(AUDIT UPDATE) Why I Resigned as Auditor When Directors Start Fighting

Inspired by SSM’s Media Statement on 16 October 2025

Introduction

It all started with one SSM statement.

This month, Suruhanjaya Syarikat Malaysia (SSM) released a media statement dated 16 October 2025. SSM charged two ex-directors under Section 218 & 221 of the Companies Act 2016.
That case reminded me why I resign as an auditor whey directors fight in the boardroom.

Two former directors of a private limited company were charged under:

Section 218(1)(c) of the Companies Act 2016 – for approving salary increments without the consent of a general meeting; and
Section 221(1) – for failing to declare their interest in a tenancy agreement involving company property.

At first glance, it looked like a simple corporate dispute.
But to every auditor and tax agent, this case is a sharp reminder:
When directors fight, governance collapses and the professional standing in the middle will always get hit first.

When the boardroom becomes a battlefield

Over the past 25 years, I’ve seen countless versions of the same story.

One director quietly approves a salary raise.
Another refuses to sign.
Soon, emails start flying, WhatsApp messages become “evidence,” and everyone cc’s the auditor “for transparency.”

But when “transparency” turns political, the auditor becomes the referee and the blame magnet.

I’ve seen both sides submit two different sets of financials, both claiming they are correct.
That’s the point I know the audit is no longer about numbers, it’s about power.

Why I always choose to resign

People often ask me:
“Mr. Koh, why you resign? You still can audit mah.”

Technically yes.
But practically, when directors don’t talk to each other, independence is already gone.

Every figure becomes suspicious.
Every transaction becomes a potential landmine.
And every professional fee suddenly looks too small for the risk.

If the conflict escalates, the auditor might end up being called by SSM, LHDN, or even the police (Yes! I watch drama in police station before) , not to audit, but to testify.

That’s why I always say:

“No audit fee can buy peace of mind when governance collapses.”

Lessons from the SSM case

Let’s be real ! Those two ex-directors probably never expected their names to appear in the media.

But once you breach Sections 218 or 221, you’re crossing legal boundaries, not just ethical ones.

Section 218(1)(c) : A director must not use his position to gain personal advantage.
Section 221(1) : A director must declare any interest in contracts involving the company.

These are not mere compliance checkboxes. They protect the integrity of the company — and the professionals working with it.

When directors misuse their position or fail to disclose their interest, it compromises everything.
That’s when a responsible auditor like me must make the hardest, yet most professional decision : to disengage.

Our firm’s policy

At KTP & Company PLT, we have one clear principle:

If there’s an internal dispute between shareholders or directors … we resign immediately.

We don’t take sides.
We don’t mediate.
We protect our independence, our integrity, and our licence.

Because when governance breaks down, there’s no winner only paperwork, court letters, and sleepless nights.

The peaceful truth

Resigning doesn’t mean giving up.
It means drawing a professional boundary.

I’d rather issue a clean disengagement letter than a long explanation to SSM or LHDN later.

As I often tell my colleagues :

“We audit financial statements, not family quarrels.”

So when internal politics start brewing, I choose the peaceful path to walk away.

Final thoughts

The SSM case serves as a strong reminder for directors, shareholders, and professionals alike :
Corporate governance isn’t optional. It’s the backbone of every business.

And when that backbone breaks, the best way to stay upright is to step aside gracefully.

Because at the end of the day,
We audit financial statements, not people quarrels.

PS : Authored by Mr Koh Teck Peng, the group principal, in his personal LinkedIn post,

Visit Us

Wisma KTP, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma THK, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

KTP (Audit, Tax, Advisory)

An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients

THK (Secretarial, Bookkeeping, Payroll, Advisory)

A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsourcing bookkeeping, and payroll services to clients