Launch of Industry-wide Electronic Bank Confirmation Platform Set to Transform Auditing & Capital Market

The industry-wide Electronic Bank Confirmation (EBC) Platform (eConfirm.my) was officially launched on 26 June 2020 by the Malaysian Institute of Accountants (MIA) and Extol Corporation Sdn Bhd (Extol), a wholly-owned subsidiary of AppAsia Berhad, at an e-ceremony attended by various stakeholders, including auditors, audit clients, bankers and regulators.

In his welcome remarks, MIA President Huang Shze Jiun noted that eConfirm.my marks another significant milestone for MIA on its mission to continuously improve the current bank confirmation process, which in turn advances MIA’s digital transformation agenda for nation- building and delivers significant benefits for stakeholders such as auditors, banks, reporting entities and the capital market as a whole.

In her presentation on the EBC platform, MIA CEO Dr.Nurmazilah Dato’ Mahzan explained MIA’s commitment to advocating for digital technology that drives audit efficiency and effectiveness. “The traditional process (of bank confirmations) is slow and time-consuming. Any delays affect clearance by auditors and could impact the timely approval of financial statements by the Board of Directors,” she said.

Chairman of AppAsia Berhad, Datuk Wira Rahadian Mahmud concurred that “The capital market benefits from reduced delays in clearance of audited financial statements. It also mitigates the risk of confidential information being wrongly sent to other parties through postal services”.

In his remarks, Calvert Wong, Executive Director of AppAsia Berhad and Extol Corporation Sdn Bhd extolled the “collaborative efforts” that drove the successful launch of the eConfirm.my and thanked MIA as well as all participating banks and audit firms for their positive response and assistance. He emphasised that: “This is a unique homegrown product with first-of-its-kind end-to-end encryption technology, a key factor that ensures top level security and protection.”

Key Benefits of the EBC Platform

By replacing the manual paper-based confirmation process with secure electronic confirmation processes, the EBC Platform offers several significant benefits for auditors, audit clients, banks and the capital market:

• achieves greater efficiency and savings
• eliminates duplications and loss of confirmations, and expedites confirmation replies to the auditors.
• mitigates the risk of confidential information being wrongly sent to other parties through postal services.
• enhances accountability and traceability because the system is able to trail the confirmation status at any point in time.
• expedites confirmation and reduces delays in clearance of audited financial statements which benefits the capital market.
• enhances compliance with approved standards on auditing, financial reporting deadlines and practice review requirements.
• reduces the risk of fraud which may potentially go undetected by auditors whilst protecting the interest of stakeholders that rely on audited financial statements.
• supports protocols for health and wellness in the COVID-19 new normal, as the EBC platform minimises human contact and promotes social distancing through a technology platform.

Background of the EBC

To address several issues and risks pertaining to bank confirmation, eConfirm.my was  conceptualised for implementation in 2016 with MIA, under the leadership of the then MIA President, YBhg Dato’ Mohammad Faiz Azmi, spearheading together with relevant stakeholders such as auditors, bankers, Bank Negara Malaysia (BNM) and the Association of Banks in Malaysia (ABM) within the electronic bank confirmation ecosystem. The plan was supported by the MIA Council and the ABM and enjoyed continuous collaboration with the latter’s respective member banks.

Local vendor 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. The usage fee is RM15 per online submission of confirmation request and will only be charged upon the successful receipt of the confirmation.

“Looking ahead, we will continue to engage with the participating auditors and banks in order to materialise the idea of an industry-wide electronic bank confirmation platform. Engaging the audit clients will also be particularly critical to scale up adoption,” emphasised Huang.

To date, 350 audit firms and seven banks have signed up to the EBC Platform and MIA is confident that many more will join once the eConfirm.my gains momentum.