Deloitte was appointed as 1Malaysia Development Bhd(1MDB)s auditor in December 2013 as a replacement for KPMG Malaysia, which was sacked after it wanted to issue a qualified audit report for 1MDBs 2013 financial statements. This was in relation to a difference of opinion on the fair value of 1MDBs investment in Bridge Global SPC. On taking over, Deloitte verified the accounts for the financial years 2013 and 2014 and issued an unqualified opinion.

Subsequently to this, the US Department of Justice has alleged that over US$4.5 billion was stolen from 1MDB by top officials of the fund and their associates between 2009 and 2014. 1MDB was the subject of money laundering investigations in at least six countries, including the United States and Malaysia. The Securities Commission reviewed the work carried out by auditors KPMG and Deloitte to understand whether they were were aiding and abetting in this scandal, or merely negligent.

On 3 March 2021, Deloitte has agreed to a RM324 million (US$80 million) settlement to resolve all claims related to their fiduciary duty on auditing the accounts of 1MDB and SRC International Sdn Bhd from 2011 to 2014.

Based on the abovementioned scenario, answer the following questions:

Required:

In the context of 1MDB, discuss the audit areas that are significantly impacted fiduciary duty of external auditors.

(2) A material misstatement is information in the financial statements that is sufficiently incorrect that it may impact the economic decisions of someone relying on those statements.

Conceptually discuss the impact of the following factors related to the role of external auditor to detect material misstatement, comprising of:

technology,

regulatory requirements,

audit tenure,

auditors expertise, and

audit committees effectiveness