TAN Sri Ambrin Buang came prepared with all the answers to the questions that the motley crew of young journalists threw at him. He deftly handled them, which were general in nature and he almost always replied with a smirk.
To describe the task ahead for him as onerous is an understatement. Auditing the books of 1Malaysia Development Bhd (1MDB), taking it back to the time it started in 2009, is best described as humungous and could be the most important assignment for the Auditor-General.
1MDB's transactions transcend borders, central banks, complex fund-raising and flow of funds through a web of corporate companies for reasons best known to its management. It could be for tax reasons or ease of doing business or none of the above. But nobody really knows except the management.
Nevertheless, Ambrin has said that auditing is a job that the department is familiar with and will rope external help if necessary. This is true to a large extent.
The Auditor-General's report is an event every year that is well-reported. It comes in several volumes and more often than not puts to shame many government departments.
It highlights illogical purchases and causes the public to really put on their thinking caps. Some examples include a department purchasing screwdrivers for RM224 (S$84) each.
It has also created a crater in political careers. The infamous National Feedlot Corp Sdn Bhd (NFC) scandal affected Wanita Umno chief Datuk Seri Shahrizat Abdul Jalil although she was later cleared of any wrongdoing.
There are still some legal cases tied to the NFC issue but many remember it as something tied to the family of the politician.
The Auditor-General's work has so far incorporated some elements of management audit and financial audit. The outcome of the finding generally reflects the competence or rather incompetence of government departments in their procurement or management of projects.
It examines the progress of projects and whether contractors have been overpaid for jobs not done according to schedule.
But the audit involving 1MDB will go beyond looking at expenditure or examining the state of the company's finances. It calls for a forensic audit that effectively reconstructs the books.
It involves following the money trail and relooking at complex corporate agreements and structures. It determines if the transactions entered into have put the 1MDB in a position of disadvantage.
Are such actions, if any, deliberate or is there sheer incompetence? Have the laws been broken? Did the transactions get the required authorisation and adequate due diligence? It goes into examining issues such as why things were done the way they were done. Effectively a forensic audit smells for blood, if there is any.
What Ambrin and his team would be required to do is similar to the crime lab investigators in the television series CSI. Investigators in the highly-popular television series use the various evidence such as blood or hair samples to re-construct the crime scene.
And eventually, the investigators determine if a crime was committed? And if one was committed, who did it and why?
The audits done on most companies are called financial audits and they are carried out by external auditors.
1MDB has had more than its fair share of external auditors. Deloitte, which was engaged by the fund in December 2013, was its third auditor in five years. It replaced KPMG that 1MDB contended had left on the grounds that it could not complete the accounts. KPMG has so far remained silent on the matter.
What Deloitte and the others have presented so far was to show the state of 1MDB's accounts and to determine whether the company is viable. The auditor's report has looked into the assets and liabilities of the books to determine if there was no overstatement or understatement of assets or liabilities. It determines whether the debts can be collected or should be ruled as doubtful.
In more complex matters, an audit looks into the valuation of the various debt or hedging instruments that are in the company's books and whether they have been marked to market.
Finally the financial audit calls on the external auditor to give an opinion on the true and fair value of the accounts. It does not go beyond that.
It does not deliberate on the logic or illogical nature of transactions. It does not question the management's competence or incompetence. It does not delve into the oversight or complete ignorance of the board. It is not done with the intention of being a watchdog.
In some cases, companies do undertake a management audit if they find that the managers are not doing a good job. This is called a management audit.
A management audit examines policies that the company has taken to ensure profitability or caused its losses. It looks into approval limits and whether there have been breaches.
It looks into governance and audits stock levels examining the controls that are put in place to ensure no overstocking or understocking.
After a management audit, the auditor comes up with a list of shortcomings and recommendations of what can be done to shore up the bottom-line of the company. This includes checks and balances.
Not an easy task
An audit of 1MDB is not an easy task. Ambrin knows that.
If anybody says that he (or she) is expecting the job to be easy and a shoo-in, that person has to be evaluated.
Ambrin has to do a good job not only on paper. But he must also be seen as having done a good job, considering the various reports that have emerged.