obtain bank confirmations. Electronic confirmations eliminate this risk and help you comply with one of the practice review requirements.
• Save on Costs – Costs are usually cited as the main barrier to technology adoption. Yet, evidence from other markets where eConfirm.my is the norm shows that it lowers costs while increasing productivity by diverting talent to other higher-value-added tasks.
An economical fee per online submission of confirmation request will be charged upon the successful receipt of the confirmation. Auditors will be billed twice a month on the 1st and 16th of the preceding period and enjoy a credit period of up to 30 days to process and settle the payment.
• Extensive Support and Hand-holding – Knowledge gaps are another frequently reported barrier to technology adoption. Drawing on its substantial expertise in professional development, which is still ongoing throughout the MCO and post-MCO, MIA will facilitate the training of auditors and bankers via remote video training sessions. Already, hundreds of auditors and bankers have been trained during the initial training sessions in April 2020 despite the restrictions of the MCO.
• Expert and Tested Technical Infrastructure and Support – The platform was developed by Extol Corporation Sdn Bhd (Extol), a specialist in Information and Communications Technology (ICT) with significant experience in providing ICT services to financial institutions.
The Institute encourages more firms to sign up in order to expedite bank confirmations and enhance their audit process, which will facilitate compliance with international standards on auditing, practice review requirements and other regulatory requirements during the MCO and post-MCO period.
How the Electronic Confirmation Benefits You as an Auditor
For more information, please visit https://econfirm.my/